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."