Entries in United States Postal Service (4)


USPS Offices Won't Close, Instead Cut Hours

Joe Raedle/Getty Images(WASHINGTON) -- After 10 months of angst and outrage that spanned from rural Montana to Capitol Hill, the U.S. Postal Service announced Wednesday that the 3,700 post offices targeted in May for closing will remain open.

Instead, USPS plans to reduce the hours of operation at 13,000 rural post offices from a full eight-hour day to between two and six open hours per day, a move that the struggling mail service claims will save about $500 million per year.

“This is a win-win,” Postmaster General Patrick Donahoe said at a news conference Wednesday. “The bottom line is that any rural community that wants to retain their post office will be doing that.”

Under the new plan, about 9,000 current full-time postal employees will be reduced to part time and lose their benefits after the offices they work at are put got to two to four open hours per day. Another 4,000 full-time employees will see their hours reduced to part-time, but will retain their benefits. These workers will be at post offices whose hours are reduced to six hours per day.

“If we can shrink the labor cost we can keep the building open, that’s not hard to do, and ensure that customers have access,” Donahoe said.

Even though many post offices will have vastly reduced operating hours, people will still be able to access their P.O. boxes all day.

“We think this is the responsible thing to do,” Donahoe said. “Any company that listens to their customers would come up with a good solution like this.”

But House Oversight Committee Chairman Darrell Issa, who has co-sponsored a postal reform bill in the House, said today’s plan only addresses a small fraction of the Postal Service’s massive budget shortfall. Rural post offices that will be impacted by the plan account for less than one-eighth of the $5 billion USPS spends each year on operating post offices, Issa said in a statement.

“To achieve real savings creating long-term solvency, the Postal Service needs to focus on consolidation in more populated areas where the greatest opportunities for cost reduction exist,” Issa said.

Under the plan announced last summer, the Postal Service was reviewing 800 urban post offices for possible closure. All of those city offices, many of which are clustered within blocks of each other, will remain untouched under the current plan.

The postmaster general noted that USPS’s plan to reduce operating hours achieves only a fraction of the $22.5 billion in cuts necessary to put the Postal Service back in the black. The USPS has posted a multi-billion budget shortfall last year in part because first class mail volume has plummeted 28 percent over the past decade.

Donahoe is also pushing for a plan to reduce mail delivery to five days per week and reform the postal employee retirement system, but has to have Congressional approval to implement either item. Postal reform is currently caught in a tug-of-war between the House and the Senate.

The postmaster general set a goal for Congress to pass, and the president to sign, comprehensive postal reform by this summer.

The Postal Service aims to start reducing office hours at selected rural post offices starting around Labor Day and have all 13,000 offices now under review operating under reduced hours, consolidated with a nearby post office or local business or closed in favor of rural delivery by the fall of 2014.

Brennan said she expects that “very few” of these small-town post offices will close as communities opt for shorter hours instead.

Since USPS announced their decision to begin cutting post offices in July, 500 have already closed and will remain closed under the new plan. But the 400 offices that had been targeted for elimination will now remain open and operate for between two and six hours per day.

Copyright 2012 ABC News Radio


50-Cent Stamp, Other Postal Changes Coming

Joe Raedle/Getty Images(WASHINGTON) -- The United States Postal Service may raise the price of first class postage to 50 cents. The U.S. Post Office, facing financial losses of up to $18.2 billion a year by 2015, wants to charge more for postage, more for services, and to suspend Saturday delivery.

The 50-cent stamp would represent an 11 percent increase in postal rates.

USPS delivers 40 percent of the world’s mail. Its revenues exceed $65 billion a year.

The service said last week that it lost $3.3 billion last quarter, and that it is forecasting a loss of $14.1 billion for the year ending Sept. 30. Such losses, said the Postal Service in a letter sent last week to Congress, would be ”unsustainable” and would cause USPS to become “a burden” to the U.S. taxpayer. The letter called that outcome “highly undesirable.”

Currently, USPS gets no taxpayer dollars for its operating expenses, which are funded by the sale of postage and postal services.

Suspending Saturday delivery would save $2.7 billion a year, the Postal Service says. Raising the cost of first-class postage to 50 cents would increase annual revenues by $1 billion.

The post office’s chief financial officer said USPS is the least expensive major postal service in the world, and that its services are “clearly underpriced.”

The last postal increase occurred late last month, when the cost of mailing a first-class letter rose from 44 cents to 45 cents. Rates also rose for packages, for periodicals, and for a wide variety of services.  The law limits USPS increases overall to the rate or inflation, or 2.1 percent a year.

Before the January increase, USPS first-class rates held steady for two and a half years.

To raise revenue, the Postal Service has introduced new products. In 2012, they include Package Intercept: For $10.95 (plus Priority Mail postage), a customer can intercept and recall a package already sent  before it reaches its destination.

Copyright 2012 ABC News Radio


Snail Mail May Get Slower: Postal Service Looks to Cut $2 Billion

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- The Postal Service announced Monday that it is moving forward on a plan to cut over $2 billion that will come at the cost of making First Class mail delivery slower.
The proposed slowing of First Class mail service comes at a time when the postal service is losing business to faster digital communication options, like e-mail on online bill payment. The proposed change risks the possibility of further encouraging costumers to transfer their communications to digital mediums, but Vice President of Network Operations Dave Williams says the decision is a necessary to put the Postal Service “on sound financial ground.”
“We have to do this, we have to make this change in order for the postal service to become financially viable,” Williams told reporters Monday. Williams went on to say that the service expects to lose $14 billion this year if it doesn’t get congressional relief.
Under the plan, which the Postal Service is now sending to the Postal Regulatory Commission for review, First Class mail would no longer have an overnight processing standard. The standard delivery window for First Class mail would increase from its current 1-3 day delivery standard to 2-3 days.
In addition to the proposed increase in the standard delivery time for First Class mail, the plan takes into consideration closing 252 of the nation's 461 mail processing centers.
Post Master General Patrick Donahue says that with the proposed consolidation of processing centers, about 35,000 employee’s jobs will be affected. These job losses would add to the 250,000 jobs that the postal service has already lost over the last decade.
While the 252 processing centers under review will not be affected until the Postal Regulatory Commission’s review is complete in approximately three months, the postal service has already begun a process of cutting back its processing centers. Since September, the Postal Service has closed 26 processing facilities, according to Williams.
The postal service is also looking to cut back delivery service from six days a week to five days a week, which Donahoe says would save $3 billion, as well as cutting back on retiree health care costs. These two cost-saving measures, however, need congressional approval before they can be implemented.
“Congress needs to act now,” Donahue said. “We’ve got two bills, one in the House, one in the Senate, the administration is waiting …We need to act right now.”
The postal service projects that it needs to decrease its total operating costs by $20 billion by 2015 in order to keep up with the continued decrease in the demand for the service.
“What we have to do is look at what we can take out of this organization from a cost standpoint because we have lost volume and we have lost revenue and you can’t just sit back and wait, you’ve got to act on these things,” Postmaster General Patrick Donahoe told reporters Monday. “We’ve got a goal of $20 billion dollars and we’re going to do that in order to keep ourselves financially helpful.”

Copyright 2011 ABC News Radio


United States Postal Service Hopes for Federal Help as Debt Grows

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- The United States Postal Service is in deep debt trouble and is counting on Congress to help out.

The USPS, which is not federally funded, has maxed out at its borrowing limit and will likely default on a $5.5 billion prepayment for employee health benefits, The New York Times reports.

The public shift of "snail mail" to email and online bill payments has caused mail handling to diminish, running debts to $9 billion this year with a $67 billion budget, according to the Times.

The USPS has appealed to Congress in the past to allow for the cutting of Saturday mail delivery.  But in spite of not receiving federal funds to support its service, the USPS' requests have been repeatedly rejected.

Now the Postal Service plans to make its request to eliminate Saturday delivery once again, and will seek to cut 220,000 over three years while looking into replacing 3,650 of its 32,000 offices with contracted retailers over the same amount of time, the Times reports.  Cutting Saturday delivery could save $40 billion over 10 years.

Despite the significant shift to online communication, Americans still want their mail delivered.  But this means Congress will have to pass a good amount of reforms.

Copyright 2011 ABC News Radio

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