By Charles Miller
District Manager, U.S. Postal Service Lakeland District
“Neither snow, nor rain, nor heat, nor gloom of night … will stay us from the swift completion of our appointed rounds.”
For more than 235 years, the U.S. Postal Service has adhered to this unofficial creed. But now, the agency that is responsible for delivering mail to every resident of the nation at affordable rates is facing a financial crisis. Absent congressional action this year, the Postal Service will experience a cash shortfall and be forced to default on a payment to the federal government.
The increased use of the Internet, combined with an ongoing recession, has had a dramatic and unprecedented impact on our country’s mail volume — and on the Postal Service’s bottom line. We have responded by pursuing every available option under our control to aggressively cut costs and raise revenues, including slashing annual operating expenses by more than $12 billion and reducing our size by 110,000 career positions during the past four years.
We also continue to consolidate our processing facilities to reduce personnel and transportation costs and right-size our expansive retail network by conducting studies of approximately 3,700 retail offices for possible closure. At the same time, the Postal Service is continuing to work with local retailers to offer products and services at more convenient locations — places where people already shop, such as pharmacies, grocery stores and other appropriate retailers. This includes the introduction of the Village Post Office, an alternate access option that offers popular postal products and services such as stamps and flat-rate packaging — and opportunities for local businesses in communities nationwide.
These aggressive efforts, however, are insufficient to close projected budget deficits and ensure the survival of the Postal Service beyond our current fiscal year, which ends Sept. 30. The Postal Service needs Congress to enact legislation by this September that would eliminate the current mandate requiring retiree health benefit pre-payments, which costs the Postal Service $5.5 billion annually. Legislation also is needed to return a $6.9 billion overpayment into the Federal Employees Retirement System to the Postal Service. If it were not for the unique health benefit pre-funding requirement, the Postal Service would have recorded a cumulative profit of $1 billion from 2007 to 2010.
We also are exploring legislative proposals that would enable us to establish our own health benefits program, administer our own retirement system, and adjust the size of our workforce to match operational needs and the changing marketplace.
In addition, legislation is needed that will give us the authority to determine the frequency of mail delivery, which can save the Postal Service roughly $3 billion each year.
The Postal Service is not seeking tax subsidies. We receive no tax dollars for operating expenses, and rely on the sale of postage, products and services to fund our operations. Moreover, the Postal Service is not seeking additional borrowing authority. Indeed, the absolute last thing that Postal Service wants or needs is to incur additional debt. What the Postal Service needs is access to the money we already have over-paid into our retirement fund.
The Postal Service delivers to more than 150 million addresses daily, and the 167 billion pieces of mail delivered annually accounts for more than 40 percent of the world’s mail. We deliver to America’s homes and businesses more efficiently and at a lower cost than any comparable post — all without the financial support of the American taxpayer. Even in an increasingly digital world, the Postal Service remains critical to the economy, supporting a mailing industry that represents more than 8 million jobs and more than $1 trillion in commercial activity annually.
Regardless of how many people use the Internet to pay their bills and send documents, the core function of the Postal Service and core need of its customers — the physical delivery of mail and packages to America’s homes and businesses — will always exist. And despite doom-and-gloom headlines, the Postal Service can have a bright future and be put on the road to profitability if given the flexibility from Congress to operate more like a business does.
It’s time for Congress to swiftly complete its rounds, and pass substantive legislation to transform the Postal Service business model — which will put it on a sound financial footing for generations to come.
From the Sept. 21-27, 2011, issue