What will deliver USPS from debt?
With mail volume down 20 percent and a mountain of debt to sort out, Congress wants to know what the U.S. Post Office plans to do to bring costs down. This could mean the end of Saturday deliveries. John Dimsdale reports.
A man drops letters into a mailbox in San Francisco (Justin Sullivan/Getty Images)
More on Fed. Budget/Govt. Spending
TEXT OF STORY
Steve Chiotakis: Recession? Check. The Internet making snail mail less and less needed? Oh yeah. Private delivery competition? You bet. The Post Office has seen a 20 percent drop in mail volume and now is in a heap of debt. Today, a congressional committee wants to look at what the U.S. Postal Service is proposing to bring costs down. Here's Marketplace's John Dimsdale.
John Dimsdale: The Government Accountability Office will testify today that the postal service has been added to the list of government agencies at high risk for financial failure. The GAO's Phillip Herr doesn't expect the volume of mail to return anytime soon.
Phillip Herr: Their financial situation is deteriorating. At this point, they don't expect to cover their expenses and obligations in fiscal years 2009 and 2010.
That's despite a two-cent increase in stamp prices in May and lots of cost cutting. Fewer employees, fewer streetcorner mailboxes. Deputy postmaster general Patrick Donahoe says more than 90 percent of today's delivery service is automated.
Patrick Donahoe: When the letter carrier who comes around to your neighborhood delivers the mail, he or she never touches it until they take it out of the tray and put it into your mailbox. It's already sorted for them the whole way through the system.
Donahoe says USPS is trying to minimize cutbacks in customer service, but 3,200 post office branches nationwide are slated to be closed. And if Congress gives the OK, home mail delivery on Saturdays will be dropped, saving $3.5 billion a year.
In Washington, I'm John Dimsdale for Marketplace.
Comments
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From Finlayson, MN, 08/02/2009
It seems that if the USPO was run like a company and not a government agency it would help a lot of things. The market would drive it to be more adaptive to consummer demand, which customer service would be one of them. Also, they could adapt to be more competetive in localized regions. Maybe in is profetabe in some places to provide Saturday and not in others. there would be review to avoid excess level of management and where local regions would be recognized and rewarded for reducing expences not getting there budgets reduced. aslo, employees could be paid bassed on local rates and preformance.
From waltham, MA, 08/01/2009
I work for this glorious company called the us post office and let me start by saying the reason it's losing so much money is not the economy it's the moron's running it. I am carrier in a small town and in my station we have drastically cut overtime and are constantly doing what they call "pivoting".This is when your work extra on another route as well as yours with no overtime.Now as all this cost cutting is going on, which let me say that is necessary sometimes and i have no problem with doing my part.That being said this small office was paying 4 supervisors and a manager a lot of money to sit around and answer the phone when there boss calls from in town and wants to make sure there's no overtime. Now this is one small office with five boss's working at one time.Imagine nation wide if this is how they run the post office and you now have your answer to why the post office is losing so much money. I could go on and on and some day i might right a book about the worst company ever to work for, maybe when i'm collecting unemployment.
`j.v
From Clio, CA, 07/31/2009
To make a profit all you need to do is provide a better service. Instead if cutting Hours or Days - Work harder for the customer. Increase Days and Hours the post office is Open - Stay open later so I don't have to go to FedEx to do my shipping.
From Bridgeport, CT, 07/31/2009
STOP SAturday Delivery already. This has been talked about for more than 30 years, JUST DO IT! This alone will greatly decrease costs, i.e. OT, energy, employment needs, maintenance, the list goes on and on...Nobody needs delivery 6 days a week
From MA, 07/30/2009
I've worked for the USPS as a carrier for 5 years, and a loss of a day(Saturday) delivery would put a lot more people on the unemployment line....including myself. Any carrier with under 6 years of employment with the USPS would be in HUGE danger of losing their job. What will the unemployment rate be after that 12%. Just what this country needs!
From L.A., CA, 07/30/2009
I agree with David Spalding. The USPS has some major issues with service. Many times it's lost my packages, outbound and inbound, costing me thousands of dollars. I'm glad to let it fail.
From Durham, NC, 07/30/2009
What will deliver the USPS? Focus on customers, and customer service, for one. I sent something via two-day, Priority Mail July 13th, and it didn't arrive until July 20th. When I called them 5 days after mailing for an explanation, the answer was, "Well, two-day delivery is a goal, but we don't guarantee it." I never got the requested call back with further information. Why'd I pay $5 just to get $0.42 of service, and a hand-wave explanation? Let the USPS tank, other companies already do the job better.
From La Crosse, WI, 07/30/2009
I work in the Direct Mail industry. Less mail in my customer’s mail box means more business for me. Americans take time out of their busy day to read the mail. If there are fewer items to try and compete for their attention, then my products will become more effective. I definitely feel that less will be much, much more for people like me that use the mail as a source of income. Plus there is no need to receive so much “junk” in the mail.
07/30/2009
For crying out loud - Just make stamps 50 cents, already!
Mail is one of the cheapest most reliable services Americans get.
That said, the economy has (very thankfully) absolutely tanked the junk mail business. I barely fill my recycle bin each week now.
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