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Saturday U.S. mail delivery a victim of the Digital Age

Fri, Feb 22nd, 2013
Posted in All Features

Postmaster general Patrick Donahoe announced on February 6 a new policy to save money which would eliminate Saturday delivery of mail beginning in early August 2013. However, Saturday delivery of packages, mail order medicines, Priority Mail, Express Mail, and mail to post office boxes where a Post Office is currently open on Saturday will continue.

All mail will be delivered Monday through Friday. The change in policy is estimated to save the cash strapped federal agency about $2 billion per year.

The intention is to again make the United States Postal Service (USPS) financially stable and to keep U.S. Mail affordable. This could be just another step to be taken to make the USPS more efficient. Other steps already taken over the last seven years have forced a substantial reduction (28 percent) in its workforce. More than 200 mail processing locations have been consolidated. Still, the USPS is one of the largest civilian employers in the United States behind Walmart and federal employees.

Donahoe in his remarks encouraged Congress to pass postal reform legislation. The USPS is a unique federal agency. It is an independent agency of the United States which is specifically authorized by the Constitution. Congress oversees the USPS. However, the agency receives NO tax dollars, but remains under the thumb of Congress. Revenue for operating expenses comes from the sale of postage, products, and services.

Congress can further frustrate the ability of the USPS to become financially stable by not allowing it to raise stamp prices more than the Consumer Price Index (CPI). Competing private corporations can raise their rates as they see fit.

Benjamin Franklin was the first postmaster general in 1775 during the Second Continental Congress. The USPS is now a quasi government agency which enjoys an exclusive legal right to deliver first class and third class mail. The value of the handling of first class mail peaked over a decade ago.

The USPS competes with private industry like the United Postal Service and FedEx.

There is some question whether the announced policy change is legal without Congressional approval. Since 1981, there has been a provision requiring Saturday delivery. Many other countries have a five day mail delivery system.

USPS Finances in the Red

Donahoe noted a loss of $15.9 billion in fiscal year 2012 which was three times the loss in 2011. The number one cost to run the USPS is employee related, as it is for most businesses. The USPS employs about one million full time people.

In 2006 Congress passed the Postal Accountability and Enhancement Act which mandated the funding of the current value of future health care payments to retirees (75 years into the future) within a ten year time period. This mandate contributed to about 70 percent of the 2012 loss or about $11 billion.

Also contributing to financial losses is the plummeting demand for mail service due to digital communications and on line banking and bill payments. USPS handled about 160 billion pieces of mail in 2012 down from 202 billion in 2003. But, due to e-commerce the volume of package delivery has increased about 14 percent since 2010.

Opposition and Support

Fredric Rolando, National Association of Letter Carriers, insisted, “Postmaster general Patrick Donahoe’s plan to end Saturday delivery is a disastrous idea that would have a profoundly negative effect on the Postal Service and on millions of customers.” He went on to suggest that those most affected would be small businesses, rural residents and/or elderly and disabled customers. Three unions for postal service workers generally expressed their disapproval of the policy change to limit Saturday deliveries.

U.S. Representatives Darrell Issa, (R-California) and Tom Coburn, (R-Oklahoma) called the plan “common sense reform.”

It is likely delivery could be slowed for some small businesses, which may induce them to look at private delivery services. Some customers may have to wait to get badly needed checks until Monday. More jobs will likely be eliminated. Delivery of publications and advertisements could be less timely.

Polls taken after Donahoe’s announcement generally had the support of 70 percent or more of the public.

An IPSOS poll taken on February 11 found that only about 8 percent of those polled felt the five day per week delivery schedule would have a negative impact on them. Another 24 percent felt it would have somewhat of an impact on them.

IPSOS found very little difference among respondents residing in rural and urban areas, among different age or racial groups. About 80 percent supported the decision to go to five day delivery. Sixty-eight percent felt the policy change would have little or no impact on them. Support increased when respondents were informed that the policy change would make the postal service more financially stable.

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