US Postal Service chiefs have stepped up their criticism of the postal reform bill passed by the USSenate as insufficient to solve the struggling agency’s problems and are calling for the freedom to
cut back more of the operational network and service range faster.In late April, the Senate approved the Postal Reform Bill, which provides a short-termfinancial relief for USPS by requiring a return of $11 billion in overpayments to federal pensionfunds back to the US postal operator. But USPS would face a two-year delay in switching fromsix-day to five-day delivery and a one-year delay to the closure of rural post offices.
The House of Representatives is already considering a rival bill proposed by Republicans thatwould enable the postal operator to reduce costs more quickly but this legislation is opposed byDemocrats.
Speaking at Friday’s Board of Governors meeting, chairman Thurgood Marshall, Jr. said: “Thebottom line is that the Senate bill does not provide the Postal Service with the flexibility andspeed that it needs to have a sustainable business model. Our financial condition has beendeteriorating for several years, and we have been operating with a very low cash balance. Every daythe Postal Service posts a loss of $25 million dollars. We therefore strongly encourage theenactment of legislation that enables the Postal Service to avoid a default and return to long-termprofitability. The Senate bill includes many hard-fought improvements but it does not enable all ofthe cost reductions that are necessary to return to profitability.”
The five-year restructuring plan presented by USPS in February “is a fair and reasonableapproach for our customers, our employees and the communities that we serve” and would return theorganisation to sustained profitability, he stressed. USPS would be able to save $22.5 billion bythe year 2016 and thus keep costs below expected revenues for the rest of the decade.
Under the five-year plan, USPS would close up to 252 mail-processing centres of the 461total, cutting some 35,000 jobs, along with some 3,700 local post offices. These two measurescombined would eliminate more than 100,000 jobs and save about $6.5 billion a year.
Pat Donahoe, Postmaster General & CEO, told the board: “The Postal Service continues toendure the negative effects of electronic diversion, combined with a weak economy, and arestrictive business model. If we had the flexibility to adapt to shifting demand, we couldbe profitable today.
“We are very confident about our comprehensive plan. It calls for making some toughdecisions, but they are the right decisions. We need to eliminate excess mail processingcapacity. We need to rethink how we manage our retail footprint. We need to manage our healthcarecosts better. If we can gain the flexibility to move quickly in these areas, we can return toprofitability. If we are unable to do these and other things, we risk becoming a permanent burdento the American taxpayer. Such an outcome is entirely avoidable with the right legislation.”
