Cutting out Saturday mail delivery might help, but saving the U.S. Postal Service (USPS) from extinction is going to take even more drastic action by Congress, including the systematic closure of major postal facilities similar to the BRAC forced military base closures, according to a new report from the Government Accountability Office (GAO).
"USPS's business model is not viable due to USPS's inability to reduce costs sufficiently in response to continuing mail volume and revenue declines," reported the GAO, citing a 17-percent reduction in mail volume over the last three fiscal years.
Despite saving billions by cutting over 84,000 employees, reducing capital investments, and raising postage rates, USPS still lost nearly $12 billion from 2007 to 2009, found the GAO. "USPS also is nearing its $15 billion borrowing limit with the U.S. Treasury and has unfunded pension and retiree health obligations and other liabilities of about $90 billion."
And Now, the Bad News: Without "major changes," GAO estimates that the USPS's cumulative losses could exceed $238 billion over the next decade. "If no action is taken," warns the GAO, "risks of larger USPS losses, rate increases, and taxpayer subsidies will increase."
Along with ending Saturday mail delivery, some other major last-ditch "actions" recommended by the GAO will require the approval of Congress:
- Besides closing small, underutilized local post offices, several major mail processing facilities will need be closed, says the GAO. Congress will have to approve these closures. GAO suggests Congress create an independent group similar to the military Base Realignment and Closure Commission to choose these facilities and oversee their closure.
- Employee benefits account for over 23-percent of USPS's annual cost of operation. Primarily, USPS is required to make annual multibillion dollar retiree health benefit payments. GAO recommends that Congress allow USPS to defer some of those costs by revising funding requirements for retiree health benefits and revise workers' compensation laws for USPS employees eligible for retirement.
- Congress should allow the USPS to expand its offering of non-postal products and services.
Since 1989, the Base Realignment and Closure Commission (BRAC) has selected and overseen the closure of more than 350 military installations nationwide. Congress established the BRAC as a means of avoiding the political challenges often involved with the closure of a military base due to the loss of jobs and impact on local economies. The closure of a major postal-processing plant could have similar local impacts.
Also See:
Saturday Mail: The Email Irony
Will Congress Save Saturday Mail Again?
End of Saturday Mail Looms
Comments
There is a quick and easy fix to saving USPS….
Require ALL Federal agencies to utilize their services. I’ve worked for three Federal agencies, and all three used FED EX exclusivly until they entered into a contract with UPS….Why are we not supporting the Postal Service? It is insane…..
I run a warehouse for Unicor, Federal Prison Industries. We ship 100 -200 packages daily. All our small carrier shipments are with UPS, with the only exception being Military mail. We use USPS for these shipments.
UPS supplies us with two World Ship Computers, printers, labels, boxes, and envelopes to organize and complete all our shipping needs. They pick up at the warehouse door daily. It is a convenience thing, and their prices are lower. I would love to use the United States Postal Service exclusively, but they have not evolved enough to compete with UPS on customer service. UNICOR, Federal Prison Industries is a
Self-sustaining, self-funded corporation established in 1934 by executive order to create a voluntary real-world work program to train federal inmates. If we don’t show profit, we shut our doors. And many factories have closed in the last 2 years. If only the USPS worked under the same scrutiny, they might not be in the situation they are now. I would like to see them close their doors on Saturdays, and transform into a company more like UPS, and FedEx. I just don’t see it happening. I think the end is near for the USPS. And it is sad to say that.
If the Postal Service’s only hope is Congress, we’re doomed! Congress is responsible for USPS’ current predicament, with it’s economically back-breaking requirement — in the 2006 law — that the Postal Service prefund 40 years worth of future retiree health benefits within a 10 year period, instead of practicing pay-as-you-go, like everyone else. This one requirement financially crippled USPS. Before then, the Postal Service was profitable.
One of the eighteen reasons for the Federal Government is to establish Post Offices and post roads-see Article 1 section 8 of the U.S. Constitution. The people we elected need to remember the reason they are representing us and forget trying to run healthcare,the auto industry,the lending system etc ad nauseum. The people of the United States deserve the safe secure delivery of their mail by the Postal Service without regard to their location or social class. If the Postal Service really wanted to save money and lots of it they would ask for ideas from the employees who carry the mail. We have pleanty and the success or failure of the USPS matters to us.
It cost the post office $5 to process 1,000 pieces of mail.All mail is paid for in advance.102 machines were put into service in 2007.Each machine processes 16,000 pieces of mail per hour.Standard mail such as mail from governmen,education,social and civic organizations is a constant.This mail volume increases by 1.5 million each year.The machines are aqured on a tax free lease.The machines are provided to independent mail processors on a tax free lease.The mail that is processed is a tax write off.The independent mail processors are considered by the post office to be primary customers.All transactions between the manufacturer, the post office and the independent mail processors are tax free transactions.In adition the mailers are given discounts.The American public is being told a lie!Stop helping to spread it.The post office is a criminal enterprise.What I have discribed to you constitutes racketeering.Gangsters don’t lose money!
I agree with one of the first comment here, Make all Govt office to use USPS. Why are we using FedEx or UPS when we have gov drived mail system which we should support rather than giving fedral money to someone else. Its a no brainer put govt money in govt operated business. Also, close down low income USPS and allow subcontracted USPS. By having subcontracted station you save money on employees, cost of running post office, employees benefit, retirement and you promote more small business. I am sure we can take many small steps to get big gain.