If the U.S. Postal Service has its way, there will soon be the end of an era. Saturday delivery of mail began in 1863, but current financial woes and ever-dropping revenues may do what the weather has seldom done in over a century.
After growing weary of waiting for Congressional assistance, the U.S.P.S unveiled its plan this week in an effort to save nearly $2 billion a year. Compared to the $16 billion loss of revenue the agency reported for this past year, the $2 billion is pocket change.
First class mail has seen a severe decline since 2001when electronic mail and banking reached an all-time peak. While a failing economy and increase in non-traditional communication methods such as email and faxing have contributed to the decline in demand for traditional mail services, the key factor can really be related back to a 2006 Congressional mandate that required the service to pre-fund retirement healthcare benefits. This in turn led to the USPS having to borrow billions in taxpayer funds to make up the shortfalls. The agency landed in particularly dire straits last year when they twice defaulted on payments that totaled over $10 billion and exhausted their $15 billion U.S. Treasury line of credit.
Although the CEO and postmaster general of the service says it is a responsible decision that shows common sense on the postal service’s part, the postal carriers’ union has vowed to fight the plan. The National Association of Letter Carriers argues that the service doesn’t have the authority to eliminate any days of service without approval from Congress. The service’s executives disagree and so far Congress is remaining quiet on the matter.
The change would impact over 22,000 jobs and has quite a large number of carriers concerned. Many instead are asking why the service instead doesn’t offer early-retirement buy-outs for full time employees and rely more on their part-time workforce?
In the past year there have been cuts in hours and services at hundreds of post offices, mail processing plant mergers along with early retirements and departures by employees who were not able to relocate that led to a drop in over 25,000 from its workforce. The service expects an 80% savings just by eliminating overtime for employees. The balance of savings the service hopes to see will come from early retirements and cutting part-time employee hours. CEO and Postmaster General Patrick Donahoe has stated he will not lay off any workers if at all possible.