Retail executives blast Saturday mail cuts
CVS Caremark, one of the nation's largest pharmacy chains, warned Monday that patients receiving prescriptions by mail can expect higher costs if the Postal Service drops Saturday deliveries and competitors raise weekend rates.
"Mail order pharmacies and other merchants will have no choice but to shift these costs to patients," CVS Senior Vice President Kenneth Czarnecki told members of the Postal Regulatory Commission on Monday at a hearing on the future of American mail delivery held in Chicago. "These added costs not only impact patients’ pockets, but will also place significant fiscal strain on our health care system."
CVS shipped more than 50 million prescriptions by mail in 2009, 90 percent of them with the Postal Service, said Czarnecki, who worried that delivery cuts would change his company's business model.
"Eliminating Saturday delivery sets a precedent that would open the door for additional service cuts in the future," Czarnecki said.
Other retail executives and the publishers of small newspapers also said they oppose Saturday cuts, arguing they would be negatively impacted by the move.
John R. Seebeck, marketing director for furniture chain Crate and Barrel, said his company reluctantly supports Saturday cuts only if the mail agency keeps postage rates low.
"We would rather adjust when a customer hears or interacts with us – vis-à-vis a five-day week service schedule -- versus the necessity of discontinuing mailing a customer altogether due to rate increases," Seebeck said. The company also urged the Postal Service to adopt greater labor flexibilities, make changes to its pension system, close unneeded post offices and offer more goods and services at postal retail outlets in order to generate more revenue and keep postage rates down.
Christopher Huckle, publisher of the Cadillac News in northwest Michigan, said delivery cuts would irreparably harm his Monday to Saturday publication and delivery schedule.
"It dismays me to discover that even as important daily newspapers like ours grapple with changing reader habits, a down economy and fiscally-strapped advertisers, the element that is most likely to force us to change our business plan comes from a distribution vendor, not a change in our market or our readers," Huckle said. Saturday mail cuts would mean less advertising revenue, demand for lower subscription rates, and staff layoffs, he said.
Despite the gloom and doom, the Postal Service cutbacks have the support of media giant including Time Warner, which publishes 20 major magazines. Three of the mail agency's largest customers, movie mailer Netflix, AT&T and Bank of America have yet to issue an opinion.
The PRC will hold two more town hall forums to hear from business leaders and everyday mail customers on Wednesday in Rapid City, S.D. and Monday in Buffalo. The panel is expected to issue a formal, nonbinding opinion on the future of the Postal Service at some point this fall.
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