Challenging Times for USPS – National Consumers League

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By Sally Greenberg, NCL Executive Director

Last week I had the opportunity to hear the Postmaster General speak at the National Press Club here in Washington, DC. John Potter took the time at the luncheon address to lay out the challenges facing the United States Postal Service (USPS) and offer possible solutions. NCL has a long history of working with USPS to disseminate information to consumers about changes in postal service and or new services being offered. Postal service remains very important to consumers today, despite the alternative ways of communicating.

I learned a lot of new information about USPS a few weeks back when I met at their L’Enfant Plaza headquarters:

  • For one, they don’t receive taxpayer subsidies. The Postal Service is a self-funded government entity and gets no financial assistance from Congress. I had thought USPS was supported in part by our taxes. It is not, but it also under Congressional mandate to provide a lot of specific services. So it suffers from a kind of Catch-22 – it gets no financial support from Congress but has to do what Congress mandates.
  • I also learned that with 650,000 workers, the Postal Service is America’s third-largest employer, after Wal-Mart and the Defense Department. It has the nation’s biggest vehicle fleet — and high gas prices cost it $500 million last year.
  • I didn’t know you could get your passport renewed through the Post Office.
  • I learned that USPS has a recycling program, providing bags that seal up and can be mailed, allowing consumers to send – free of charge – small electronics to a site that will dispose of any harmful chemicals and recycle the parts. USPS is a leader in green technology and sustainability. Earlier this month, USPS won the first Environmental Achievement of the Year award presented by Postal Technology International magazine, thanks to several sustainable initiatives including a recycling program, green facilities, and a fuel-efficient vehicle program. The Postal Service’s mail recycling program is currently in 16,000 Post Offices and has diverted an estimated 24,000 tons of recyclable paper from landfills. The Postal Service is also transitioning to fuel-efficient vehicles, with a goal to reduce its petroleum use by 20 percent by 2015.

But USPS is also facing steep reductions in the number of pieces of mail it handles because of email, fax, and other technologies. The Postal Service predicts that mail volume will plunge to 180 billion pieces by the end of fiscal year 2009, from 212 billion pieces as recently as 2007. That means reduced revenue.

On the table for reducing the deficits USPS faces is ending Saturday delivery and closing a number of the smaller post offices. USPS estimates that ending Saturday deliveries could result in annual savings of $3.5 billion. The requirement for six-day delivery service was mandated by Congress in 1983 when technology and consumer access were much different than they are today. Among the other strategies for reducing USPS’ deficit are these:

  • New processes for evaluating and adjusting city delivery routes
  • Reduction of employee work hours and overtime by pursuing even greater efficiencies throughout the organization
  • Halting construction of new postal facilities and directing funds to the sites with the most critical needs (i.e., buildings badly damaged or destroyed by natural disasters)
  • Improved fleet management and delivery routing to reduce fuel usage
  • Expanded energy efficiency to reduce energy use throughout Postal Service facilities
  • Reductions in employee travel budgets through the use of Web and video technology to conduct meetings and conferences
  • Renegotiations of supplier contracts to reflect reduced needs

A February 2009 USA TODAY/Gallup Poll indicated that most consumers support cutting back mail services — closing post offices, trimming deliveries from six days a week to five — rather than raising stamp prices or using taxpayers’ money for a bailout.

I appreciated the Postmaster General’s remarks, which were upbeat and positive but grounded in the real financial challenges USPS faces. He also spoke highly of the postal workers and the positive relationships the Post Office maintains with the unions. The Postal Service is very important to American consumers. NCL looks forward to working with USPS as it confronts some very difficult challenges that lie ahead.