SEARCH

Entries in USPS (35)

Tuesday
Nov222011

Awaiting Action, US Postal Service Hanging on by a Thread

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- The United States Postal Service is very close to hitting panic mode as time continues to wind down to save the beleaguered agency.

On Monday, Postmaster General Patrick Donahoe said that taken separately, bills by the House and Senate would result in only one year of profitability and a decade of continued deep losses.  He argued that the only salvation is to combine the best elements of both measures so that "Congress can provide the Postal Service with the legal framework and the business model it needs."

Struck by declining business since 2006 because of electronic mail and the recession, the Postal Service stands to lose $14.1 billion during the 2012 fiscal year.

Among other things, the USPS is recommending the adoption of a new health benefit plan through Medicare, which could result in a savings of $20 billion over a decade.  The agency also wants Congress to stop requiring the Postal Service to pay in advance for future retirees’ health benefits.

Meanwhile, the USPS is currently in the middle of negotiations with its two biggest unions, the National Association of Letter Carriers and the National Postal Mailhandlers Union.

Copyright 2011 ABC News Radio

Wednesday
Nov162011

US Postal Service Lost $5.1 Billion in 2011

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- Despite closing down under-used post offices and reducing its work force, the U.S. Postal Service still faced a hefty loss during its 2011 fiscal year.

The USPS reported on Tuesday that between Oct. 1, 2010 and Sept. 30, 2011, it lost $5.1 billion.  The agency added that had it not been for the postponement of Congressionally mandated payments to pre-fund retiree health benefits, losses would have more than doubled to approximately $10.6 billion.

Postal officials said the amount of First-Class mail -- USPS' largest and most profitable product -- declined faster than expected, falling 1.7 percent from last year.  Income was up from Priority Mail, however, which is often used to deliver packages people order online.

The Postmaster General warned that more losses could come if Congress doesn't step in and help.

“The Postal Service can become profitable again if Congress passes comprehensive legislation to provide us with a more flexible business model so we can respond better to a changing marketplace,” Postmaster General and CEO Patrick Donahoe said.  “To return to profitability we must reduce our annual costs by $20 billion by the end of 2015.  We continue to take aggressive cost-cutting actions in areas under our control and urgently need Congress to do its part to get us the rest of the way there.”

Copyright 2011 ABC News Radio

Wednesday
Oct192011

Postage Stamp Prices to Rise Again

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- Given all the drastic changes planned or proposed to keep the United States Postal Service alive, it might come as no surprise that the price of a postage stamp is expected to go up next year.

Starting on Jan. 22, the USPS is boosting the cost of a stamp from 44 cents to 45 cents.

On the bright side, this is still slightly less than the rate of inflation, which is currently 2.1 percent.  If customers bought the "Forever" stamps at 44 cents apiece, they'll still be good when the new price rates take effect.

Meanwhile, the cost of sending a postcard will go up three cents to 32 cents. There are other price hikes as well, including sending letters and packages out of the country.

The USPS lost $8 billion last year and is poised to lose $10 billion during fiscal year 2011. The agency is preparing to shut down thousands of smaller post offices and distribution centers, which will also mean huge layoffs. There's also talk of ending Saturday delivery.

Copyright 2011 ABC News Radio

Tuesday
Sep272011

US Postal Service to Feature Living Americans on Stamps

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- In another desperate gambit to avert a total collapse, the United States Postal Service will start issuing stamps with the images of living Americans.

Stephen Kearney, executive director of stamp services, explained, "The main criterion [for the honor] is outstanding contribution to the U.S."

That would cover people in all fields including business, science, sports and entertainment.  However, Kearney said, current politicians either in office or with plans to run would be exempt from consideration.

Suggestions are already pouring into the USPS Stamp Facebook page, including Oprah, Bruce Springsteen, Lady Gaga and Rush Limbaugh.  Ordinary folks can also nominate themselves, if they feel so inclined.

There’s been no announcement yet as to when the winners will be picked but the Postmaster General will make the ultimate decision about who gets honored from a list of finalists.

At the very least, it’s an interesting gimmick, one that could boost sales although with the post office projected to lose $10 billion over the fiscal year, they’d have to sell an awful lot of stamps to make up the difference.

Copyright 2011 ABC News Radio

Thursday
Sep152011

Slower ‘Snail Mail’ Possible as USPS Looks to Eliminate 252 Processing Centers

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- In its latest attempt to shore up a more-than-$8-billion budget shortfall, the U.S. Postal Service announced Thursday that it is looking to close 252 mail processing centers, about half of all such facilities, in the next two years.

Postmaster General Patrick Donahoe said the “very ambitious operational plan” would eliminate 35,000 jobs, saving the Postal Service an estimated $3 billion annually. It would also result in slower “snail mail,” increasing standard delivery for first-class mail to two days from one.

“These are significant changes that will lay the foundation for the way the Postal Service processes mail for decades to come,” said Megan Brennan, USPS chief operating officer. “It will put us ahead of the cost curve for the remainder of the decade.”

By ending overnight delivery time for most first-class mail such as letters, magazines and postcards, the government-owned corporation will be able to run its processing plants 20 hours per day instead of just six hours overnight.

“Our entire network was designed based on the requirement that we maintain the capability to deliver first-class mail the next business day and this requirement limits our ability to sort mail until all the mail to be sequenced for the local letter carrier has arrived at the facility,” Brennan said. “It’s why we currently maintain so many mail processing facilities.”

But some argue the cutbacks are the wrong approach to solving the Postal Service’s financial problems.

“The mail-processing network is a major asset. Destroying it is misguided and counterproductive,” Cliff Guffey, president of the American Postal Workers Union, said in a statement. “The Postal Service should be urging Congress to address the cause of its problems -- not slashing service and demolishing its network.”

Brennan said the closures will not result in any layoffs. Instead, America’s largest employer will eliminate the 35,000 positions through forced retirements because 150,000 of USPS’s 559,000 employees -- about one-quarter -- are already eligible for retirement.

But as more people turn to email and online bill pay, the Postal Service revenues have plummeted in the past five years. Since 2006, Americans have sent 43 billion fewer pieces of mail. This 17-percent decline in mail volume has stripped $16 billion from postal service revenues, according to a March 2010 USPS report.

The report predicted mail volume would plunge another 37 percent in the next decade.

Postal Service spokesman Dave Partenheimer told ABC News last week that the USPS will have reached its $15 billion borrowing limit by Sept. 30, the end of the fiscal year and will be unable to make its congressionally mandated $5.5 billion yearly contribution to its employee retirement health care fund.

“We do have cash flow issues. We can’t make this $5.5 billion payment. I won’t make that,” Postmaster General Donahoe said Thursday. “It’s physically impossible.”

Donahoe said the processing plant closures are just one step to fixing USPS’s budget crisis. He has also asked Congress to approve ending Saturday delivery, which he said would save an additional $3 billion. The service is also looking at cutting 3,700 post offices before 2015.

“The Postal Service is still a critical part of the American economy. We are not going out of business,” Donahoe said. “What we are trying to do is get our finances in order so we can stay out there in business and provide excellent service for a long, long time to come.”

Copyright 2011 ABC News Radio

Tuesday
Sep132011

Can Junk Mail Save US Postal Service?

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- Many people hate getting it, but junk mail may wind up being the white knight that rescues the U.S. Postal Service.

With the USPS poised to lose as much as $10 billion this year, there are fears that mail delivery might cease by the winter.  Since the volume of first-class mail has dropped substantially since the advent of electronic alternatives, direct marketers could presumably step in to fill much of the void.

In short, that means your mailbox, which may already be bulging from catalogues you don't ever remember requesting, will really be overflowing with unwanted mail.

Couponers and catalogers appear at the ready to inundate people with all those standard mailings, and the USPS is now welcoming the business. It was just four years ago that the post office hiked up prices to discourage direct marketers.

The direct mail industry likes the old fashioned way of getting catalogues and coupons out to Americans because e-mails often go unopened.  But when they arrive at home, people actually have to pick up the junk mail whether they want to or not.

Copyright 2011 ABC News Radio

Wednesday
Sep072011

Administration Makes 11th Hour Effort to Rescue Postal Service

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- Can the White House make a special delivery to save the U.S. Postal Service?

To rescue the agency, it will take a 90-day extension by Congress on a $5.5 billion bill owed by the Postal Service in mandatory annual retirement payments -- the root of its financial woes.

If there's a grace period granted, the White House says it will craft a financial rescue plan to save the agency, which is threatening to shut down by the winter because of record shortfalls and a dwindling revenue stream.

Office of Personnel Management Director John Berry told a Senate panel Tuesday that three months will give officials enough time "to carefully work through the details of a proposal."

Postmaster General Patrick R. Donahoe painted a dire picture of the Postal Service's situation, explaining that it could lose as much as $10 billion and have just over a week's worth of money to pay salaries and expenses when the fiscal year ends on Sept. 30.

Sen. Joe Lieberman, an independent from Connecticut, said that the economy can ill-afford the Postal Service going broke and shutting down.  Meanwhile, Maine Republican Sen. Susan Collins chastised the administration for waiting until now to try and come up with a plan to rescue the post office.

Copyright 2011 ABC News Radio

Tuesday
Sep062011

Do We Need the Postal Service?

Joe Raedle/Getty Images(WASHINGTON) -- Is the post office a vital part of the economy or a money-losing dinosaur that delivers junk mail?

William Henderson, former postmaster general from 1998 to 2001, told ABC News Tuesday that there is a role for hard-mail delivery through the postal service’s automated infrastructure and especially for those with low-incomes behind the digital divide, but the business is dying.

“The postal service was by far and away the most efficient mail service in the world, but that efficiency doesn’t help you if you don’t have work,” Henderson said.

Congress’ Committee on Homeland Security and Governmental Affairs hosted a hearing at Tuesday afternoon called “U.S. Postal Service in Crisis: Proposals to Prevent a Postal Shutdown.” Even after proposing to close 3,700 offices over the next year, the U.S. postal service has a $9.2 billion deficit and is near a default.

Casey Chan of Gizmodo writes the postal service must innovate to stay alive. “Heck, the only thing I need a physical mailing address for these days is to get physical packages from Amazon, UPS and FedEx do just fine and do it with lower labor costs (53% of its expenses for UPS, 32% for FedEx compared with 80% with the USPS) -- the private delivery services just run more efficiently as a business,” Chan writes.

Henderson said the postal service has tried to improve its business with innovation ever since it released a report in 1976 that predicted electronic media would decrease physical mail delivery. Those ideas included adding an email address to every physical address, email certification services, and even offering Internet access in post offices. But those suggestions were often rebuffed because the government did not want “intrusions” on the Internet.

The postal service has tried business strategies with some success, including flat-rate boxes and television marketing. It also has a vision plan for 2013, which includes expanding web services through usps.com and mobile applications.

Henderson said he has long argued for privatization of the postal service, but no one has the “stomach” for that solution yet.

Sally Davidow, spokeswoman for the American Postal Workers Union, said the need for the postal service is evident from the large outcry after it announced plans to close post offices. The postal service has a further reach and differentiated prices and services that the private mailing industry does not offer, she said.

In addition to household demand, Davidow said businesses rely on the postal service and it is “vital to our economy.”

From 2008 to 2010, sales revenue in the mailing industry, which includes private mailers and printing companies, grew by 10 percent to $1.1 trillion and increased jobs by 16 percent. Davidow said the mailing industry accounts for seven percent of U.S. GDP. She said 91 percent of mailing industry jobs are in private sector and 75 percent of those jobs are in firms dependent on the postal service infrastructure.

If nostalgia is the main reason to prevent a further shutdown of post offices across the country and privatization of the postal service, then that’s not good enough, said Tad DeHaven, budget analyst with the Cato Institute.

“The question is, ‘Does the federal government still need to be in charge of it?’ The answer, in my point of view, is no,” DeHaven said.

Postal services in the Netherlands and Germany have been privatized and offer other services like banking, DeHaven said. Though he cautions diversifying into other lines of businesses may create unfair competition against the private sector.

Henderson counter-argues that the postal service is not supported by the government but by its own revenues.

“It does have a monopoly, which is not worth much today because of declining mail volume,” Henderson said.

Copyright 2011 ABC News Radio

Monday
Sep052011

US Postal Service Nears Default

PAUL J. RICHARDS/AFP/Getty Images(WASHINGTON) -- As the U.S. Postal Service begins shuttering offices across the country to stem their ever-growing $9.2 billion deficit, the entire agency now faces default and could shut down next summer, Dave Partenheimer USPS spokesman told ABC News on Monday.

"Right now, we think we can make it through until next summer most likely but then some hard choices will have to be made," he said. "That's why it's such an urgent crisis."

USPS owes $5.5 billion to fund future retirees' health benefits, and next year it may not have money to pay its 170,000 employees. Partenheimer said that by Sept. 30, the end of the USPS fiscal year, the agency will have reached its borrowing limit of $15 billion.

The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on Tuesday on the situation.

According to The New York Times, the USPS is considering several revenue-boosting measures including gaining the right to deliver wine and beer, placing commercial advertisements on postal trucks and in post offices, and offering more hand-delivery services.

The USPS wants Congress to restructure its health care and retirement systems, to make them independent from the federal government. In addition, the agency would move to five-day delivery, Partenheimer said, but can't do so without Congressional action.

"That would save us $3.1 billion," Partenheimer said.

In the meantime, USPS continues to cut costs.

"We've reduced costs by more than $12 billion in the last four years and cut our career workforce by 110,000 in past four years," Partenheimer said.

In July, when news about the office closures made headlines, Postmaster General Pat Donahoe told ABC News, "We do not want taxpayer money. We want to be self-sufficient."

Rep. Darrell Issa, R-Calif., the chairman of the House Oversight Committee, which oversees the Postal Service, has proposed a bill that would allow Congress to appoint a committee to take control of USPS until it's financially stable.

That bill has been referred to the Subcommittee on Federal Workforce, U.S. Postal Service, and Labor Policy.

The USPS responded to Issa's proposal saying, "We strongly oppose a provision in the bill that provides for an additional $10 billion in borrowing authority from the U.S. Treasury. The Postal Service does not need to incur additional debt."

In 2010 alone, the Postal Service experienced its largest one-year net loss of $8.5 billion.

Copyright 2011 ABC News Radio

Monday
Aug292011

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







ABC News Radio