May 17, 2011 – LEAGUE President Mark Strong testified before the Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security. Mark joined the Postmaster Pat Donahoe and five other panelists to give testimony on the financial condition of the post office as well as addressing Senator Carper’s bill as well as the Collins bill.
Included in Mark’s comments was testimony on the overfunding of the pension funds as well as the prefunding of the retiree health benefits being at the source of the Postal Services financial condition. During his oral testimony Mark told the Senate Committee that “no business of any type, in any part of the country, could afford to pay a 5 Billion dollar supplemental annual income tax that its competitors do not pay, and remain viable”.
Marks remarks also covered the issue of closing of small post offices. Small office closings are one of those cost savings measures that are popular to some mid-level postal officials because they can look good with the impression that they are driving large cost out of the system. He further mentioned that Post Offices and Postmasters..…are the glue the binds rural America together. Something some urbanites have a hard time understanding but it is the truth, not rhetoric and not exaggerated.
Executive Vice President
Closing of Small Post Offices
There appears to be renewed interest in some sectors in closing small rural post offices, an interest that is too often simplistically tied to the notion of closing excess facilities to drive excess capacity out of the system. This interest has arisen despite the fact that small rural post offices are the keystone of many rural communities, and the fact that closing post offices saves the Postal Service very little money. According to PRC data the total net cost of the 10,000 smallest Post Offices—more than one-third of all Post Offices in the United States—is less than seven tenths of one percent (0.7%) of the total cost of the United States Postal Service. The League just recently re-verified that data with the Commission’s staff.
Thus, closing post offices is not a cost savings measure of any serious import, no matter how anyone spins it. It is one of those ―cost saving‖ measures that is popular with senior postal managers who wish to ―look good‖ and give the impression that they are driving costs out of thesystem, without really doing so. In order to drive costs out of the system, one needs to focus on increasing efficiency in the administration of the system (less reports, more hands-on work) and on driving out any excess capacity in the processing and transportation network. The breadth and scope of the delivery network turns more on the number of delivery points in an area, rather than on the number of pieces delivered. The number of pieces delivered goes to the number of routes that exist, and our members have worked with their carriers in very productive ways throughout the recession, in order to consolidate and increase productivity in that area.
Closing post offices, like the closing of Borders Bookstores or Blockbuster outlets, can seem like a fast way to cut costs, but it carries significant hidden costs. First, unlike other stores, post offices are not just retail outlets; they are part of a nationwide receipt and delivery network. This receipt and delivery network depends upon the existence of these rural offices, and without them there will be gaps in coverage of delivery and postal services.
Small post offices should not be closed, and indeed cannot be closed without doing serious damage to rural America and the image of the federal government in those areas.
source: National League Of Postmasters