USPS to consider cutting one day of service
The United States Postal Service posted a US$3.8 billion loss in the 2009 fiscal year, following a run of annual losses. To help offset those losses, US Postmaster General John E Potter is asking Congress to consider a plan of action that would include the elimination of one day of postal service.
To find solutions, the USPS examined revenue, volume and consumer trends. It defined more than 50 possible actions to realistically address volume declines that will not return, increasing health care and delivery costs, and dramatic changes to consumer behaviour.
The Postal Reorganisation Act of 1970 removed tax-payer funding and placed constraints on USPS’s operations. These constraints prohibit the agency from closing small branches based solely on economic factors, and prevent it from expanding its services beyond postal delivery.
“The future depends on a suite of solutions that take a balanced and reasonable approach – one that cuts across every aspect of our industry but does the greatest possible good for our stakeholders and the American public,” Potter said.
Mail volume is predicted to fall from 177 billion in 2009 to 150 billion in 2020. That represents a 37 percent decline in first-class mail alone. Revenue contributed by first-class mail will plummet from 51 percent today to about 35 percent in 2020. “If the postal service stayed status quo over the next 10 years, it would experience a combined loss of US$238 billion,” said Arizona USPS spokesman Peter Hass.
In addition to the reduction in one day of service, the other large change the post office is seeking is the removal of a requirement forcing the entity to fund employee retiree health benefits in advance. It is the only company in the USA that is required to do so at such high levels.
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