The End of Mail?
As a result of the economic recession, the Postal Service has predicted that mail volume will likely plunge to 180 billion pieces by the end of fiscal year 2009, from 212 billion pieces as recently as 2007. At the hearing, Potter described Postal Service actions to sustain long-term economic viability, including reductions in fixed, variable and non-personnel costs over the next three years.
Specifically, Potter outlined ongoing elements of the Postal Service’s strategy to help close the budget gap – a “chasm, widening each day,” he said – created by the agency’s revenue shortfall. These include:
- A new process for evaluating and adjusting city delivery routes
- Reduction of employee work hours and overtime by pursuing even greater efficiencies throughout the organization
- Halting construction of new postal facilities and directing funds to the sites with the most critical needs (i.e., buildings badly damaged or destroyed by natural disasters)
- Improved fleet management and delivery routing to reduce fuel usage
- Expanded energy efficiency to reduce energy use throughout Postal Service facilities
- Reductions in employee travel budgets through the use of web and video technology to conduct meetings and conferences
- Renegotiations of supplier contracts to reflect reduced needs
To strengthen the Postal Service’s efforts, Potter asked Congress to pass H.R. 22 and modify the method by which it is required to fund retirement health care benefits. This legislative change would reverse a policy that was instituted when the Postal Service experienced large surpluses – and result in at least $2 billion in annual savings over an eight year period. There would be no costs to the taxpayer were H.R. 22 to be enacted.
“Even with our aggressive cost-cutting measures, our situation is critical,” Potter said. “We cannot overcome the economic forces without help from Congress.”
Potter also said the Postal Service would initiate a public policy discussion with Congress, regulators, major customers, the business community and the American people regarding adjusting its delivery
schedule from six to five days. The removal of a legal requirement regarding days of delivery could result in annual savings of $3.5 billion, according to the Postal Service. The requirement for six-day delivery service was mandated by Congress in 1983 when technology and consumer access were much different than they are today.