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Postmaster General to Congress: USPS 'Experiencing Very Serious Financial Crisis'

Potter asks Congress to allow five-day delivery schedule.


By Dylan Stableford
03/25/2009

John Potter, the head of the U.S. Postal Service, went before Congress today to deliver a 6,577-word statement on the state of the USPS, and, of course, to ask for help.

“The Postal Service, which has served America for 234 years, is experiencing a very serious financial crisis because of the downturn in the economy,” Potter told a Congressional subcommittee on Capitol Hill. “We are facing losses of historic proportions 
 Our situation is critical.”

Mail volume in 2009, he said, is down 12 percent, and the gap between revenue and costs “has become a chasm, widening each day.”

Potter also asked Congress to change the law to allow the USPS to change its delivery schedule to five days per week from its current six.

“Current law does not permit us to adapt our service offerings to a changing business environment,” he said.  The Postal Service, which does not receive taxpayer subsidies, “is required to operate like a business, but the law constrains us from taking the businesslike actions necessary to fully and properly align our institutional cost base with reduced and evolving customer demand. Having the flexibility to change delivery frequency will overcome one of our structural barriers.”

Assuming USPS achieves a planned $5.9 billion in savings, Potter said he still projects a loss of $6 billion in 2010.

This follows last year’s loss of $2.8 billion and a $5.1 billion loss in 2007, he said.

Potter warned Congress the USPS could run out of money by the end of the year.

"Without a change we will exhaust our cash resources."

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Post Comment / Discuss This Story - Info/Rules

Business
Submitted by Anonymous on Wed, 03/25/2009 - 13:28.

The USPS' service has gone down a fair amount in recent years. Although I know that prices have gone up, lack of service, the raising of prices to ridiculous amounts, and poor training of employees is also a factor. The entire system needs work. It is only a matter of time before they ask for bailout money, and I do not see why taxpayers need to bail out the USPS when there are dozens of more efficient methods of sending information. It's time to go completely digital. Countless trees would be saved, not to mention preventing further damage to the environment. Cutting down delivery days is a start as they have first suggested, but it is inevitable that the days of the USPS are numbered.
Postal Profitability
Submitted by Anonymous on Wed, 03/25/2009 - 13:37.

The post office does not charge enough for junk mail! The public use will diminish as better communications methods become mainstream. Also, it is a government edict that anyone of repute have a postal address for some reason. The USPS just needs to charge enough to make money. Seems simple enough for me. Maybe the junk mail barrons can keep it open if the government wants us to have it.
Pony Express time!!!
Submitted by Anonymous on Wed, 03/25/2009 - 17:33.

They are wanting to do LESS work?? They dont have to work holidays, sundays and any Govt holiday or Govt holiday Monday! They make damn good money and they still complain?? I have always said "what right do these people have to "GO POSTAL"???" Try working retail!! I just recently sent a package to my uncle in the upper peninsula on the 4th of March. On the 23rd i recieved a letter from a post office in minnesota. They had both address labels from my package. THEY WERE CUT-OFF!!!! letter said that the labels "FELL OFF SOMEHOW"!!!! My package is GONE!!! STOLEN!!!! They have no idea where my package is. but they say it has been lost! NOT stolen!!! These labels did NOT fall off!! they were CUT OFF!!! Some very expensive books and a few magazines and a DVD are now in some thiefs possession!!! RAISE RATES? LESS DELIVERY DAYS? STEALING PEOPLES STUFF??? ENOUGH IS ENOUGH!!! PONY EXPRESS TIME IS HERE AGAIN!!!
USPS Solution
Submitted by Mike Serino on Thu, 03/26/2009 - 11:29.

I suggested this solution about ten years ago and will again. The USPS delivers to approximately 300,000,000 addresses every day...for free. They charge for a Post Office Box. It should be the other way around. The 300,000,000 million delivery points should pay a nominal fee of $10.00 per year. Excluding "hard-ship" cases the USPS can generate BILLIONS of additional income. Mr. Potter, don't forget to pay me my commission.
More to the Story
Submitted by Anonymous on Thu, 03/26/2009 - 12:06.

I'd offer three commentss. First, the USPS is unionized with a workforce caught equally between management and unresponsive union leadership. The rank and file are cannon fodder in a war that's decades old. The USPS has the ugliest and least healthy organizational culture of any large organization in the country. That's why employees "go postal." It isn't a mystery that when one of them does, they aim for both management AND union leadership because they've been mistreated by both. Second, Congress is much more the culprit that they will every be willing to own. The USPS cannot buy automation equipment built anywhere but in the U.S. Congressional action prevents it. The problem is: none of that sort of equipment is commercially available from a U.S. manufacturer any longer. All of the gear used by major mailers and printers is built offshore. That has made their longterm effort to automate flats as well as letter mail a debacle. I believe Northrup Grumman is the contractor building their FSS systems. What sense does that make? That leaves them with the typical carrier spending almost as much time sorting mail as they are delivering mail. Third, labor is the USPS largest expense. And a five day delivery schedule makes a lot of sense. So what if mail doesn't get delivered on Saturday. That means a route only needs one carrier for the entire delivery week, without someone substituting (or claiming to) on that sixth day when the regular carrier isn't working. The USPS would then need backup carriers only for vacation and sick leave coverage, not for a sixth day each week for every route nationwide. Congress needs to give the USPS much more of a free hand to run the thing like a business. In that, Potter is correct. They should be able to source the best equipment worldwide, should be able to deliver during the business week, and should be able to negotiate work rules that don't chew up the rank and file employees continually. To make those things happen, Congress needs to cut the stupid red tape and let the USPS serve its marketplace.
To Mr. Potter: I'd pay that $10-per-yr SOLUTION
Submitted by VBmakin35KyearlyinCT on Thu, 03/26/2009 - 14:10.

I agree with Mike Serino on Thu, 03/26/2009 - 11:29.To reiterate: [he] suggested this solution about ten years ago and will again. The USPS delivers to approximately 300,000,000 addresses every day...for free. They charge for a Post Office Box. It should be the other way around. The 300,000,000 million delivery points should pay a nominal fee of $10.00 per year. Excluding "hard-ship" cases the USPS can generate BILLIONS of additional income. Mr. Potter, don't forget to pay me [Mr. Serino] my commission. +++and as for me, I'm magnanimous--I'd pay a $1 a month!-VB
Despite the increasingly
Submitted by Anonymous on Thu, 03/26/2009 - 14:38.

Despite the increasingly poor service and expensive rates from the USPS, I do support a 5-day work week providing it's fully thought out about impact. For example, there may be some people who are only able to get to a post office on Saturdays so it may be more efficient to pick a week day where there is less traffic or volume. Another example is that companies who do still offer payment options via USPS mail may need to revisit grace periods or 'pay upon receipt' expectation dates. Additionally, perhaps the USPS also needs to look at the traffic of USPS locations just like a retail location. Would it also help to change the staffing hours so that, during the week, on some days they're open more in the morning and other days they're open more toward the evening? Finally, it seems like the USPS could benefit from some third-party efficiency and reorganization consultations to improve their business. There's no reason it should be cheaper and more timely to send the same package via UPS or FedEx, where it is automatically insured to a certain level, takes less time and usually arrives in better condition. And, there's no reason it should be faster to conduct business through a UPS retail location than through the USPS locations given the same amount of people.
Mail Delivery
Submitted by Sherrill Maser on Mon, 03/30/2009 - 14:12.

With the financial concern of the Postal Service and the very evident decrease in mail, it seems wiser to divide households into three day deliveries, MWF for half, TThS for the other half and businesses could have their choice of MWF or every day for heavy deliveries. With internet banking and correspondence, even businesses are seeing a decrease in volume. This would greatly decrease the need for vehicles plus personnel. Surely this could offset the frequent increases in postage, one of the reasons people are not using the mail service. Times have changed in every aspect of life and mail is one of them. People send e-cards, even the card companies are suffering. Look at this idea seriously. It makes much more sense than the five day delivery week. There would probably be some temporary complaints but we'd all adjust just like we did when they changed to once a week garbage pickup. Today it's all about the money.



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