THE U.S. Postal Service is in obvious need of an overhaul. The agency is a poster boy for red ink.
The question is: What type of overhaul.
To its credit, the Postal Service announced a major change in February to do just that. The plan called for the termination of Saturday delivery starting in August. Exempt from that edict were packages.
The proposal would have resulted in significant savings, estimated at $2 billion. The agency lost nearly $16 billion last year – $11.1 billion of that due to a 2006 law Congress passed forcing it to pay into future retiree health benefits, something no other agency does.
But often times the best-laid plans never come to fruition. The Postal Service pulled the plug on the proposal Wednesday. It did so because it basically had no choice.
For the Saturday-cessation plan to take effect, Congressional approval was needed to end its longtime ban on five-day-only delivery. When Congress passed its spending legislation last month, such a provision was not included. Thus, the Postal Service’s proposal was jettisoned to purgatory.
The Postal Service is now back to square one on how to become a more fiscally responsible entity. Such massive losses cannot continue.
Options to make that happen appear limited. One would be to try and reduce labor costs. That is something union workers would have to approve, and chances of that happening are slim at best.
Another cost-saving approach would be raising mail prices. We believe postal customers have shouldered more than their fair share of the burden already. A price hike would only antagonize patrons, resulting in a drop in usage.
The Postal Service has done a masterful job of cleaning up its operations. Since 2006, it has reduced annual costs by approximately $15 billion, cut its workforce by 193,000 or 28 percent, and consolidated more than 200 mail processing locations.
The agency’s halting of Saturday delivery would have been another positive move in that direction.
The Postal Service receives no tax dollars for its day-to-day operations but is subject to Congressional control. That seems unfair, especially considering the current plight of the agency.
It makes sense to either have Congress subsidize the Postal Service, or allow it make its own decisions.