NALC: USPS Financial Plan for 2010 Retains Six-Day Delivery

Despite cutting 40,000 career employees, getting a $4 billion break on retiree health benefit payments, and taking other cost containment measures, the Postal Service reported a net loss of $3.8 billion for its 2009 fiscal year. The bleak report, issued November 16, showed $1 billion more red ink than a year earlier.

The report also cited total mail volume of 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a 12.7 percent decline. In making the announcement, the Service said its projections for FY 2010 are based on continuing six?day delivery.

“There is no way to sugarcoat it; it was a horrible year,” NALC President Fred Rolando said. “The housing collapse and meltdown on Wall Street hit the most mail?intensive sectors of the economy, and the deep recession that followed may have accelerated the drive by many mailers to seek electronic substitutes for mail.”

The Postal Service’s chief financial officer, Joseph Corbett, agreed: “Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service. The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs.” Corbett noted that the Service reduced work hours by 115 million, or the equivalent of 65,000 full?time employees. The Service reduced overtime and pared transportation costs and virtually every other expense.

Independent auditor Ernst & Young cautioned that “there is significant uncertainty” whether the Postal Service will have enough cash on hand to make all of its payments in the year ahead, including the $5.5 billion retiree health benefits payment due on the last day of FY 2010. That is the next installment due to pre?fund future retiree health insurance costs. The 2009 payment was reduced by $4 billion, thanks to passage of legislation vigorously endorsed by the NALC.

With further revenue losses and mail volume declines expected, Postmaster General John E. Potter said that USPS will continue to move aggressively to meet the challenges posed by the recession.

“We realize our customers are facing the same economic challenges,” Potter said, noting the Service will not raise prices for First?Class and Standard Mail and its other market?dominant products in 2010.

Looking ahead, the statement said, “The 2010 plan, which estimates a revenue decline of $2.2 billion, a net loss of $7.8 billion, cost reductions of more than $3.5 billion and a reduction in mail volume of 11billion pieces for the year, is based on the assumption that there will be no change in the number of delivery days per week, and no change in the current retiree health benefits payment schedule.”

Potter said, however, that the Postal Service faces “a sobering reality” of the same financial problems in 2010 and every year in the near future as volume contracts and the Postal Service struggles with the costs of an ever?expanding delivery network.

President Rolando said the Postal Service’s year?end report underscored the need to enact a long?term fix to the retiree pre?funding obligation.

“We appreciate the short?term relief provided by H.R. 22, but Congress must order the Office of Personnel Management to review the pre?funding provisions of the law to both more accurately measure the true cost of future benefits, which it now grossly exaggerated, and provide for a more reasonable and sustainable schedule for pre?funding,” he said.

Rolando expressed hope that the economy will begin to turn around in 2010, but cautioned letter carriers that a full recovery will take time: “We will have our work cut out for us in the years ahead to restore the Postal Service and protect our long?term job security. We will have to fight for legislative reforms and make the right decisions at the bargaining table.”

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8 thoughts on “NALC: USPS Financial Plan for 2010 Retains Six-Day Delivery

  1. This is the exact info that needs to be out there in the media and to those who are in congress that are trying to find the solution. The union needs to do more to detail the misuse and waste of theses salaries by management. In my office here in Ky. we have 4 offices that you can drive to within 15-20 minutes to each one depending on traffic. My question is, why can’t there be one PM for these 4 offices? In addition to these offices there are numerous offices in this rural area that have only 1 PM who works the mail and the window. Why aren’t these offices closed? How much money does the P.O. pay to the off site stores such as christian book stores, banks, and other non postal facilities in which a person can buy stamps, mail packages and other services? At the end of the day one of our clerks have to drive across town to pickup their mail that they collected bring it back to our office for dispatch. Lastly, our vehicle maintenance is as follows, the P.O. will send our trucks over 1 hour away to the main P.O. to have serviced. Most of the time they hire a contractor to haul our vehicles back and forth. Why????? It would be much cheaper to let a local garage here in town do the maintenance. Anyway, there is much much more abuse by our fearless leaders that needs to be revealed. There in could lie the problem!!!!!!??????

  2. Of the 40,000 “career” employees that left, how many were in management. We have an office here north of San José that has a Postmaster who supervises 1 clerk and has no door to door mail delivery. There’s another one to the osuth that has a postmaster with no employees nor mail delivery. The people have to pay for a post office box and pick up their own mail. Ridiculous!

  3. I totally agree that the Post Office is top heavy. I am a letter carrier with 23 years of service. Through my years I have worked with and trained letter carriers who left the letter carrier craft and became supervisors. Most left the letter carrier craft because they could not do our jobs. These people became supervisors not because of their performance as letter carriers, but because of their lack of productivity when they were letter carriers. These people are rewarded promotions and pay raises way above letter carriers because they could not do our job. These numbers grew throughout the years that gave us way to many managers making way too much money! Foe example we have 4 supervisors at our station. They manage a total of 28 employees, both letter carriers and clerks. Between them they total over $225,000 in salary. After the carries leave for the street these 4 supervisors are left to manage 3 clerks?!?! And we are one post office of many, that this happens in?? Just do the math, and it will lead you to the waste……

  4. Well said John Smith! The Postal Service is an archepelago of tiny islands otherwise known as “districts”. Some districts make sense having a lot of individual stations and hundreds, even thousands, of carriers. Some “districts” are two office or one office fiefdoms, with their own Postmaster and their staff. Ridiculous. The little fiefdoms, er “districts” must be consolidated into real, bona-fide districts. Management overhead is still too fat. The supervisors have too many reports they are made to file each day, the managers are paid $80+K per year but have to call downtown to get permission to use 1 hour penalty time. Ridiculous. “If you’re not touching the mail, you’re overhead”. I like that! The NALC has bent over backwards trying to save this ship. Management needs to step up. Let er RIFF!

  5. Sirs,
    Reorganization of the managerial/administrative structure should be the top priority for the USPS. The layering on of jobs that do duplicate and unneccessary work is causing the USPS to be exceedingly top heavy as the management to employee ratio of 8 to 1 illustrates. Former Postmaster General Marvin Runyan said ” the everyone that doesn’t touch the mail is overhead “. We need to follow that philosophy and reduce our extraneous paper pushing to be able to succeed.
    The basic job is collect the mail, sort the mail, redistribute the mail, and deliver the mail.I the USPS went back to that basic format and avoided the empire building style of the more employees I have under me the more important I am, we would be in much better financial shape for the future

  6. I figure Oprah clickin’ the lights off at her place & gettin’ ready to do the rounds with Sarah on the hand shakin’ tour next election ! What a pair ! !

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