The Postal Service’s decision to move to five-day-a-week delivery for first class mail means employees will see fewer overtime hours and another round of buyouts.
Postmaster General Patrick Donahoe said Wednesday the reduction in service would be the equivalent of 22,500 employees who would no longer be needed to process and deliver mail.
“Right now, the Postal Service, we run in excess of 10 percent overtime, almost 12 percent, and we’ve done this on purpose by not hiring and using attrition to take advantage of people leaving without having to resort to layoffs,” said Donahoe during a press briefing in Washington. “We think by eliminating overtime and by looking at some of the flexibilities we have with the part-time workforce, and potentially working with the unions on some buyouts, we’ll easily hit that.”
USPS already has cut its workforce by 306,000 people over the last 13 years, so Donahoe said they have been preparing for this eventual cut back in service.
Donahoe said these changes in overtime and part-time workers would mainly impact carriers, mail processors and handlers, as well as supervisors.
More people will leave the service
Overall, with these changes, Donahoe said he expects the attrition rate among postal employees to increase to as much as 42,000 people in 2013, up from about 27,000 to 30,000 in any given year. “Most of the projected $2 billion in cost savings will occur as a result of a more efficient network and a reduction in the size of our workforce,” Donahoe said. “We are projecting we will be able to reduce about 45-million work hours making these exchanges. The key areas of cost reduction, of course, will be Saturday mail delivery, Saturday mail processing and transportation.”
The $2 billion in savings is just a small percentage of the Postal Service’s $15.9 billion deficit. But Donahoe said the service can no longer afford six-day-a-week delivery.
Donahoe said USPS will develop an implementation plan by March and will begin five-day-a-week service starting the week of Aug. 5.
He said this gives the Postal Service, its mailer customers and citizens time to adjust and prepare.
Mail, such as letters and magazines, would be affected. Delivery of packages of all sizes would continue six days a week.
The plan accentuates one of the agency’s strong points — package delivery has increased by 14 percent since 2010, officials say, while the delivery of letters and other mail has plummeted. Email has decreased the mailing of paper letters, but online purchases have increased package shipping, forcing the Postal Service to adjust to customers’ new habits.
But change is not the biggest factor in the agency’s predicament, Congress is. The majority of the service’s red ink comes from a 2006 law forcing it to pay about $5.5 billion a year into future retiree health benefits, something no other agency does. Without that payment — $11.1 billion in a two-year installment last year — and related labor expenses, the mail agency sustained an operating loss of $2.4 billion for the past fiscal year, lower than the previous year.
Congress also has stymied the service’s efforts to close some post offices in small towns.
Lawmakers failed to pass postal reform legislation last year to give USPS some relief. The idea of moving to five-day-a-week delivery was one of several options in some of the bills.
Reaction is uneven
USPS received a mixed reaction from Congress on its new plan.
Reps. Gerry Connolly (D-Va.) and Sam Graves (R-Mo.) wrote a letter to Donahoe yesterday asking for the legal justification and all documents related to the decision. “As you are aware from our past conversations, I believe 6-day remains a critical strength and competitive advantage from USPS that will enable to it to grow business and bolster revenue in the long-run,” the congressmen wrote. “Logic dictates that when USPS and the administration repeatedly request Congress explicitly to provide USPS the authority to reduce mail service from 6-days to 5-days, it is a clear acknowledgement that absent congressional action, USPS lacks authority to do so.”
Other lawmakers were more positive about the proposal.
Rep. Blake Farenthold (R-Texas), chairman of the Oversight and Government Reform Subcommittee on the Federal Workforce, U.S. Postal Service and the Census, said “the move to end Saturday delivery is a step in the right direction. USPS has put forward a responsible plan that helps them regain their financial solvency.”
Rep. Darrell Issa (R-Calif.), chairman of the Oversight and Government Reform Committee, and Sen. Tom Coburn (R-Okla.), ranking member of the Homeland Security and Governmental Affairs Committee, also supported the decision to move mail delivery to five-days-a-week.
Issa and Coburn sent a letter to fellow lawmakers. In it they called the decision “common-sense” and “worthy of bipartisan support.”
But one key lawmaker didn’t throw his support behind USPS’ plan.
Sen. Tom Carper (D-Del.), the chairman of the Homeland Security and Governmental Affairs Committee, said he’s disappointed by the Postal Service’s announcement.
He continued the call for Congress “to reduce the number of service mandates it places on the Postal Service so that the Postmaster General and his team can more easily adjust operations to reflect the changing demand for the products and services they offer.”
Unions push back
USPS also received little support from its unions as well.
National Rural Letter Carriers’ Association President Jeanette Dwyer said the decision to move to five-days-a-week “is yet another death knell for the quality service provided by the U.S. Postal Service. For decades, the Postal Service has upheld a personal and professional standard of service, delivering to every household nationwide six days a week. To erode this service will undermine the Postal Service’s core mission and is completely unacceptable.”
The president of the National Association of Letter Carriers, Fredric Rolando, said the cutback is “a disastrous idea that would have a profoundly negative effect on the Postal Service and on millions of customers,” particularly businesses, rural communities, the elderly, the disabled and others who depend on Saturday delivery for commerce and communication.
He said the maneuver by Donahoe to make the change “flouts the will of Congress, as expressed annually over the past 30 years in legislation that mandates six-day delivery.”
Donahoe said he believes the Postal Service is on solid legal ground to make the decision, especially after March 27 when the current continuing resolution expires.
A USPS spokesman said the CR is important to this discussion because once it expires, Donahoe hopes lawmakers will not renew the language requiring six-day-a-week delivery, which is in the CR today.
“There’s plenty of time in there if there is some disagreement, we can get that resolved and encourage Congress to take any language out that stops us from moving to this five-day mail schedule,” he said. “Our customers have consistently said do the right things, don’t become a burden to taxpayers. Our customers have also told us they want packages on Saturdays and I think this solution is the right solution for our business and our customers.”
Donahoe said he has briefed some members of Congress on their plan, but wouldn’t offer any insight into their reactions.
He said it’s up to USPS to make the business case and ensure lawmakers understand the financial and business reasons USPS must move to five-days-a-week mail delivery.
“I would expect we would get a challenge from the unions,” Donahoe said. “You can never be sure nobody is ever going to sue you. This is America. You can sue and we will work it out. It’s our intention that we would be able to work with Congress if there is differences, move on and get this next CR cleared up so there are no differences. It’s the right thing to do.”