Postal plan to have far-reaching effects
WASHINGTON (AP) – Local post office closings, phased-in price increases and possibly even cuts in six-day delivery are among the suggestions in a postal overhaul plan being sent to Congress. The proposal calls for a new law converting the post office to a commercial government agency after 2006. In the meantime the post office will start changes to cut costs and improve efficiency.
If Congress fails to act, the post office would be forced “to operate under its present increasingly outmoded business model until enough customers abandon the system to make financial failure unavoidable,” the agency said.
Postmaster General John Potter called the plan “a transformation of the Postal Service to protect universal service and enable us to grow our business.”
Battered by declining mail volume and rising costs, the Postal Service had a loss of $1.6 billion last year. The terrorist attacks and anthrax-by-mail have cost it hundreds of millions more and increasing losses are expected despite the 3-cent postage rate increase planned for this summer.
The aim is to determine how the post office can continue to provide and finance universal service, said Ralph Moden, postal vice president for strategic planning.
In the near term, through 2006, the focus “is on things we can do under our own control and authority” along with some moderate changes by Congress, said Moden.
Among the proposals is legislation to allow changes in “service levels and delivery frequency.” Asked if that meant six-day mail delivery was on the block, Moden said the agency “would like some latitude and some flexibility in that area.”
Potter said, however, “We know that people enjoy that six-day delivery, we know there is a business value to it.” With more pricing flexibility and adjustments to operations, he said, “we believe that we can protect six-day delivery well into the future.”
Among other changes would be working with the Postal Rate Commission to streamline the rate process to provide more regular and predictable price changes, including phased-in rates.
Potter said that might mean small annual increases for commercial mailers while the public would get an increase every other year or every third year.
The agency also would lift its self-imposed moratorium on closing post offices and seek to streamline the process for closures.
“I want to make it abundantly clear that I’m not calling for wholesale closing of post offices,” Potter said. “Offices are part of a very valuable network … we will continue to provide access to every American.”
But he also noted that, unlike years ago, stamps are now available in grocery stores and via mail-order, telephone and Internet.
The post office has not received any taxpayer subsidy for operations for years, although Congress recently voted $500 million to assist in coping with the anthrax contamination and to seek ways to prevent it from happening again.
The proposed long-term changes would move to a more private-business type of bargaining with unions, including a mediation process similar to that in the Railway Labor Act.
Unlike the current system that often ends in compulsory arbitration, the proposed plan would include the possibility of strikes and lockouts.
William Burrus, president of the American Postal Workers Union, called that idea a “non-starter” because the process, he said, can be manipulated by the White House to impose a settlement.
Burrus also reiterated his union’s stance that the post office could increase revenues by reducing discounts to major mailers for presorting mail.
The proposed new agency would also drop the current requirement that it break even financially over time for one that allows profits that could be used to finance capital improvements or for other purposes.
It would use private business style purchasing rather than government systems and would look for new products and services to offer, including investing in related businesses and possibly permitting other retail operations in post offices.
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