By Sarah Mupo -- March 2, 2010
Photo by AP
To combat a projected $7 billion loss this year because of a reduced number of customers and increased shortfalls, the U.S. Postal Service is looking to regenerate a plan to eliminate Saturday delivery.
This measure is part of a comprehensive turnaround plan announced today that includes a proposed rate hike in 2011, a reduction in the workforce by 30,000 positions and an additional wave of branch closures.
Some elements of the U.S.P.S. plan will need congressional approval.
Postmaster General John Potter said that without serious steps, the agency could suffer a cumulative loss of $238 billion over 10 years.
"The projections going forward are not bright," Potter said in a reporter's briefing. But, he said, "all is not lost...we can right this ship."
Potter suggested a series of cost-cutting measures, such as restructuring retiree health benefits, altering delivery schedules and broaden efforts to sell stamps and provide other postal services at retailers and online.
"If given the flexibility to respond to an evolving
marketplace, the postal service will continue to be an integral
part of the fabric of American life," Potter said.
"In an ideal world," Potter said, Americans would be able to gain access to U.S.P.S. services online.
Sen. Tom Carper (D-Del), Chairman of the Senate subcommittee with oversight authority over the postal service, has asked Congress to be flexible in its future dealings with the struggling U.S.P.S.
"In light of the serious financial challenges facing the Postal
Service, postal management must be allowed to make the business
decisions they need to stay competitive and viable in the years to
come. As we have seen, it is not productive for Congress to act like a
535-member board of directors and constantly second-guess these
necessary changes," Carper said in a statement.
The postal service is considering collaboration with the private sector to place more post office locations in businesses like grocery stores and pharmacies.
This measure would give customers access to postal services at places with longer hours and more convenient locations as well as "improve customer service," U.S.P.S. Chief Financial Officer Joseph Corbett said in an interview.
This would equal a reduction in existing post office locations, but it is unclear how many branches will be closed.
Branch closures will be based on a combination of factors, like delivery volumes per location and proximity to other post offices.
The number of items handled by the U.S.P.S. declined from 213 billion in 2006 to 177 in 2009. This number is projected to fall to 150 billion by 2020. This shift is attributed to the move from paper to electronic communications.
The U.S.P.S. delivers nearly half of the world's mail, and faces tough competition from other delivery services, such as FedEx and United Parcel Service. The postal service has reported net losses since 2007.
A $297 million loss was reported by the U.S.P.S. for the first quarter of its fiscal year.
