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Thursday, February 7, 2013 - Page updated at 08:30 p.m.
USPS to cut regular mail service to 5 days a week
By Michael A. Memoli
Tribune Washington Bureau
WASHINGTON — The U.S. Postal Service announced plans to end Saturday mail delivery starting in August while maintaining six-day delivery of packages, a move that could set off a battle with Congress.
Post officials said the action was critical to keeping the agency solvent. It would be the biggest change in mail delivery since the post office ended twice-daily service in the 1950s.
Although the Postal Service no longer receives taxpayer money, it remains subject to oversight by Congress, which, since 1983, repeatedly has passed measures requiring six-day delivery. Postmaster General Patrick Donahoe’s announcement appeared to be an effort to force action in Congress after comprehensive postal-reform legislation stalled last year.
As email has reduced the need for standard mail delivery, and businesses have shifted to online bill delivery and e-payment systems, postal officials say they have been left with more workers and post offices than the volume of mail can support.
“Our financial condition is urgent,” Donahoe said at a news conference, adding that ending letter deliveries on Saturdays would save $2 billion. “We need to operate with greater flexibility, so we can adapt quickly to the changing marketplace.”
Americans “value the mail they receive, (but) they like to pay their bills online,” Donahoe said.
Reducing Saturday delivery is in line with mail services in several other industrialized countries like Australia, Canada and Sweden, which deliver five days a week.
Package delivery was not curbed — a reflection of the continued growth of e-commerce has increased the agency’s shipping business, up 14 percent since 2010. That makes Saturday package delivery a potential moneymaker.
The postal service needs to find $20 billion in cost reductions and revenue increases to continue to operate, Donahoe said. Already, it has cut its workforce — one of the largest in the country — by 193,000 through attrition. It also has reduced costs by $15 billion by consolidating mail-processing facilities, eliminating some 21,000 delivery routes and reducing hours at 9,000 postal facilities across the country.
“Even with these significant cost reductions, we still have a large budget gap to fill,” Donahoe said.
But post-office officials say the cuts, rate increases and staff reductions are not enough to make up for the two reasons it is losing money.
One is a requirement that it pay nearly $5.5 billion a year for health benefits to future retirees, a mandate imposed on no other government agency. Second, since 2007, first-class mail volume has declined by 37 percent as use of email and online payment services has soared.
In April, the Senate passed a bill that provided early-retirement incentives to about 100,000 postal workers, or 18 percent of its employees, and allowed the Postal Service to recoup more than $11 billion it overpaid into an employee-pension fund. The Senate bill did not stop Saturday deliveries immediately, but it would have allowed the agency to consider the issue in two years.
The Senate bill went nowhere after the House took no action. As drafted, the House bill would have allowed the post office to end Saturday delivery.
The new Congress is set to begin work on a postal bill, but it is unclear when the legislation would be taken up as lawmakers work to avert a series of across-the-board spending cuts scheduled to take place in March.
The agency said eliminating Saturday mail service represented a substantial cost savings because of the reduction in staff hours and equipment needed to maintain the deliveries.
The proposal announced Wednesday, which would take effect Aug. 5, aims to reduce the postal workforce by at least another 20,000 employees through reassignment and attrition. It also would significantly reduce overtime payments.
The announcement came with little advance notice to lawmakers, who were preparing to renew an effort to pass postal legislation this year.
Donahoe said the agency believes it can move forward unilaterally. The current mandate for six-day delivery is part of a government funding measure that expires in late March.
Between now and then, “There’s plenty of time in there so if there is some disagreement” with lawmakers, “we can get that resolved,” he said.
The divide among lawmakers on the issue does not break cleanly along partisan lines. Lawmakers who represent rural areas, who tend to be Republicans, generally have opposed service cutbacks. So have those with strong backing from postal labor unions, mostly Democrats.
Last year, the Senate approved a bill that would have allowed the postal service to end Saturday delivery after a two-year period to evaluate the potential impact. Similar legislation in the House never came up for a vote.
The Obama administration had included a proposal for five-day mail delivery in its 2013 budget plan. White House officials, however, had said they supported that change only in concert with other reforms. White House spokesman Jay Carney said Wednesday that officials hadn’t yet studied the latest plan.
Includes material from The New York Times
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