Will A 5-Day Delivery Schedule Save The U.S. Postal Service?
According to the U.S. Postal Service, they will lose $23 billion a year for the next ten years if something doesn’t happen right away.
Since its inception 235 years ago, the USPS has not only delivered the mail, but profits as well. Not so much anymore; in 2008 the USPS agency began to lose money for the first time in their history.
By the end of this fiscal year, the U.S. Postal Service will have lost an additional $7 billion, and will owe the U.S. Government $13.8 billion. By the year 2020, the USPS will have lost an astonishing 238 billion dollars.
But the Postal Service has a plan to save itself – a plan that cost them $5 billion to develop.
The plan, believe it or not, is to simply stop delivering mail on Saturdays.
The U.S. Postal Service says that by delivering mail only five days a week, they will save an estimated $3.5 billion a year. The Postal Regulatory Commission however thinks the savings will be more like $1.9 billion. But either way, the money saved isn’t nearly the amount the agency is projected to lose.
The PRC will likely take six to nine months to crunch the numbers. If it approves the plan, the issue goes to Congress, which has been circling the growing fiscal crisis of the post office for nine years now, ever since the Government Accountability Office placed it on a “high-risk list.” For the last several years, Postmaster General John Potter, who makes $845,000 a year and has struggled to bring the agency into the 21st century in his nine years on the job, has asked Congress for a number of fiscal fixes. In 2003, Congress reduced the Postal Service’s pension costs by about $9 billion. In 2006, it relieved the agency of $27 billion in pension obligations to employees with military service. And last year, Congress cut the agency’s annual retiree health benefits by $4 billion. With each fix came a promise of “fiscal solvency” from Potter, so to say that Congress is losing patience with the Postal Service is an understatement. Even if the House and Senate do pass the plan to cut Saturday delivery, it’ll be a miracle if that happens before the plan is set to go into effect in 2011. In the meantime, the Postal Service will just keep losing money and probably raising postage rates, which it has done eight times since 1999.
Full Article Lost in the Mail By Matthew Philips, Newsweek
So what do you think? Will a 5-day delivery schedule save the day?
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April 1st, 2010 at 1:35 PM
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April 14th, 2010 at 11:56 AM
The real solution to the fiscal problem cannot be found by distancing itself from its customer base via service cutbacks. They need to cut back on employees – but only the “right” employees.
By going to a 5-day delivery scenario, USPS is setting itself up for a round of layoffs. But, layoffs must take place in juniority order – eg., the newest/cheapest employees would go first. Both the PRC chair and the GAO agree that the PROPER approach should be to give realistic retirement incentives to the oldest employees who get higher salaries and benefits.
Then, once the “right” employees are out the door, they merely have to restructure their delivery routes so that fewer people are needed to deliver the mail.
Consider this. There are currently 535,000 postal workers – and already, half of them are eligible for retirement right now. And most of them are probably eager to retire. They just need the right incentive to make them go.