USPS may cut day of mail delivery

[Auburn85 438]

http://money.cnn.com/2009/01/28/news/econo...sion=2009012817

By Julianne Pepitone, CNNMoney.com contributing writer

NEW YORK (CNNMoney.com) -- The U.S. Postal Service may be forced to eliminate a day of mail service because the economic downturn has led to plummeting volume and revenue, the postmaster general said in Senate testimony Wednesday.

Postmaster General John E. Potter told a U.S. Senate subcommittee he wanted to eliminate the requirement to deliver mail six days a week to every address in America.

If the recession continues to hammer at USPS revenue, six-day delivery may not be possible, Potter said. Federal law has mandated the six-day schedule since 1983.

In fiscal 2008, total mail volume fell by more than 9 billion pieces - 4.5% -compared to the previous year, Potter said. And the agency suffered a greater-than-expected net loss of $2.8 billion last year, he added.

"The real problem is that the Postal Service needs reform," said Michael A. Crew, professor of regulatory economics at Rutgers University, whose 2009 book "Handbook of Postal Reform" argues for USPS privatization.

"The Postal Accountability and Enhancement Act of 2006 was supposed to make the agency competitive and bring regulations into the 21st century," Crew added. "But it just painted over the cracks, and they're still struggling."

USPS is "a vital economic engine in our national economy," Potter said, noting that USPS is the country's second-largest employer and the mail affects both jobs and commerce.

"We could experience a net loss of $6 billion or more this fiscal year," Potter told the subcommittee. That shortfall would exceed the Postal Service's credit limit under current law.

"We believe that legislative relief is necessary to preserve the nation's mail system," Potter said.

Could a five-day schedule kill demand?

But cutting a day of delivery is just one option, and it may not be the most beneficial one, Crew said.

"Six-day delivery is much more attractive than five days," he said. "If that change affects demand, it could hurt volume even more."

Still, Crew noted the postal systems in other countries like Canada already operate on a five-day schedule.

Another option: Instituting the abbreviated schedule in the high-cost rural areas and maintaining six days in high volume areas, instead of cutting a day across the board, Crew said.

Health benefits

He also asked Congress to change the payment schedule for funding its retirees' health benefits. In 2008, total retiree health benefits costs came to $7.4 billion - almost 10% of the annual operating budget, Potter said.

The Postal Law of 2006 requires accelerated prepayment of future retiree health care costs. USPS "is the only public or private entity required to prepay health benefit premiums at these extremely high levels," Potter said.

Potter said a modified schedule of payments would allow USPS to focus on its financial problems. The proposed change would neither increase the health benefit premiums paid by current or future USPS retirees, nor would it affect their benefits, he said.

Crew predicted USPS will receive help with their "ambitious schedule."

USPS has tried to cut operating costs over the last few years, Potter said, but the recent decline in economic conditions is too steep for the agency to be able to respond.

He added the agency has reduced its work force by more than 120,000 employees since 2002.

"Many people are getting bailouts now, so who knows?" Crew said. "Even if it's not everything USPS is asking for, I think they will get some type of relief."

[Auburn85 438]

http://www.washingtonpost.com/wp-dyn/conte...2903745_pf.html

Five-Day Mail Delivery? Not So Fast.

By Joe Davidson

Friday, January 30, 2009; D03

The chances that Congress will allow the Postal Service to cut one delivery day each week are growing slim. Postmaster General John E. Potter asked Congress for that flexibility as a last resort to save money in the face of tumbling mail volume and revenue.

It wasn't a welcome suggestion when he testified before a Senate subcommittee Wednesday, and now comes word that a key member of Congress will block the request.

The chairman of the House Appropriations subcommittee on financial services and general government, which controls the federal portion of the U.S. Postal Service budget, says no way. Rep. José E. Serrano (D-N.Y.) said "I will retain the prohibition on service cuts in my bill."

Note the lack of any "we" or "the Congress" in his comment. Subcommittee chairmen of the House Appropriations Committee are often called "cardinals" because of their power. Cardinal Serrano has made it clear that he will use that power to maintain six-day deliveries.

"People depend on regular mail delivery and would be greatly inconvenienced by missing a day's delivery," he said yesterday. "The Postal Service must manage its operations in ways that will not cause consumers to miss out on mail service."

Cutting the number of service days also has no fans among the post office unions.

William H. Young, president of the National Association of Letter Carriers, which represents those who deliver mail in cities, said it "will vigorously resist any legislative attempt to slash the number of days of delivery."

He also called the issue a red herring, because Potter said reducing service days is not his first priority. Young agrees with Potter on the need to reschedule Postal Service financing of retiree health benefits. "Existing law requires USPS to do something no other agency of the federal government, no state or municipal government, and no private company in the Fortune 500, or as far as we know, anywhere, is required to do: to pre-fund its retiree health obligations," Young said. "While it certainly makes sense to gradually pre-fund such long-term obligations, it makes no sense to maintain such an onerous schedule."

In a message to his members, William Burrus, president of the American Postal Workers Union, said losing one day "would stretch to three days when the additional day is combined with Sunday and a Monday holiday. Such delays will drive essential mail to private carriers, who will continue to deliver seven days a week."

Burrus noted that Potter did not mention layoffs in his testimony. Postal workers apparently don't have to worry about that, at least for the moment.

"Contractual protections against layoffs require management to engage in a detailed process that includes severance pay for employees who volunteer to retire early," Burrus said. "These requirements would make it extremely expensive to lay off employees, so, while layoffs were feared, this possibility no longer seems to represent a threat."

Whistleblower Protections

Whistleblower advocates were giddy this week as it became clear the House would include tough whistleblower protection provisions in the economic stimulus package it approved Wednesday.

Now the bill goes to the Senate. Advocacy groups remain optimistic, but they aren't taking anything for granted.

They know that two measures in the legislation -- one calling for jury trials in some whistleblower cases, another covering national security officials -- could be Senate tumbling blocks because they have proven to be so in the past.

But because the two measures are part of the number one legislative priority for Congress and President Obama, "those concerns will be less problematic," predicted Danielle Brian, executive director of the Project on Government Oversight.

The Senior Executive Association, however, has a problem with the jury trial provision. "The mere threat of a jury trial would serve as a deterrent to effective management," the association, which represents civil servant executives, said in a letter the Senate leadership yesterday.

Contracting Oversight

Sen. Joseph I. Lieberman (I-Conn.), chairman of the Homeland Security and Governmental Affairs Committee, wants to get a handle on federal government contracting, which is growing like crabgrass. Yesterday, he announced he is creating an ad hoc subcommittee on contracting oversight, chaired by Sen. Claire McCaskill (D-Mo.).

"Management of federal contracts is one of the greatest operational challenges facing the federal government," Lieberman said. "Spending on federal contracts rose to an astounding $532 billion last year. And for years the Government Accountability Office has listed government contracting on its list of programs at high risk of waste, fraud, abuse, mismanagement, or in need of comprehensive reform. This is a problem area that needs as much oversight as we can possibly muster."

It's a good thing McCaskill is a former prosecutor and state auditor. She's going to need those skills to sort through the can of worms that is federal contracting.

[otterinbham 0]

Well, let me ask the question. Who really sends out a lot of mail nowadays? Here's our life:

-- Outside of mailing party invitations and Christmas cards, all our contacts with friends and relatives are via telephone and e-mail.

-- All my invoices to clients are electronic. What's more, I'm considering a paypal account with a five-day discount for quick payment.

-- We pay all our bills electronically.

-- That leaves Netflix. And even that is beginning to give way to electronic distribution.

So, aside from bills, client checks, Netflix, and a TON of junk mail, what are we using the USPS for anymore? And the cost per impression for Direct Mail is quickly getting prohibitive, unless you really narrow things down.

It's funny. In Victorian England, they had six-seven deliveries a day.

[Tigermike 4,246]

-- All my invoices to clients are electronic. What's more, I'm considering a paypal account with a five-day discount for quick payment.

When I lived in Mobile, I owned a small business and on every invoice offered 2 - 10, 1 - 15 & Net 30. There were only a couple of business that took advantage of the discounts. But it was four of my largest accounts and it was great to keep the $$$$$ turning over quickly. That was before electronic billing (late 70's, 80's & early 90's) and I am thinking it would be a lot easier and quicker to bill and pay with the new technology.

[OldNewby 27]

Call me half-Victorian.

I do not pay my bills electronically. I do not do Netflix.

I do invoice my clients electronically. I do mail birthday, anniversary and Christmas cards.

Agreed that the tons of junk snail mail is and has been out of hand - and I think they get a darn discount on rates for their s***.. I go through shredder after shredder because of it. Especially maddening are the catalogs that not only have your name/address on the cover, but also your name/address inside on an order form.

Living in a rural area, USPS can cut Saturday delivery/pickup, afaic. They can even go to Mon/Wed/Fri, I can plan.