Recently I had the pleasure of hearing our current US Postmaster General & CEO of the US Postal Service, Pat Donahoe, give an update on the state of the Postal Service. He noted that the shrinkage of First-Class Mail is driving the continuing trend of operating losses, and even though the USPS shipping & packages segment is growing, it’s not sufficient to replace the previous First-Class profits. Additional operational cuts, efficiency improvements and legislative action are needed to help shrink the gap between expenses and revenue. $19.7 billion in savings from proposed operations and workforce incentives, along with aggressive benefit changes, are on the table to combat the 79% of the total USPS cost base dedicated to labor today.
$11.1 billion of the proposed savings require legislative action that will give the Postal Service authority to generate new revenue and adapt to changing business conditions.
A key legislative point is allowing the USPS to manage their own health care plan which is facing resistance as people on the hill are concerned that health care costs to all other government employees will significantly rise as a result of the USPS’ departure. Items such as refunding the Federal Employee Retirement System (FERS) overpayment and controversial 5-day delivery debate are also crucial to the USPS Business Plan financial projections that show a debt-free entity by fiscal year-end, 2017.
Getting the current group in Washington to act on these points will be a challenge to say the least. The economic and structural hurdles that the USPS faces can be cleared with action from Washington. All of our businesses rely on the USPS’ mission to provide secure, reliable and affordable universal delivery services, and our Representatives must stop stonewalling this imperative legislation and take action now.
By Joy Zerbach – Vice President, Marketing