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Fredric V. Rolando, president of the National Association of Letter Carriers, said Friday that Postal Service legislation pending before Congress lacks any long-term vision and fails to provide for the creation of an effective business plan for a vital American institution.
“What the Postal Service needs most is a new business model,” Rolando said, “built from the bottom up, one that looks above the immediate financial and structural problems to find opportunities to meet the evolving needs of the American people in the 21st century.”
Instead, he said, Congress and Postal Service management are so focused on cutting costs — including ending Saturday delivery, closing hundreds of post offices and other facilities, delaying delivery times and eliminating 150,000 jobs — that the inevitable result will be more long-term damage.
Degrading services to residents and business will only drive customers away from the Postal Service, further reducing revenue and eventually destroying the world’s best and most-affordable delivery network, Rolando said. It also will threaten the 7.5 million private-sector mailing industry jobs that depend on a robust Postal Service.
Rolando spoke at the Advanced Workshop in Regulation and Competition sponsored by the Center for Research in Regulated Industries at Rutgers University at Newark, N.J.
A successful business plan, he said, would be “strategic” and “far-sighted” and would better leverage the Postal Service’s unique and universal last-mile delivery network; expand the range of services it can offer; and give the Postal Service more flexibility in pricing its products.
NALC members, Rolando said, are well aware that the Postal Service must adapt to a changing American economy and society that have embraced the Internet and such tools as email and online shopping. For more than two centuries, the USPS has successfully adapted to technological changes, including the telephone, telegraph and fax machine, each time emerging stronger.
Adapting to the current changes, he said, “will require difficult sacrifices for all involved, including letter carriers and other Postal Service employees. Letter carriers are not afraid to make those changes. In fact, if it were part of a comprehensive plan to save this institution, we would be the first to step up.”
But Postal Service management and some in Congress seem to assume that the only possible way to cope with such changes as declining first-class mail volume and revenue is to reduce and degrade services, Rolando said.
“We have a postal management that, at the highest levels, has thrown in the towel,” Rolando said. That may sound harsh, but he noted that, just last week, the postmaster general said he supports practically all of H.R. 2309, by Rep. Darrell Issa, R-Calif., which is a bill that “would effectively dismantle the Postal Service” and “is a recipe for total disaster.”
The National Association of Letter Carriers has announced its opposition to a Senate bill, S. 1789, which also seeks to reduce Postal Service red ink by downsizing the postal network.
A sizeable share of what has been reported as red ink, Rolando said, was caused by something unrelated to the mail, a changing society or new technology: A 2006 congressional mandate that the Postal Service, within just 10 years, set aside enough money to pay future retiree health benefits costs for the next 75 years. That mandate — imposed on no other government agency or private business — already has cost the Postal Service more than $20 billion, accounting for the vast majority of the agency’s red ink.
In fact, in fiscal years 2007 through 2010, the Postal Service actually had a net operational profit delivering the mail of $611 million, despite the worst recession in 80 years, Rolando noted.
Rather than start slashing the Postal Service, or leaving it to current management to do so in an even more draconian fashion, Congress should allow time to draft a comprehensive reform plan that would adapt the Service to evolving American needs, Rolando said. For example, while more people are paying bills online, they also are ordering goods online – and those goods need to be delivered. A seven-percent rise in Internet shipping contributed to a $200 million net operational profit for the Postal Service during the most recent fiscal quarter – and a new business plan should focus on optimizing such opportunities.
Efficiencies also will likely be included in a new plan, but they need to be part of an overall business strategy that enables the Postal Service to offer new products and services, not simply steps toward dismantling the network, Rolando said. He noted that for 30 years the Postal Service hasn’t used a dime of taxpayer money, instead funding itself through the sale of stamps and services.
“Nothing is inevitable about the so-called decline of the U.S. Postal Service, and the National Association of Letter Carriers is prepared to lead the effort to revive and improve this vital national institution,” Rolando said.