USPS Update
Posted by Gary O'Rielly
on Sep 02, 2011
Ernie Swanson, spokesman for the United States Postal Service was our guest speaker on September 2nd. Following is a summary of his presentation to our club. If the USPS was a Fortune 500 company, it would rank 29th in the Top 500. Currently the Postal Service is self-sufficient and is not funded by Congress. Four years ago the USPS delivered 213 billion pieces of mail. In 2010, the number of pieces going through the system was 171 billion pieces down 25% in just four years. Mr. Swanson stated that the impact from the electronic media, is the main reason for the decrease in postal mail. The Postal Service relies on First Class mail which is their bread and butter but it is down 25%. Reasons contributing to their huge financial losses can be attributed to the Posal Enhancement Act of 2006 requiring that the Service pre-pay their retiree health care benefits. Other areas open for discussion is reform to their labor agreements, reduction in hours of service, including cutting Saturday delivery, cutting out 20,000 carrier routes nationwide, reducing the number of mail processing centers. Currently there are 3,700 offices that could close in the near future but would have a huge affect on small communities. The Postal Service is considering adopting the Village Post Office concept as a means of reducing their cost. There used to be 365,000 blue boxes. Currently their are 160,000 and more blue boxes could disappear in a cost cutting mode. Cutting out Saturday delivery would save the Postal Service around $3.5 billion annually. And the retirement fund is over-funded by $60 billion dollars but to recoup any of the funds for the general budget would require Congressional action. The Postal Service surpasses both Fedex and UPS in volume. Obviously, there will be more attention to their financial situation in the coming days, months and years.