An Unhealthy Postal Prognosis
In the latest move to help forestall financial Armageddon, the U.S. Postal Service and Mailers Technical Advisory Committee have decided to poll business mailers on how they’d feel about cutting back delivery to five days.
They already know the answer.
Back when the idea was first floated in January, mailer groups generally took a dim view.
“The thing that raised great concern for us is that people are just going to leave the postal service and never come back,” said Jerry Cersale, senior vice president of government affairs at the Direct Marketing Association who pointed out (and probably rightly) that cutting a day’s mail service might cause a such a large volume drop as to make any cost savings meaningless To see what he said, click here.
Despite opposition from mailers, unions and others, Postmaster General Jack Potter predicts that five-day delivery will eventually come to pass (even though it can’t happen unless Congress and President Obama say so).
But what’s an executive to do when his organization is hemorrhaging billions of dollars a year with no end in sight and it’s legally obligated to provide universal service at fixed rates?
He has to try to cut costs and thinks five-day delivery might help.
As in society at large, healthcare is one of those major costs and nobody wants to deal with them.
The USPS has to fork over more than $5 billion each year to prepay for the healthcare obligations of employees who will retire in the future until 2016—something no other government agency is required to do.
Some in the industry hope Congress this year will pass H.R. 22, a bill that might ease this burden by reworking the USPS’S payment schedule.
But with all the carrying on about healthcare in the nation as a whole, is Congress likely to think much about the USPS?
Especially after the 11-year struggle it took to pass the Postal Accountability and Enhancement Act in 2006 which, among other things was intended to make postal rate hikes more predictable and bearable.
September 2nd, 2009 at 10:12 am
There is one error in your article. The USPS must prepay healthcare for future retirees not former employees. We must prepay healthcare for retirees that have not been hired yet.
September 2nd, 2009 at 2:54 pm
Thanks for the update, Larry. David Robinson recently provided a first-hand account that seemed to indicate that mailers were becoming open to the USPS plans. Perhaps everyone else having to deal with their own cut backs created an air of understanding. Worth a read at
http://postalupdates.pbbiblogs.com/2009/08/27/mailers-get-the-business-of-mail/
September 2nd, 2009 at 5:06 pm
Common sense suggests eliminating Saturday thats why it likely won’t happen given the outrageous bureaucracy involved. The argument that that will drive more people away is not relevant. Progress and never ending price increases are what is driving people away. The average person could not care less if there was mail on Saturday. Most people would love to have an extra day off from bills and what they might consider to be Junk Mail. Kudo’s to Postmaster Potter for trying to run this like a business.