The Postal Service's grim route forward
Updated 12:05 p.m. ET
The U.S. Postal Service issued a worst-case scenario cry for help on Tuesday, anticipating $238 billion in losses in the next 10 years if lawmakers, postal regulators and unions don't give the mail agency more flexibility in setting delivery schedules, price increases and labor costs.
The estimates released Tuesday also predict that letter carriers will deliver just 150 billion pieces of mail in 2020 -- a 26 billion-piece drop from last year as Americans shift more of their correspondence and transactions to the Internet and as marketers shift from first-class mail to the cheaper standard-mail option.
"What we wanted to do in the Postal Service is be realistic that this is occurring," Postmaster General John E. Potter said at a briefing for a small group of reporters Monday. "We wanted to look ahead to determine what the magnitude of those changes were, and we wanted to build a plan to react to those changes and continue to provide universal service to the American public."
The agency narrowed that list down to five key areas. Read through them, vote for your favorite and then leave your thoughts in the comments section below:
(1) Products and services: Officials plan to create new products, services and modes of delivery, including "hybrid mail products" that allow some deliveries via e-mail. "That option is a double-edged sword, because while you can capture some of the revenue, it also could accelerate volume declines," Potter said. Finally, the mail agency wants to develop new options for advertisers that previously used newspapers to reach customers.
(2) Pricing: The Postal Service wants the Postal Regulatory Commission to give it more pricing flexibility and may use some exigent price increases -- or price jumps that can occur on a temporary basis to raise emergency funds. The agency will also consider raising rates on periodicals, nonprofit mail and media and library mail -- deliveries that create a $1 billion shortfall the agency currently subsidizes.
(3) Service levels: Three things to consider here: delivery time, delivery frequency and delivery locations.
The first part would increase the amount of time it takes for a letter to get from you to the intended recipient, meaning a mailing that used to take two days to arrive might instead take three to five. But there's an important problem: Delivery delays could severely impact financial institutions and customers who rely on quick turnarounds. Those who get medications through the mail might also suffer.
The Postal Service is also convinced that this is the year lawmakers will cut Saturday mail deliveries. Depending on which poll you read, anywhere from 50 to 70 percent of customers support the cut. But post offices and post office boxes would still be open and accessible on Saturday.
Finally, the Postal Service wants to close thousands of post offices in the coming years and then move some postal products and services to nearby supermarkets, pharmacies or coffee shops.
(4) The workforce: More than 300,000 postal workers will either retire or voluntarily depart in the next decade, Potter said. The agency plans to take advantage of that trend by increasing its use of part-time or flex workers. Expect flexibility and health and benefit costs to dominate forthcoming labor negotiations.
(5) Government support: Potter wants to convince lawmakers that it's time to do away with pre-paying its retiree benefits -- a $5 billion annual charge that no other major corporation or federal agency has to pay. The agency will not seek subsidies for its universal service -- even though it can. The agency will not seek taxpayer support due to the ongoing downturn, Potter said.
Leave your thoughts in the comments section below
| March 2, 2010; 9:00 AM ET
Categories: Agencies and Departments, Congress
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