Wednesday, January 28, 2009
Mail Delivery - Cut Back To 5 Day Delivery?
Massive deficits could force the post office to cut out one day of mail delivery per week, the postmaster general told Congress on Wednesday.
Postmaster General John E. Potter asked lawmakers to lift the requirement that the agency deliver mail six days a week.
Faced with dwindling mail volume and rising costs, the post office was $2.8 billion in the red last year and, “if current trends continue, we could experience a net loss of $6 billion or more this fiscal year,” Potter said in testimony for a Senate Homeland Security and Governmental Affairs subcommittee.
Total mail volume was 202 billion items last year, more than 9 billion less than the year before, the largest single volume drop in history. And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.
“It is possible that the cost of six-day delivery may simply prove to be unaffordable,” Potter said. “I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week.”
If the change is made, that doesn’t necessarily mean an end to Saturday mail delivery. Previous studies have looked at the possibility of skipping some other day, such as Tuesday.
“The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge,” Potter said.
That doesn’t mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.
If it did become necessary to go to five-day delivery, Potter said, “we would do this by suspending delivery on the lightest volume days.”
The Postal Service raised the issue of cutting back on days of service last fall in a study it issued. At that time the agency said the six-day rule should be eliminated, giving the post office, “the flexibility to meet future needs for delivery frequency.
A study done by George Mason University last year for the independent Postal Regulatory Commission estimated that going from six-day to five-day delivery would save the post office more than $1.9 billion annually, while a Postal Service study estimated the saving at $3.5 billion.
The next postal rate increase is scheduled for May, with the amount to be announced next month. Under current rules that would be limited to the amount of the increase in last year’s consumer price index, 3.8 percent. That would round to a 2-cent increase in the current 42-cent first class rate.
The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.