While “neither snow, rain, heat or gloom of night” may keep postal workers from doing their job, another issue might have more of an impact on the future of the U.S. Post Service – finances.

 


While “neither snow, rain, heat or gloom of night” may keep postal workers from doing their job, another issue might have more of an impact on the future of the U.S. Post Service – finances.

Over the past decade, the U.S. Postal Service has been experiencing a significant decline in its income, and it has reported without some kind of operational change being implemented soon, it could be facing bankruptcy. The postal service currently has a $9 billion budget deficit.

The U.S. Postal Service, a constitutionally mandated government entity, is an agency of the federal government, but unlike most of those government departments it exists without the assistance of tax dollars – relying on the funding it receives as an operation to survive.

That funding is not keeping up, and according to recently reported information for the second quarter, January-March 2012, the postal service reported a loss of $3.2 billion. That, according to the U.S. Postal Service, compares to a $2.2 billion loss during the same quarter in 2011.

A variety of reasons have been offered as to why the post office has been experiencing this decline. Technology, especially as it relates to the Internet, has lessened the volume of use at the postal service, reports the U.S. Postal Service. In fact, the annual report of the postmaster general shows the high point of service took place in 2001 when more than 103 billion pieces of first-class mail were delivered. Since that year, the number has steadily decline, so that in 2011 73 billion pieces of first-class mail were delivered.

In its “Vision 2013, a five-year plan presented in 2008 by the U.S. Postal Service recognized this decline and provided some possible solutions that could help address what has been described as a looming financial crisis. Among those suggestions are a reduction in service throughchange from six to five day delivery. The postal service also suggested the closing of 3,756 post offices. Both would result in a reduction of the work force helping to save hundreds of millions of dollars.

Obviously, closing post offices has not been a popular proposal among members of the communities where the closures would take place, nor is it among members of Congress.

In a March 27, 2012 letter to House and Senate leadership, several members of Congress raised several questions about the potential closures, and among those signing the letter was Seventh District Congressman Collin Peterson.

“We recognize the need for the USPS to restructure its business model, but believe that we must not be rushed into false choices which could accelerate the decline of the postal service, with negative impacts for both our constituents and the trillion dollar private sector mailing industry which depends on the postal service,” states the letter.

The letter states closing post offices under the postal service proposal “would save less than one percent of the postal service’s annual operating budget, and would not have a significant impact in closing the postal service’s approximately $9 billion budget deficit.”

“We understand the devastating impact that a post office closure can have on a small community,”?said Peterson in a subsequent statement. “It doesn’t make a lot of sense to shut down rural post offices without first considering a new business model that incorporates many other reforms.”

That new model has been proposed, and rather than moving forward with more post office closures, the new idea would be to keep those offices open with reduced hours.

According to Peter Nowacki, a spokesperson for the U.S. Postal Service and who represents midwest states including Minnesota, the proposal is a response to the reality of mail volume falling by up to 25 percent in recent years and stamp volume falling by half over the past decade.

Nowacki said the plan is to cut service hours in those offices where traffic has diminished.

Those hours could be cut from the current eight hour day to anything from six to four and even two hours per day based on traffic. A total of 17,000 offices were reviewed, and the number of postal offices proposed for reduced hours is approximately 13,000 across the nation.

Nowacki said he has been to a number of community meetings over the years, and he knows people care about their post offices. He also said while the idea to reduce hours was officially proposed by postal service leadership, the idea of cutting back hours rather than closing offices has been suggested over the years at a number of community meetings where closings have taken place.
Prior to any official decision to cut hours, Nowacki said letters would be sent out to residents who are served by that respective office and a community meeting would be held. Those meetings are not scheduled to begin until later this year - likely sometime in September. Nowacki said this is a long process, adding the goal is to have the new model in place by 2014.

“This is not all going ot happen in a matter of months,”?he said. “It is going to be a two-year process.”

Those postmasters who would have hours cut would have the roles they serve in downgraded, and according ot Nowacki, the postal service is also going to be offering early retirement incentives to many of its current postmasters.

Although there are going to be significant changes in the offices, Nowacki said he did not anticipate any major changes or delays in delivery.

Others are not so sure, including the National Newspaper Association, which has raised concerns about the proposed postal reforms.

“What’s needed is a clear-eyed vision and a full understanding of the needs of all who the postal service serves,” wrote Reede Anfinson, current National Newspaper Association president and publisher of the Swift County Monitor News in Benson.

Before any plan goes into effect, several layers of review must take place, including a study by the postal regulatory commission.
Although the future of the postal service in the United States remains uncertain, those in leadership within the agency ant at the Congressional level have the confidence with the right model the postal service can remain a viable option into the future.

“Our financial problems should not be seen as an indictment of the value of mail,”?said Patrick R. Donahoe, U.S. postmaster general and USPS?CEO in a May 4, 2012 statement made during a meeting of the board of governors. “The postal service continues to endure the negative effects of electronic diversion, combined with a weak economy and a restrictive business model…I’m convinced that legislation that enables the postal service to get back on a profitable path will start the process of rebuilding confidence in the mail and of greater investment in the mail.”