Postmaster General: Mail Days May Need To Be Cut

WASHINGTON (AP) - Massive deficits could force the post office
to cut out one day of mail delivery, the postmaster general told
Congress on Wednesday, in asking lawmakers to lift the requirement
that the agency deliver mail six days a week.

If the change happens, that doesn't necessarily mean an end to
Saturday mail delivery. Previous post office studies have looked at
the possibility of skipping some other day when mail flow is light,
such as Tuesday.

Faced with dwindling mail volume and rising costs, the post
office was $2.8 billion in the red last year. "If current trends
continue, we could experience a net loss of $6 billion or more this
fiscal year," Postmaster General John E. Potter said in testimony
for a Senate Homeland Security and Governmental Affairs
subcommittee.

Total mail volume was 202 billion items last year, over 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."

"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.

Dan G. Blair, chairman of the Postal Regulatory Commission,
noted in his testimony that cutting service could also carry the
risk of loss of mail volume. He suggested Congress review both
delivery and restrictions it imposed on the closing of small and
rural post offices.

The post office's problem is twofold, Potter explained.

"A revolution in the way people communicate has structurally
changed the way America uses the mail," with a shift from
first-class letters to the Internet for personal communications,
billings, payments, statements and business correspondence.

To some extent that was made up for my growth in standard mail -
largely advertising - but the economic meltdown has resulted in a
drop there also.

Potter also asked that Congress ease the requirement that it
make advance payments into a fund to cover future health benefits
for retirees. Last year the post office was required to put $5.6
billion into the fund.

"We are in uncharted waters," Potter said. "But we do know
that mail volume and revenue - and with them the health of the mail
system - are dependent on the length and depth of the current
economic recession."

He proposed easing the retirement pre-funding for eight years,
while promising that the agency will cover the premiums for
retirement health insurance.

At the same hearing the General Accounting Office agreed that
the post office is facing an urgent need for help to preserve its
financial strength. But the GAO suggested easing the pre-funding
requirement for only two years, with Congress to determine the need
for more relief later.

Potter noted that the agency has cut costs by $1 billion per
year since 2002, reduced its work force by 120,000, halted
construction of new facilities except in emergencies, frozen
executive salaries and is in the process of reducing its
headquarters work force by 15 percent.
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On the Net:
U.S. Postal Service: http://www.usps.com

(Copyright 2009 by The Associated Press. All Rights Reserved.)


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