Network News

X My Profile
View More Activity

Postal Service Expects Steeper Declines

By Ed O'Keefe

The U.S. Postal Service has cut 25,000 jobs this year and mail volume will continue to drop into 2010 as it struggles to break even and return to profitability, Postmaster General John E. Potter warned today. The bleak outlook comes as the agency expects a $6.5 billion loss this year. It still expects a cash shortfall in excess of $1.5 billion.

"Unfortunately, I wish I could say we’ve hit bottom, but we haven’t yet," Potter told reporters at the start of this week's National Postal Forum, a mailing industry convention.

USPS anticipates delivering 180 billion pieces of mail this year, far below the record 213 billion delivered in 2006. Worse, Potter says mail volume will likely bottom out at closer to 170 billion pieces per year.

"Folks are looking at alternatives and there are some that simply will not return," he said. The agency has commissioned a survey of its largest customers in hopes of anticipating future workloads.

As if the migration to e-mail and e-commerce wasn't bad enough, the collapse of the housing and financial sectors have made the Postal Service fall faster and farther. Fewer housing starts mean fewer new addresses created each year. Potter said new addresses will drop from an average of 1.9 million per year to 1.1 million. The financial sector, which has long relied on the mail to transact and communicate with its customers, has also cut back on mail significantly. Last week's 2-cent increase for the price of first-class postage might also make it difficult for some customers, and Potter said the bump will not be enough to offset losses.

“What we really need to be talking about is how to do we find a path back to break even and then beyond break event to profitability," Potter said. He's seeking permission from Congress and the Obama administration to delay the prefunding of payments to an employee retiree health benefits fund, money that could help offset current losses. The service has also cut more than 10,000 city carrier routes in the last several years, saving about $100,000 per route and the eliminating the need for some vehicles.

Then there's the possibility of trimming a day of service, a suggestion Potter threatened earlier this year might be necessary someday soon. Lawmakers have all-but killed the cutback for now, but Potter discussed it as a realistic solution during today's conversation with reporters.

"With some minor exceptions, people have told me that if they have to adjust their operations, they can," he said.

Still, "Until people hear from us...they should count on getting the same great service that they’ve always got."

The Associated Press contributed to this report.

By Ed O'Keefe  | May 18, 2009; 3:25 PM ET
Categories:  Agencies and Departments  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Eye Opener: Geithner Needs Help!
Next: Eye Opener: Stimulus Progress Reports Are In

Comments

Imagine that - A Gov't agency that actually adjusts to changing times and economics by (gasp) decreasing staff!

Posted by: pgr88 | May 18, 2009 3:51 PM | Report abuse

The postal service is stupid because they could actually capatilize and dominate the very markt that is affecting them financially. That is, the latest thing is to digitize documents with a scanner and then send them over the Internet. Likewise, one can recieve digital mail and then read it or print it out. The great thing is that mail can be sent or received anywhere. Who better to offer this service than the US postal service since they have locations everywhere. It's stupid in this day and age for utility companies and other businesses to send hard mail to people when we could all get our bills electronically. But it takes a trusted business to offer this service. The postal service could set up a bunch of large flatbed scanners and then charge by the page to have them digitized. The customer could then send the mail at the post office, or take it home on a flash drive and send it themselves. The US postal service could team up with Adobe to make special software for the service.

Am I right about this?

I hate to see the US postal service be eliminated by private sector businesses who offer this service for a higher cost and with weak security.

Posted by: Jest4Fun | May 18, 2009 4:03 PM | Report abuse

Excuse me. I do 95% of my correspondence by email. Other than having to physically send reciepts to the office, I haven't bought a stamp in years. Almost any paper can be sent by email. Packets of merchandise are a different story. DHL, UPS, and FedEx are my preferences.

Scott

Posted by: ssmorehouse | May 18, 2009 4:09 PM | Report abuse

Jest4Fun wrote:
Likewise, one can recieve digital mail and then read it or print it out. The great thing is that mail can be sent or received anywhere. Who better to offer this service than the US postal service since they have locations everywhere. It's stupid in this day and age for utility companies and other businesses to send hard mail to people when we could all get our bills electronically.

**********

Wow, how about all the people who don't own computers, or have Internet access? Talk about dumb.

Posted by: ktchvl | May 18, 2009 4:13 PM | Report abuse

Imagine that - A Gov't agency that actually adjusts to changing times and economics by (gasp) decreasing staff!

Posted by: pgr88
*********************
ahhhh...yeah, especially since it is a quasi governmental agency that generates its revenue. Some people in the know (clearly not you, johnny populist) would say that the necessary cuts were at least 5 -7 years too late, that the financial problems and changes in how we get information have been a factor for a long time and the Postal Service knew better.

Posted by: LABC | May 18, 2009 4:13 PM | Report abuse

Yes, the US Postal Service could have capitalized to a large extent on the move to digital service had they been able to adjust and had their management been farsighted, but that would still require that they reduce their overhead, something that the our postal service has a difficult accomplishing.
at bulk mailers have come under the same inceases over time.

Private companies are already providing digital mailing service and making money at it. And, the mail is still sent through the USPO, which could have moved into digital service and cut off the secondary operations and they could have charged for the service making up for the money they have lost due to inefficiency. But, like most government entities, they are incapable of reacting swiftly to rapidly changing technology and the economy. Too bad. We will all miss them when they are finally gone.

Posted by: WaltSherryKaolcom | May 18, 2009 4:21 PM | Report abuse

Have a look at how many US car dealers are now cut off for a small number of sales each year. They had way too many for a long time. --- Our Postal Service has needed to do this for decades. Why can't we put postal branches inside of supermarkets, just like the banks have done for a while. In many small towns, the local general store IS the post office.

Posted by: isenberg888 | May 18, 2009 4:26 PM | Report abuse

To save money USPS
1. cut more than 10,000 city carrier routes
2. raised stamp prices
3. is considering cutting service
and
4. is trading their successful Cap City Brewery restaurant in DC for freebie space for more Smithsonian exhibits. Yeah, that makes sense.

Posted by: Mark20005 | May 18, 2009 4:40 PM | Report abuse

Unions. The SEIU has nearly bankrupted itself by placing King Obama in office and His Hinda$$ has placed SEIU Reps in key spots within his administration.

When we don't have vehicles to drive, but we have golf carts, when the freedom of choice, is subservient to those who lead us down a path of destruction, for they who have failed to plan, that is why King Obama needs to go in 2012 and we need a Conservtive Majority in both houses of Congress by 2010.

Down with the Monarchy, up the Patriots!

=================================
Have a look at how many US car dealers are now cut off for a small number of sales each year. They had way too many for a long time. --- Our Postal Service has needed to do this for decades. Why can't we put postal branches inside of supermarkets, just like the banks have done for a while. In many small towns, the local general store IS the post office.

Posted by: Computer_Forensics_Expert_Computer_Expert_Witness | May 18, 2009 4:40 PM | Report abuse

Maybe it's time to talk about Potter's $800,000 a year salary, and the thousands of $300/hr consultants on his payroll. Every major consulting firm in the greater washington area is on the USPS gravy train. But it's the little guys that suffer.

Posted by: August30 | May 18, 2009 4:43 PM | Report abuse

Lawmakers control what they can and can't do. Note that the article stated that lawmakers have all but blocked USPS attempts to eliminate 1 day of service. So they are being told to cut costs, but not service. And there's an uproar when the price of stamps increases. If/when the postal service disappears, I feel sorry for those people in rural areas NOT easily serviced by the private carriers.

Posted by: PatriceBrooks1 | May 18, 2009 4:53 PM | Report abuse

I wish USPS could jack up 4th class mail rates. Every day I get 3-5 pieces of unsolicited junk that I just toss. Any coupons or discounts I use I obtained online from vendors I dealt with. I pay bills online, and about the only personal mail I get are a few birthday and christmas cards.

Maybe with higher 4th class rates, less junk will get stuffed into my box. That's less for the landfills, too.

Posted by: semitone | May 18, 2009 4:58 PM | Report abuse

Shut it down and sell it off.

Posted by: htimothyjones | May 18, 2009 5:30 PM | Report abuse

Watch the flgs go half-staff when the labor cutsbacks hit...

Posted by: kase | May 18, 2009 5:36 PM | Report abuse

pgr88 wrote: "Imagine that - A Gov't agency that actually adjusts to changing times and economics by (gasp) decreasing staff!"
------------------------------
unlike the military...

Posted by: kase | May 18, 2009 5:42 PM | Report abuse

I dread going to my local suburban post office. Long lines, surly clerks, arrogant 'blame the customer' managers, inscrutable rules for sending small packages and items from home (just great for a person with a disability like me), and more than one or two recent bouts with lost mail. We have a good carrier who does allow me to maintain a degree of sanity. But try to get a response from a serious complaint filed on line or to a regional center by phone. And, the other day I waited four days for an item mailed from 70 miles away. I don't know what the solution is, but these guys are the General Motors of agencies, and I avoid them like the plague.

Posted by: rkgood | May 18, 2009 5:55 PM | Report abuse

Get used to it, pretty soon this is gonna be your health care system

Posted by: nowanna1 | May 18, 2009 6:19 PM | Report abuse

"He's seeking permission from Congress and the Obama administration to delay billions of dollars in payments to an employee retirement fund, money that could help offset current losses."

Everybody wants to join the bandwagon! Do you get the feeling that the big shots really want us to work for free?

What ever happened to business planning? Are they just now realizing that everybody is sending emails instead of regular mail? Wake up, CEO's and top management!

Posted by: bginNC | May 18, 2009 6:22 PM | Report abuse

Seems to me that the post office is the scapegoat for a lot of people. The fact is that Benjamin Franklin, our first postmaster, recognized that a democracy requires communication among its citizens, and the post office has been performing that task much better then most give them credit for. I happen to run a mailing company, and I can attest to the fact that, especially over the past decade as the PO has been implementing more modern technology, mailing service is really unbelievably efficient.

In the '90s I still got a fair number of complaints by customers about mailings not being delivered timely or at all, but these days even the bulk mail, now actually called standard mail and it's third class, second class is for periodicals, usually gets delivered within the week. First class mail is often delivered next day - especially if it's addressed within our metropolitan area.

Universal service, meaning that the post office is obligated by law to deliver mail to every single address in the country, is something that no other private communications company is required to provide (telephone, internet, cable) , and the post office does it extremely efficiently and mostly with a smile, at least here in Brooklyn, NY.

Finally, how many of us in the private sector would love to have the benefits of a union job that most in the post office enjoy. Union membership has been ravaged in the private sector by greedy corporations, albeit with the approval of stockholders, and so we are trained to think that union workers are lazy and don't deserve their pay. Yet our parents and grandparents were able to live a good middle class life because of the hard won rights that unions had won for them. How many of us will have security in our old age with a union pension. Yes it's true that some of us will have a million or two stashed away because we were on the plus side of the change in the American economy, and while most of the rest of us feel that it may yet happen to us, it won't.

Posted by: gbrook | May 18, 2009 6:39 PM | Report abuse

AS a former Postal worker (1984+1997) this is sad, but not surprising. Congress told the USPS management when they removed tax support in the 1970's:"run it like a business" and they did just that -GM, Lehman Bros., AIG. But Congress didn;t stop there, they handcuffed them in many ways, but erfused to allow them to set their own rates, and hours, and terms of service. Congress also took away all the monopolies except first class (which no one uses anymore), parcels - UPS in the 1950s. Overnight mail - FEDEX in the 1980's, and even ordered the USPS to allow their competitors to put FEDEX and UPS boxes in front of Post Offices. Would any other industry do that and remain competitive? As for the comment about unions, two points: 1. Fedex and UPS are unionized and they are not hurting - one difference by the way is that the USPS unions can't strike for higher wages and better working conditions like the "real" private guys can. 2. Postal workers are not members of the SEIU (with a few exceptions) they are members of the NALC and APWU. As for attitudes, most of my former colleagues were hard working, if not always pleasant - given the way they were treated by management, I can't blame them. And I have had many more unpleasant experiences in banks and other "private sector" retail settings than I ever did in Post Offices. Most of the supervisors I served under were incompetent, or worse (remember "going postal"), many being promoted to management based on nepotism or "to get their lazy asses off the workroom floor." Despite this, the mail was over 90% on time anyway. USPS management spent billions on "sponsorships" in a doomed effort to be more corporate, and they got their nice bonuses regardless of how far they were sliding. Of course the final straw was the Congress' insistence that the USPS pay for retirements of the hundreds of thousands of workers hired to deal with the surge in mail volumes in the 1980's and 1990's. No it isn't the workers or attitudes, it is mismanagement and a confused vision by Congress that is killing the USPS. I for one, do not like emailed Christmas cards and tracking down a parcel across town because it was sent by FEDEX or UPS which does not have a local office where I can pick it up. Maybe it is generational, but I think we will rue the end of the USPS, if it comes - as it appears to be ...

Posted by: GoinPostal84 | May 18, 2009 6:43 PM | Report abuse

There is still a lot of fat at USPS--the GS15 equivalents don't pay anything for health ins and when they retire, some get a final move payed for--how sweet it is.

Posted by: FairfaxAl | May 18, 2009 6:45 PM | Report abuse

I don't know were they expect all these citizens who are losing jobs in this country to find employment. I'm a senior citizen who has been through more than a few economic down turns, nothing like this.

Posted by: shipfreakbo214 | May 18, 2009 7:43 PM | Report abuse

May 18th, 2009 Monday 7:30 P.M.
"Postal Service Expects Steeper Declines"

According to news sources,, The USPS lost 2.7 Billion Dollars in 2008 and already in 2009 has lost 2.3 Billion Dollars.

Job insecurity of 25K jobs lost in 2009 to cut cost.

The unsecured people must be secured to secure the Government.

The Answer for America and The World is, 'A Free Energy Rich World Nation and Well Off Persons, with equality of "Scale Clean Pay Checks" and elimination of inflation, inequality and Disparities of Wage Difference" and at the same time cleaning up the ghetto decay.

The USPS must adopt better Mail Robots and change The Vehicles to *Long Distance Free Energy Vehicles and also begin the workers with 'minimum wage' scale pay checks.

By eliminating The avenues of insecurity that lives above the means of the Government, The USPS will be a proficient and can do place of business and work. But hug tied ideas go a very short polluting way.

Democracy can only work if given a chance at The Gold.

What is NAU2010AMERO in The "New World Order" if it does not eliminate the inflated, disparate, disorders!?!.

By adopting better programs to secure the people, the Government and Future World, it is a step closer to Please "God" and Help Clean and Heal Our Fragile Free Energy Mother Earth.

All at once, One Program and One Destiny.

United World Unification Awaits.

Thank You to America/Washington Post/America for letting us comment on Federal Eye.

With Friendship, Sincerely, i,(Us). YHWH6

Posted by: YHWH6 | May 18, 2009 7:50 PM | Report abuse

As a small online business which ships almost all my packages via USPS, (no one is cheaper for my needs), I know how good of a job they do. I ship around 2000+ packages a year and about 1 or 2 per year get lost and about the same number get damaged. They do a fine job and without them I would probably be out of business. The other shippers do not offer the services at a reasonable price that I need.

Posted by: jdbassjr1 | May 18, 2009 8:24 PM | Report abuse

Why is this Bush apointee still working at the Post Office? This is the man who sees no problem with buying million dollar homes for management. He should be demoted to letter carrier.

Posted by: truth1 | May 18, 2009 8:59 PM | Report abuse

The USPS was giving out management bonuses long before it became unfashionable in this current economic downturn, on the basis of cooked numbers that floor supervisors would submit, and regardless of profitablity for the fiscal year. Talk about delaying payments for pensions to retirees really irks me; the retirees have paid into retirement accounts in good faith and are entitled to their payouts. As for health insurance, retirees pick up the cost of just about all of that upon retirement, so the USPS arguements about run-away health costs are just so much hoo-ey and baloney. It's always easy to blame workers for a company's problems when mis-management is the one responsible; this has become fashionable-the "American Way".

Posted by: carizmojones | May 18, 2009 9:26 PM | Report abuse

U.S POSTAL SERVICE IS A MONOPOLY BUT THEY LOSE $6.5 BILLIONS EVERY YEAR. EITHER THE OFFICERS WHO RUN U.S.POSTAL ARE EXTREME MORONS OR THIEVES.

Posted by: mtavro | May 18, 2009 9:38 PM | Report abuse

You can go back to the Reagan administration and the criminal conspiracy on the Board of Governors, the firing of the PMG, replacement by former American Airlines CEO, subsequent awarding of airmal contracts to American Airlines, and lowering of mail delivery standards.

How much has the USPS lost to counterfeit stamps from Asia? Potter's raised his own salary and perks and those of top executives while continuing to reduce service and demoralize employees. Bulk mailers continue to receive discounts greatly in excess of the costs USPS avoids.

Mail delivery times are greater than a century ago, when trains delivered mail and people to thousands of towns across America.

The USPS cuts carrier routes, but has more delivery addresses every year. Fewer carriers must deliver more machine-sorted mail to more addresses every day.

Once there was the Post Office Department, which served the American People.

Now there is the USPS which serves it's corporate masters like all other government branches.

Service requires people.

PMG Potter started in management. He's never actually had any experience with the post office's "core business" - mail transportation and delivery. That's why his shirts get tighter.

Too many Republican appointees in the USPS, starting back in the Reagan crime spree. Part of the conspiracy was to plant people at USPS headquarters.

The WaPo covered it (and virtually no other paper), check the archives.

Posted by: georgepwebster1 | May 18, 2009 9:45 PM | Report abuse

Imagine that - A Gov't agency that actually adjusts to changing times and economics by (gasp) decreasing staff!

Posted by: pgr88 | May 18, 2009 3:51 PM | Report abuse

----------------------------------------------

Brilliant. That's 25,000 more unemployed, increased costs of unemployment, lost health coverage, etc., etc., with the attending social costs to the country. Whee !!

Too bad you have neither
1. a good grounding in Economics, or
2. the intellect for more than regurgitating someone else's talking points.

You might then "get" how really off-base your snarky little comment is.

Did you vote for Bush, too? That worked real.

Posted by: phoenixresearch | May 18, 2009 10:07 PM | Report abuse

Please cut the delivery days to three or four per week!!!

There is no excuse for increasing the rates when a major portion of what is delivered is junk mail.

Don't need it....don't want it!

Posted by: buzzsaw1 | May 18, 2009 10:09 PM | Report abuse

"I HAVE A GREAT IDEA to fix both the health system and the USPS in one fell swoop!....Require all mail carriers to become doctors!!...They already make house calls every day...with the declining mail volume they could then treat and diagnose your neighbor's illness!

Posted by: RealityBites | May 20, 2009 10:15 AM | Report abuse

"MATV" Mail Across The Void is an online database which allows anyone with a computer worldwide to send documents and data files for next day & same day delivery to any address in the United States for rates far below what the conventional carriers are charging. The database is located at www.mailacrossthevoid.us The service is extremely simple to use and is adding enhanced services that will make this company a household name in the very near future. Anyone, anywhere, at anytime can access this service. The company is located at 87 Main Street, North Reading, MA 01864, 800 835-4723

Posted by: emorando1 | May 23, 2009 10:13 AM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company