Card Sellers and Buyers: USPS may cut day of mail delivery
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USPS may cut day of mail delivery
Economic downturn has caused a steep decline in mail volume, postmaster says.
By Julianne Pepitone, CNNMoney.com contributing writer
Last Updated: January 28, 2009: 6:41 PM ET
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."
First Published: January 28, 2009: 4:32 PM ET
30
Economic downturn has caused a steep decline in mail volume, postmaster says.
By Julianne Pepitone, CNNMoney.com contributing writer
Last Updated: January 28, 2009: 6:41 PM ET
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."
First Published: January 28, 2009: 4:32 PM ET
30
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<< <i>i saw this, its an interesting thought, i wonder what cutting sat. delivery out would mean to the world. >>
Won't be Saturday. It'll be Tuesday or Wednesday, most likely Wed.
<< <i>i saw this, its an interesting thought, i wonder what cutting sat. delivery out would mean to the world. >>
I don't know what it would mean to the World, but it would sure Rock mine. I live in Rural Colorado and pack and Ship on Sat. a Lot and I mean a Lot. I have to get up at 5-6 AM on my day off just to do this as I already work 60-80 hours duing the week. Cutting Sat would seriously hurt me. But it's just the latest that seems to be getting worse each week. My Ex lost her job and now wants more Child Support and is taking me back to court again to get more money out of our Shared Equal Custody and my Wife's ex has been put on notice that he is probably being laid off soon, Carpenter his whole life, our second son is shared costody with him as well.
It is just getting down right scary.
Had a big meeting today at work to let us now that there is no intention of laying anybody off Now......everything is OK til at least June....But can you even trust that, it could change any day. How do you plan your life that way...........................
Neil
They need a different solution.
If it keeps going like it is, they will end up as a healthcare delivery company;
just like GMAC/NAV/F and MANY others.
Postage rates need to rise, younger employees need to be cut loose, standard
delivery times need to be slowed down.
Those of you old enough will recall
two a day deliveries to Businesses
once in the A.M.
& once in the P.M.
Those were the days!
<< <i>America simply cannot get along without mail delivery on business days.
They need a different solution.
If it keeps going like it is, they will end up as a healthcare delivery company;
just like GMAC/NAV/F and MANY others.
Postage rates need to rise, younger employees need to be cut loose, standard
delivery times need to be slowed down. >>
Come on Storm regarding cutting loose younger employees. It is the dead wood across America which is dragging down business with stifiling benefits and pension plans. For a business to be successful and profitable, the old pension system needs to be scrapped, older/slower workers need to be shown the door via packages and younger workers need to be placed under 401k/cash balance type pension plans with minimal to no guaranteed medical at retirement.
///////////////////////////////////
In a normal world, that would all be correct.
To save the USPS - and many other companies - and buy us some
time to implement the reversals of the fantasy benefit schemes, we
need to hold the most tenured workers on the line. Once they are
dumped they join the parasite pool that is sinking the USPS and
GMAC/NAV/F, etc.
Younger workers need to go. The old guys need to stay. They tried
it the other way around, and here we are. TONS of retirees at the
trough, and service cutbacks on the way.
The more retirees created, the worse the numbers will get. SOON,
the numbers will be totally out of control.
It costs NOTHING to dump young workers. It costs a fortune to dump
old workers.
I don't believe that problem is unique to the USPS, though...there are many people in many different positions, union jobs, and those in the private sector, who don't really justify the salary and benefits they are receiving. There's a lot of dead wood out there, and when you compound that with the amount of corruption and fraud and waste that goes on at all levels, including management, you're going to have serious problems in times like these.
Collecting 1970s Topps baseball wax, rack and cello packs, as well as PCGS graded Half Cents, Large Cents, Two Cent pieces and Three Cent Silver pieces.
<< <i> I honestly don't mean to offend any resident postal employees, but this is what happens when you pay people $60K a year in salary and bennies when they don't really have a unique set of job skills. I'm sure there are many, many competent people in the USPS who are worth the money, but are a lot of folks working there who wouldn't make 50% of what they're making now if they had to take their skill set into the open market.
I don't believe that problem is unique to the USPS, though...there are many people in many different positions, union jobs, and those in the private sector, who don't really justify the salary and benefits they are receiving. There's a lot of dead wood out there, and when you compound that with the amount of corruption and fraud and waste that goes on at all levels, including management, you're going to have serious problems in times like these. >>
Agreed, the problem is in no way limited to the USPS.
Looks like we're headed into the dark tunnel-- layoffs are expected to accelerate in '09, and I can't believe that the $825 billion in pork that they're about to push through is going to be anything more than a salve on a deep and festering wound. I tell you one thing-- I'd hate to be long on real estate in Beijing right now. As bad as we're going to get it, the Asians are just going to get murdered.
As will the Iranians, though, so I guess there's at least a silver lining.
The actual chances of this happening? The correct answer is zero.
<< <i>BOOPOTTS....IT AINT AS EASY AS IT LOOKS......take your average winter day in st paul....-10 degree wind chill....snow up to your a**....walk through that for 7 hours a day about 75 times a year.... 90+ percent of the work force could not do it......take your average summer day in texas.....98 degrees ....muggy as hell.....them there postal trucks have NO AIR CONDITION....WALK 7 HOURS A DAY....once again...90+percent of the work force could not handle it.....skill set....indeed >>
1) You're assuming I'm talking about the carriers.
2) You should take a shot at roofing. Ever carry forty 110 lb. bundles of composite shingles up a two story latter in 94 degree heat? Ever done it in the middle of a blizzard? Ever done this for 10 years straight?
Where's Shawn (Bigredmachine) when I need him? There are maybe twenty jobs in the lower 48 that require more manual exertion, day in and day out, then residential roofing, and yet the average roofer probably makes $11 an hour. With no benefits. Or vacation time. And sure as hell no pension.
If you don't believe me then take a hard look at the next roofing crew you run across. Odds are you won't see a single guy over 35. Meanwhile we've got mail carriers out there that are pushing 50.
Cutting a business day is retarded. My business ships 20-30 Priority packages every week day. I'm sure many other businesses do so as well.
Boo
Done some roofing and yes its one of the worst jobs in the world. My buddy runs a whatever needs done biz (handyman for the condo assoc). When the hurricanes hit I get the call for about 2 months Im on the roofs. Avg week blacking out atleast twice, scary. Florida heat is no joke. I do get decent pay however (15). But you better make sure your on the roof at the crack of dawn and not 3 in the afternoon. Id never do it if we didnt live on the ocean. Were usually workin on the beach so the 30 minute surf session gets you through the day.
Postal carriers are no joke either. What gets me it some of the setups in the small po's. Just a halfday of rearranging the work station would save them so much effort and time. The poor lady at the po has to turn her whole body and move 3ft everytime to get the sticker makes no sense.
<< <i>
<< <i>BOOPOTTS....IT AINT AS EASY AS IT LOOKS......take your average winter day in st paul....-10 degree wind chill....snow up to your a**....walk through that for 7 hours a day about 75 times a year.... 90+ percent of the work force could not do it......take your average summer day in texas.....98 degrees ....muggy as hell.....them there postal trucks have NO AIR CONDITION....WALK 7 HOURS A DAY....once again...90+percent of the work force could not handle it.....skill set....indeed >>
1) You're assuming I'm talking about the carriers.
2) You should take a shot at roofing. Ever carry forty 110 lb. bundles of composite shingles up a two story latter in 94 degree heat? Ever done it in the middle of a blizzard? Ever done this for 10 years straight?
Where's Shawn (Bigredmachine) when I need him? There are maybe twenty jobs in the lower 48 that require more manual exertion, day in and day out, then residential roofing, and yet the average roofer probably makes $11 an hour. With no benefits. Or vacation time. And sure as hell no pension.
If you don't believe me then take a hard look at the next roofing crew you run across. Odds are you won't see a single guy over 35. Meanwhile we've got mail carriers out there that are pushing 50. >>
Funny you bring up roofing. I did this all through high school and part of college and I agree on your assessment. However, I consider these jobs motivators to go to college or obtain a skilled trade so they do serve and important role in our society.
The thing that pisses me off until no end is old people... when are they all gonna just get the hell out of my way???
<< <i>I really couldn't care less about a days difference in delivery time.
The thing that pisses me off until no end is old people... when are they all gonna just get the hell out of my way??? >>
Hey Crawler, without us Old People, you woudn't be here!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Neil
you have to cut the retired peoples pensions.....you have to take away eye care, dental, cut the med ins dramatically....
its being done write now in a lot of the banks...people who retired 5 years ago now have to pay for their med and dent ins to keep it the same......
not to mention the cost of the med ins goes up 18% a year.....HAS TO BE CUT
they wont touch 6 days a week except maybe in rural....
------------------------------
DJ
<< <i>I really couldn't care less about a days difference in delivery time.
The thing that pisses me off until no end is old people... when are they all gonna just get the hell out of my way??? >>
Hey punk go crawl back under your rock.
The system works OK here.
mathew
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