In an effort to curb anticipated shortfalls, the U.S. Postal Service may discontinue Saturday delivery service, cut down on overtime, raise postal rates, and layoff about 30,000 of its 596,000 employees. According to a new article on Reuters.com highlighted an announcement on precisely that subject by USPS CFO Joseph Corbet.
The recent proliferation of private delivery companies and the surging popularity of electronic communications are expected to reduce the volume of first class mail in 2010 by 10 billion pieces. Mail volume by 2020 is anticipated to fall 37 percent, shorting the USPS upwards of $ 238 billion. There isn’t any debt management strategy or technique to deal with that kind of loss.
Losses, losses, and more losses
The postal service has been reporting net losses since 2007. Last month it reported a loss of $ 297 million for the first quarter of its fiscal year. The competition created by FedEx and United Parcel Service, along with the increasing number of grocery stores and other retail establishments that now sell postage stamps and mail-related services, could soon cause post-office buildings to start boarding up.
Health benefits for retirees
The same Reuter’s article highlighted that the Postal Service might be unable to meet an upcoming obligation of $ 6.6 billion this coming fall required to cover workers’ compensation liabilities and to fund retiree health plans. Similar payments were restructured by Congress last year, but there are no assurances that the same legislative leniency will be forthcoming this year.
Ruth Y. Goldway, Chair of the PRC
The chair of the Postal Regulatory Commission (PRC) Ruth Y. Goldway is not for cutting Saturday mail service. According to a recent post on CBSnews.com, Goldway believes that cutting Saturday delivery would threaten the monopoly status of the postal service and undermine “the vitality of the mail system.”
Postmaster General John E. Potter
Possibly as a strategy to obtain other concessions, Postmaster General John E. Potter is pushing to eliminate Saturday service. CBSnews.com opines Potter might believe the PRC and Congress are more apt to relieve the USPS from obligations for retiree health benefits than agreeing to reduce service.
The customer
It is certain that a postage rate increase will take place. Legal loopholes allow the USPS to make greater-than-inflation increases in extraordinary situations. The current situation probably qualifies as extraordinary by almost anyone’s definition. Bear in mind that the U.S. postage rates are among the lowest in the world. Concordantly, any bulk mailing you do in the near future might have you thinking about same day cash loans to be able to mail with any kind of frequency in bulk.
