February 9, 2013

Saturday Mail Deliveries May Be Discontinued

Since 2008, the total mail volume has dropped from 202.7 billion deliveries to 160 billion in 2012. Plans to drop first class mail deliveries starting in August of this year were announced this week. This move is expected to save the USPS $2 billion annually. Postmaster General Patrick Donahoe said, “it’s an important part of our strategy to return to financial stability.”

Package deliveries will still continue on Saturdays. In recent years, online shopping has increased, and as a result, so have package deliveries.

The announcement sparked mixed reviews from Capitol Hill. In the past, similar plans were met with opposition. However, the general public supports the idea of a five day delivery.

Darrell Issa, a Republican from California and House Oversight and Government Reform Committee Chairman , along with Tom Coburn, a Republican from Oklahoma, who is the ranking member of the Senate Homeland Security and Governmental Affairs Committee  sent a letter to the leaders of the Senate and House supporting Donahoe’s plan. Issa and Coburn, the top Republicans on committees with jurisdiction over USPS, and called the plan “common-sense reform.”

The opposition to the plan comes from lawmakers in rural states that rely on Saturday deliveries. Democratic Senator Mark Begich said, “this is bad news for Alaskans and small-business owners who rely on timely delivery to rural areas.” who was also concerned it would slow overall mail delivery including Social Security checks.

Last year the Senate passed a bill to prevent the halt of Saturday deliveries for at least two years, but it stalled in the House. Begich would have liked to see the Postal Service allow the Congress more time for a legislative resolution.

Begich also said, “We wouldn’t be in this situation if the House had done its job and passed a bill.”

House Speaker John Boehner, republican from Ohio, stated that the postal overhaul was a “pretty difficult” issue. He also said, “Congress needs to act. There’s no question about that, and I hope that we’ll act soon.”

More opposition comes from Cliff Guffey, the American Postal Workers Union president, who wants the solution to come from congress. “USPS executives cannot save the Postal Service by tearing it apart,” he said.

In a survey conducted at the main post office in Greenville, S.C., most people do not have a problem with the decision from Donahoe.

A woman, Crystal Heart, who was at the post office mailing copies of a local magazine with a story of her wedding photography business inside, stated, “I’m am totally OK with that. Anything that comes on a Saturday, I can wait until Monday if it is really important.”

A single mother, Danielle Bradley, in New Castle, Delaware was worried that a needed check would be missed, especially on long holiday weekends. “You can’t do the waiting thing when you’ve got a kid who is asthmatic,” she said.

One of the reasons that first class mail has declined since 2008, is more people are paying their bills online. The postal service recorded a $15.9 billion loss last year which caused them to default on its pension plan and has reached its borrowing limit, according to Donahoe.

“It’s put a tremendous financial pressure on the Postal Service,” he said.

Previously, to help relieve some of the financial burden, 193,000 jobs were cut and a consolidation of 200 mail processing centers were completed. Donahoe said that by the new plan the Postal Service will be able to eliminated more jobs through buyouts, retirements, and normal attrition.

The plan will have little effect on other deliveries except for an item that would normally be delivered on Saturday. Also with the plan, post office hours will not change, so if you get mail from a PO box you will still be able to pick it up on Saturday.

Package delivery is expected to rise as online buying increases. “America’s mailing habits are changing. This makes common sense,” Donahoe said. “The six-month lead time will allow businesses to adjust their production and delivery schedules.”

Since 2007, the USPS has had billion dollar deficits yearly, influenced by a bad economy, internet, and mandatory pre-funding of retiree health benefits.

In the last two fiscal years the USPS reported a $21 billion loss, $15.9 billion of that was just last year. To avoid bankruptcy they had to default on billions in retiree health benefit prepayments. The majority of the losses reported were from these benefits totaling $11.1 billion of the total lost last year. Other than labor related expenses, the USPS had a $2.4 billion loss in operating costs.

Donahoe is continuing to press for legislation for greater control of costs and to generate new revenues. He said, “We take no tax dollars. We do not want tax dollars.”

Image Credit: Bedrin / Shutterstsock

Facebook Twitter Pinterest Plusone Digg Reddit Stumbleupon Email