Wednesday, April 14, 2010
It's no secret that the U.S. Postal Service has had financial woes for years. Now the organization is studying the idea of eliminating Saturday mail delivery in an effort to save money.
To borrow the catchphrase of ESPN college football analyst Lee Corso, "Not so fast, my friend."
The USPS recently informed the Postal Regulatory Commission that due to falling mail volumes and revenues, it was recommending eliminating Saturday mail collection and delivery except for Express Mail and existing post office box service.
USPS lost $3.8 billion last year and would have lost more than $7 billion if Congress had not delayed payments into a retiree health care fund. USPS is under pressure from a variety of competitors, most notably the Internet and e-mail. It expects to process far less mail, down from 213 billion pieces in 2006 to an estimated 150 billion in 2020.
But eliminating Saturday mail doesn't address many of the problems facing the U.S. Postal Service and its financial woes. The agency has to reshape itself.
Consider the hardships that would result through the loss of Saturday mail service.
Numerous small businesses, many already struggling due to the poor economy, will see delays in cash flows and won't be able to send or receive packages. The flow of mail will be delayed because of the elimination of processing on Saturday, further impacting businesses and the general public on other days.
We'd be remiss if we didn't admit that the newspaper industry relies heavily on the mail and Saturday delivery. A number of community newspapers publish weekend editions and a growing number of dailies use the mail for delivery. The elimination of Saturday service would create a hardship, not just on the newspapers, but on the advertisers and the shoppers those businesses are trying to reach.
The USPS has several issues it must first address to remain viable and serve its customers before it considers eliminating Saturday service.
Most importantly, it must bring labor costs in line with other businesses. USPS labor is 80 percent of its total cost, about 30 percent higher than national competitors. Admittedly, it has to reach every household, which competitors may not. Even so, the next generation of contracts has to slice that percentage or the next generation of workers may have no jobs at all.
Second, it cannot be required to prepay its retiree health benefits, leading to annual payments of about $5.5 billion. Other federal agencies have far better payment terms.
Third, it must develop more efficient ways to process and deliver the mail. That may necessitate closing some post offices.
There are still nearly 309 million reasons -- more than 77,000 in Polk County -- to keep viable six-day mail delivery. It's a valuable service that Americans have depended on for decades.
Perhaps Saturday mail will vanish. Long term, that may be the best solution. But that should be the final step, not the first, in reinventing USPS. For the short term, six-day mail service must live on. Cutting service never helps a business grow.