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Nickelless
Administrator
USA
5580 Posts |
 Posted - 01/28/2009 : 21:19:59
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By RANDOLPH E. SCHMID
WASHINGTON (AP)
Massive deficits could force the post office to cut out one day of mail delivery, the postmaster general told Congress on Wednesday, in asking lawmakers to lift the requirement that the agency deliver mail six days a week. If the change happens, that doesn't necessarily mean an end to Saturday mail delivery. Previous post office studies have looked at the possibility of skipping some other day when mail flow is light, such as Tuesday.
Faced with dwindling mail volume and rising costs, the post office was $2.8 billion in the red last year. "If current trends continue, we could experience a net loss of $6 billion or more this fiscal year," Potter said in testimony for a Senate Homeland Security and Governmental Affairs subcommittee.
Total mail volume was 202 billion items last year, over 9 billion less than the year before, the largest single volume drop in history.
And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.
"It is possible that the cost of six-day delivery may simply prove to be unaffordable," Potter said. "I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week."
"The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge," Potter said.
That doesn't mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.
If it did become necessary to go to five-day delivery, Potter said, "we would do this by suspending delivery on the lightest volume days."
The Postal Service raised the issue of cutting back on days of service last fall in a study it issued. At that time the agency said the six-day rule should be eliminated, giving the post office, "the flexibility to meet future needs for delivery frequency.
A study done by George Mason University last year for the independent Postal Regulatory Commission estimated that going from six-day to five-day delivery would save the post office more than $1.9 billion annually, while a Postal Service study estimated the saving at $3.5 billion.
The next postal rate increase is scheduled for May, with the amount to be announced next month. Under current rules that would be limited to the amount of the increase in last year's consumer price index, 3.8 percent. That would round to a 2-cent increase in the current 42-cent first class rate.
The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.
Dan G. Blair, chairman of the Postal Regulatory Commission, noted in his testimony that cutting service could also carry the risk of loss of mail volume. He suggested Congress review both delivery and restrictions it imposed on the closing of small and rural post offices.
The post office's problem is twofold, Potter explained.
"A revolution in the way people communicate has structurally changed the way America uses the mail," with a shift from first-class letters to the Internet for personal communications, billings, payments, statements and business correspondence.
To some extent that was made up for my growth in standard mail — largely advertising — but the economic meltdown has resulted in a drop there also.
Potter also asked that Congress ease the requirement that it make advance payments into a fund to cover future health benefits for retirees. Last year the post office was required to put $5.6 billion into the fund.
"We are in uncharted waters," Potter said. "But we do know that mail volume and revenue — and with them the health of the mail system — are dependent on the length and depth of the current economic recession."
He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.
At the same hearing the General Accounting Office agreed that the post office is facing an urgent need for help to preserve its financial strength. But the GAO suggested easing the pre-funding requirement for only two years, with Congress to determine the need for more relief later.
Potter noted that the agency has cut costs by $1 billion per year since 2002, reduced its work force by 120,000, halted construction of new facilities except in emergencies, frozen executive salaries and is in the process of reducing its headquarters work force by 15 percent.
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L1011
Penny Collector Member
310 Posts |
Posted - 01/28/2009 : 21:37:44
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| I think the internet is what took a large bite out of the PO's bottom line, looks like they may get an extra holiday every week |
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fb101
Administrator
USA
2856 Posts |
Posted - 01/28/2009 : 21:39:53
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| Actually, I think this is a USPS scam. I suspect 75% of their losses came from running around with $4.50 gasoline, and that won't be projected into the future, it will just go to fund more orgies in Fla. |
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Ant
Penny Hoarding Member
USA
894 Posts |
Posted - 01/28/2009 : 21:46:33
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I'm cool with 5x-per week USPS delivery. If I'm expecting (or sending) something that's really important, I use FedEx anyway. The USPS for me is for bills, magazines, etc.
Oh, wait . . . all my subscriptions are online. So, I guess the Post Office is pretty much just for receiving bills now. Since, uh, I pay bills online too. 
I'll have to time my Netflix selections more carefully, though.  |
Lovely dimes, the liveliest coin, the one that really jingles. --Truman Capote
Coins are the metallic footprints of the history of nations. --William H. Woodin |
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Bluegill
1000+ Penny Miser Member
USA
1964 Posts |
Posted - 01/29/2009 : 18:14:58
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I think it's not just the fuel costs, but more the legacy costs of all those obscene federal pensions. 
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El Dee
Penny Hoarding Member
USA
547 Posts |
Posted - 01/29/2009 : 19:33:51
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Don't forget the discount they give to junk mailers.
You and I pay full price for postage, but the bulk mailers get a discount for stuffing our mail boxes with trash.
Then USPS whines about all the volume they have to transport and carry. |
Trust the government? Ask an Indian. |
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 01/30/2009 : 07:57:06
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| The USPS has lost the advantage of economy of scale. The less volume of mail they process, the more costly each mail item gets on a piece-by-piece basis. And as they raise the cost of stamps to make up for it, the volume goes down further. We're looking at the death spiral of the USPS, and I expect them to either collapse or privatize by 2025. |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 01/30/2009 : 08:49:29
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This doesn't make any sense to me. To me it seems like the post office was functioning just fine on lower shipping demand. Then they were able to ratchet up their organization just fine to meet increasing demand and now that the demand is gone they just need to ratchet down. Cutting a day seems like a play to either try and get some "free" government money thrown their way or a ploy to avoid layoffs and/or salary cuts that would/should occur as they ratchet down or both.
So I ask what happens to the salaried employees if the cut back a day? Do they continue to get payed the same and only the hourly employees take the hit? I smell a rat... |
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Postmaster General: Mail days may need to be cut
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