USPS Proposes Delivery Cut, Rate Hike in 2011
The U.S. Postal Service Tuesday proposed a number of changes to keep it operational over the next 10 years including a “modest” but unspecified exigent rate increase in 2011 and cutting out Saturday mail delivery.
Many of these changes would require Congressional approval, USPS CFO Joe Corbett told Direct Listline Tuesday.
Postmaster General Jack Potter made these proposals in face of ever-increasing declines in mail volume and revenue.
Specifically, overall mail volume is projected to fall from 177 billion in 2009 to 150 billion in 2020, a 37% decline in first class mail alone. First class revenue is expected to drop from 51% of all postal revenue today to about 35% in 2020, according to the USPS.
Potter proposed cutting out Saturday mail deliveries to better reflect current mail volumes and customer habits.
Although the USPS said consumer surveys indicated the public might go along with a delivery day cutback, doing this would require Congressional approval.
Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association was doubtful cutting a delivery day would save much money but said he would wait until later this month, when the postal service unveils specifics before the Postal Regulatory Commission.
“If it’s not going to save that much money, why do it,” he asked.
In addition, Potter proposed:
*An unspecified exigent postal rate increase, effective next year.
*Restructuring retiree health benefits payments to be consistent with what is used by the rest of the federal government and the majority of the private sector and address overpayments to the Postal Service Civil Service Retirement System pension fund.
Every year until 2016, the USPS is obligated to pay $5.4 billion into a fund to cover healthcare expenses for retired employees.
Also, a few weeks ago, the USPS Office of the Inspector General discovered that the USPS had been overpaying a separate fund to cover employee pensions for the past 40 years. To learn more click here http://directmag.com/postal/0122-postal-usps/index.html
Corbett said the House Subcommittee on the Federal Workforce, Postal Service and The District of Columbia will be examining this issue in hearings later this month.
Cerasale voiced support for this proposal. “We’ve been lobbying Congress on this for the past three years,” he says.
Potter also recommended:
*Providing postal services at such locations as grocery stores, pharmacies, retail centers, and office supply stores.
Corbett noted that the under current law, the USPS cannot close post offices simply for economic reasons. Cerasale pointed out that closing post offices could bring about backlash from individual member of Congress.
*Establishing a more flexible workforce that is better positioned to respond to changing demand patterns, as more than 300,000 employees become eligible to retire in the coming decade.
As things stand now, the USPS is still bound to honor its collective bargaining agreements with its four labor unions
*Ensuring that prices of Market Dominant mailing products are based on demand for each individual product and its costs, rather than capping prices for every class at the rate of inflation.
“If given the flexibility to respond to an evolving marketplace, the Postal service will continue to be an integral part of the fabric of American life,” Potter said.
