Written by Denise Nash Friday, 26 March 2010 00:00
Local postal workers and leaders from the letter carriers, mail handlers and clerks recently held a rally to oppose eliminating Saturday mail delivery. According to Congressman Steve Israel, seniors, veterans and many others rely on the postal system for urgent deliveries, such as Social Security checks and medical information. Postal workers attended the rally to urge the United States Postal Service (USPS) to consider all alternatives before ending Saturday service.
Facing unprecedented volume declines and a projected, cumulative $238 billion shortfall during the next decade, Postmaster General and Chief Executive Officer John E. Potter recently outlined an aggressive plan of cost cutting, increased productivity and an array of legislative and regulatory changes necessary to maintain a viable United States Postal Service.
“The crisis we’re facing gives us an historic opportunity to make changes that will lay the foundation for a leaner, more market responsive Postal Service that can thrive far into the future,” Potter said, adding that there is no one single answer or quick fix to the crisis.
According to the USPS, they are at a tipping point due to the combined effects of the economic recession, increased use of electronic communications and its obligations to prepay Retiree Health Benefits.
Mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020, according to the USPS, which represents a 37 percent decline in First-Class Mail alone.
The USPS said that they have developed and begun implementing a range of cost-reducing and revenue-generating initiatives, but they aren’t enough to close the financial gap between revenue and costs. For the American public to continue receiving affordable universal postal services from a self-sufficient Postal Service, according to a spokesperson, these issues need to be addressed quickly and comprehensively with legal and regulatory action.
The USPS recently outlined a 10-year plan, entitled “Ensuring a Viable Postal Service for America,” to address the declining revenue.
“The future depends on a suite of solutions that takes a balanced and reasonable approach, one that cuts across every aspect of our industry but one that, in the end, does the greatest possible good for our stakeholders and the American public,” Potter said.
If the USPS takes no action, according to their statistics, it will face a cumulative shortfall of $238 billion by 2020. Potter outlined a number of actions that could amount to as much as $123 billion in savings during that same time period. These actions build on the Postal Service’s record of saving more than $1 billion every year since 2001 and include continuing to aggressively control costs and eliminating hundreds of millions of work hours, according to Potter.
Despite these efforts, an estimated $115 billion shortfall will remain, according to Potter. Some of the ideas outlined in the business plan include restructuring the retiree health benefits payments, adjusting delivery days to better reflect current mail volumes and customer habits and continuing to modernize customer access by providing services at locations that are more convenient to customers, such as grocery stores, pharmacies, retail centers and office supply stores.
“The Postal Service will remain a vital driver of the American economy, an integral part of every American community and delivers the greatest value of any comparable post in the world. If given the flexibility to respond to an evolving marketplace, it will continue to do so far into the future,” said Tom Gaynor United States Postal Service Northeast Area Communications Programs Specialist. “The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.”
The American Postal Workers Union (APWU) has been vocal with their protest of the plan to reduce mail delivery from the statutorily mandated six days to five days.
APWU President William Burrus condemned USPS proposals to reduce mail delivery to five days per week, saying, “It would be the beginning of the demise of the Postal Service.”
“The assertion that the Postal Service must initiate major changes in its business plan to survive a grave crisis is false,” he said. “It masks the central cause of USPS financial difficulties: the Congressionally-imposed requirement to prepay retiree health-care obligations.
“Absent this crippling financial burden, the Postal Service would have experienced a cumulative surplus of $3.7 billion over the last three fiscal years, despite declining mail volume, an economy in chaos, and electronic diversion,” the union president noted.
“The USPS has achieved unprecedented savings through productivity increases, a series of cost-cutting initiatives, and sacrifices by workers,” he said. More than 100,000 jobs have been eliminated through attrition over the last two-and-a-half years, Burrus pointed out, and workers have begun paying an increased share of health insurance premiums.
“The requirement to pre-fund retiree health-care payments would shift more than $75 billion from postal rate-payers to the federal budget over a 10-year period, at a rate of more than $5 billion per year,” Burrus said. “This requirement is undermining the Postal Service.”
The proposal to eliminate Saturday mail delivery must be reviewed and approved by Congress before it could be enacted.