Potter To Lay Out New Business Model For USPS
Last October Postmaster General John E. Potter called fiscal 2009 “devastating” and said change was coming.
In that October address to the National Press Club, Potter said: “We’re facing cost requirements that just can’t be squared with the realities of the business. We’re at a crossroads. The status quo just won’t do any more. We have to change. We have to make some important public policy decisions about the future of the Postal Service. The consequences of inaction are just too great.”
As a result, Potter will unveil an action plan for the future of the U.S. Postal Service on March 2 at the National Transportation Safety Board (NTSB) Conference Center in Washington, D.C. Potter will announce a new business model for the USPS, which lost $3.8 billion in fiscal 2009, or $1 billion more than it lost in fiscal 2008. Total mail volume for the fiscal year declined 13% to 177.1 billion pieces, from 202.7 billion pieces in 2008.
In a media advisory released today, it says the USPS is “facing serious and substantial challenges: declining mail volume, increased use of the Internet for bill payment and presentment, a lingering recession and legislative constraints on how and when we can close Post Offices or what types of products we can sell at retail. After four months of intense research and discussion, the Postal Service will announce an action plan to address these concerns, as well as a number of steps necessary to close a substantial gap by the year 2020.”
What’s more, the advisory says the USPS has decided on a future path that “calls for greater business model flexibility and changes to the way it does business.”
The USPS finds itself in a financial mess, thanks to its biting annual pre-payments for retiree health benefits, coupled with a massive decline in mail volume. Potter’s proposal for five-day mail delivery currently sits in political limbo. Last year, the USPS cut $6 billion in expenses.
But the prevailing problem remains: “The problem grows out of a three-year-old law that added more than $5 billion to our annual costs for prefunding retiree health benefits,” Potter said last fall, referring to Postal Reform legislation enacted in 2006.
Last year, President Obama signed stop-gap legislation that changed the Postal Service’s 2009 Retiree Health Benefit Trust Fund pre-funding payment from $5.4 billion to $1.4 billion. “While this is a welcome move that enabled us to meet all our obligations in 2009,” Potter said at the time, “there is more work to be done to secure our future.”
Apparently, change is coming to the USPS. Whether that will begin to positively affect its financial situation remains to be seen.
February 24th, 2010 at 4:59 am
It seems that the overpayment of $75 billion in levied retirement costs would show the USPS would be technically in the black were it credited to each year that the government overcharged the USPS. I have seen no PLAN to give this money back to the USPS so that it can again pre-pay the health care costs of retirees 10 years in the future as it was required to do in 2006, plus finance its day to day operations.
February 24th, 2010 at 7:21 am
Reduce the number of managers! There are way too many of them. Most of these managers never even touch the mail. It makes you wonder what they are doing all day! 5 day delivery is NOT the answer!
February 24th, 2010 at 12:23 pm
The entire problem rests with the Postal Governors who determine pricing. Let us match, or even lower, the prices for packages that come from ONE company. UPS does this and they have long since taken ALL the package deliveries from individual companies. E-commerce = package delivery from individual companies. Lets compete more effectively there!
February 24th, 2010 at 8:14 pm
First off, they need to look at how much managers are being paid. Most 60K or more. It’s public knowledge. visit http://php.app.com/usps/search.php . One manager in Texas is making close to $100K , another who’s in safety working Mon-Fri 8-5 68K . This is just a few I know off hand. However, they lay blame on us for taking all the money , when we’re the one’s getting the mail out & delivered.People want things yesterday. We need to be the one who’s most conveniant to use. The stamps by mail. I’ve had multiple customers put orders in & get them weeks later if at all. I love my job, I do all I can to serve & help my customers. We’ve got to get more customer ,conveniance, and business focused. Here’s another problem, clerks throwing parcels. Doesn’t matter if it says fragile , pics or what.. Right in the buggy. No care of these items intrusted to us. Now, WHY? WHY? would someone want to ship through us w/ this happening? I’ve had multiple business say that we lose or damage items when I’ve ordered items wanting it shipped through us. Potter’s right , we HAVE to change or we won’t have a job.
February 25th, 2010 at 11:18 am
Again the Postal leadership has their head in the sand. Less than 20% of all postal employees are under the Civil Service Plan. All have three years or less to the 30 years needed for retirement. The Postal Service needs to make a offer and get these employees, the highest paid, to retire on the early out program. This would save the Postal Service Millions of dollars a year in money they are now putting in those empolyees retirement funds. While also saving in lowering hourly wages to the then senior employees that would be left . The Postal Service has made early out offers that would financially punish these employees for the rest of their lives. If they want to go to 5 day delivery, cutting millions more in cost, they must be get most of the Civil Service Employees to retire early.
February 26th, 2010 at 11:28 am
the USPS is NOT getting rid of their managers and they ARE going to 5 days… they have every intention of doing it ASAP…. all the unions need to understand that their employer simply CANNOT AFFORD ALL OF US ANYMORE!…. they are losing BILLIONS every year…. and I for one hope they go to 5 days AND offer the CSRS a serious early out…. we are losing our subs anyway because regulars are having to work more days because of volume losses… it’s not pretty, but we need to face it head on or we are all going to be on that sinking ship
April 25th, 2010 at 9:04 am
A. Postal service have way too many supervisors.
B. Postal service must go to ELECTRIC truck with front wheel drive so carriers
can do their routes in 8 hour’s or less in the winter. That will save money.
C. The present route adjustment system is broken , it doesn’t work. It favors
deadbeats that don’t want to work.
The present route adjustment system only work if carriers are honest with their
office and street time and that is about 3 % of the carriers per-office that are
really honest with their office and street time.
The honest and hard working carriers are the only ones getting route additions-
The dishonest deadbeats get little to no route additions not fair the 3% who
are honest and hardworking.
D. During nagotiation the postal service must have the right to fire carriers that are not doing their jobs.
Again the present way of adjusting routes must go, every carrier should do equal work for equal pay.
Jose from Libertyville Illinois post office with 32 years of service and 3 years in the Marines. Waiting for an early out with incentives to retired. Can’t wait to get out of Dodge and go fishing.
April 29th, 2010 at 9:49 am
The USPS outperforms FEDEX and UPS in nearly every category when it comes to Expedited Mail and Packaging. There is absolutely nothing wrong with going to 5 day mail service, from my perspective Tuesday thru Saturday would work just fine. We need to provide the USPS the flexibility to get the job done from a value/cost based model. We cannot keep things the same just because that’s the way it’s always been. I have worked with the USPS across the country and found their dedication and performance is consistently outstanding. Let’s getting moving forward as we need to evolve and adjust our business models accordingly.