NALC: A bipartisan majority in the House backs six-day mail delivery
From the National Association of Letter Carriers:
A bipartisan majority in the House backs six-day mail delivery: The NALC has learned that 218 House members from both parties—a majority—have now signed on as co-sponsors of H.Res. 137, the measure introduced by Rep. Sam Graves (R-MO) that expresses the sense of the House that the USPS should take “all appropriate measures” to ensure continuation of six-day delivery. “Our members’ hard work continues to pay off,” NALC President Fredric Rolando said. “This level of support will shore up our defense against the attempts by Congressman Darrell Issa and others to ‘save’ the Postal Service by cutting service—a counterproductive proposal that would surely fail if implemented.” Click here to find out whether your representative is among this majority, and if he or she is not, click here to find out how you can ask your House member to become a co-sponsor of H. Res. 137.
USPS Challenges PRC Five-Day Analysis – Stands by $3.1 Billion Savings Estimate
WASHINGTON — In a report issued today and delivered to Congress, the U.S. Postal Service asserted that the Postal Regulatory Commission (PRC) based a recent advisory opinion on a questionable analysis of the potential cost savings that could be achieved by implementing a five-day delivery schedule to street addresses.
The Postal Service has estimated that making the move would yield a net annual cost reduction of $3.1 billion based on extensive market research and financial estimates provided to the PRC March 30, 2010. The PRC issued a nonbinding advisory opinion March 24, 2011 that concluded that transitioning from a six-day delivery schedule to a five-day street delivery schedule would only achieve $1.7 billion in net annual savings. Read more
PRC Chair: No Five-Day Postal Delivery Anytime Soon
“Five-day mail delivery, if it ever happens, is a few years down the road, according to the chairman of the Postal Regulatory Commission.
PRC Chairman Ruth Goldway commented on five-day delivery as a guest on an April 11 podcast with Gene Del Polito, the president of the Association for Postal Commerce.
“It’s not likely Congress would act to remove the six-day requirement in 2011 or 2012,” Goldway told Del Polito. “It’s possible farther down the road.”
Admitting that she is no expert when it comes to Congress, Goldway said it appears that outside of Sen. Thomas Carper (D-DE), there isn’t strong support for five-day delivery on the Senate side. The House side also seems to favor six-day delivery, she said.”
Full story via MultiChannel Merchant
PMG Comments On GAO Report on Five-Day Mail Delivery Readiness
Filed under: delivery, GAO, postal, postal news, press releases, usps
The Government Accountability Office (GAO) has produced a thorough and comprehensive review of the Postal Service proposal to move to a five day per week delivery schedule. We are pleased to see they agree that the Postal Service is likely to achieve significant cost savings if this change were to be effected and that much of its success depends on how efficiently it is implemented. We agree and believe that having completed a lengthy planning process; we are prepared to make that happen.
We are aware of the concerns certain stakeholders have expressed to GAO. We consulted extensively with our customers as we developed our operating plans. They can be assured that any decision to go to a five-day schedule will carefully balance our universal service responsibility and our statutory duty to operate in an efficient manner in light of prevailing volume, cost and revenue trends. Consideration of such matters will help ensure the financial stability of the Postal Service well into the future.
source: USPS
GAO: Ending Saturday Delivery Would Reduce Costs, but Comprehensive Restructuring Is Also Needed
The United States Government Accountability Office issued the following report today:
USPS’s proposal to move to 5-day delivery by ending Saturday delivery would likely result in substantial savings; however, the extent to which it would achieve these savings depends on how effectively this proposal is implemented. USPS’s $3.1 billion net cost-savings estimate is primarily based on eliminating city- and rural-carrier work hours and costs through attrition, involuntary separations, or other strategies. USPS also estimated that 5-day delivery would result in minimal mail volume decline. However, stakeholders have raised a variety of concerns about USPS’s estimates, including,
First, USPS’s cost-savings estimate assumed that most of the Saturday workload transferred to weekdays would be absorbed through more efficient delivery operations. If certain city-carrier workload would not be absorbed, USPS estimated that up to $500 million in annual savings would not be realized.
Second, USPS may have understated the size of the potential mail volume loss due to questions about the methodology USPS used to develop its estimates of how 5-day delivery may affect mail volumes.
The extent to which USPS can achieve cost savings and mitigate volume and revenue loss depends on how well and how quickly it can realign its operations, workforce, and networks; maintain service quality; and communicate with stakeholders. USPS has spent considerable time and resources developing plans to facilitate this transition. Nevertheless, risks and uncertainties remain, such as how quickly it can realign its workforce through attrition; how effectively it can modify certain finance systems that cannot be changed until congressional approval for 5-day delivery is granted; and how mailers will respond to this change in service. Further, uncertainties remain as factors other than delivery frequency—e.g., price increases—can also affect mail volumes and revenues.
USPS’s proposal involves several factors that need to be considered. It would improve USPS’s financial condition by reducing costs, increasing efficiency, and better aligning its delivery operations with reduced mail volumes. However, it would also reduce service; put mail volumes and revenues at risk; eliminate jobs; and, by itself, be insufficient to solve USPS’s financial challenges. USPS’s role in providing universal postal services can affect all American households and businesses, so fundamental changes involve key public policy decisions for Congress. If Congress decides 5-day delivery is necessary, then Congress and USPS could factor the savings into deliberations about what package of actions should be taken to restore USPS’s financial viability. Conversely, if Congress maintains the mandate for 6-day delivery, Congress and USPS would need to find other ways to achieve equivalent financial savings, so that the package is sufficient to restore USPS’s financial viability. This would likely entail difficult decisions with broad implications for USPS’s infrastructure, workforce, and service. As GAO has reported, a package of actions by Congress and USPS is urgently needed to modernize USPS’s operations, networks, and workforce.
GAO: Ending Saturday Delivery Would Reduce Costs
Senator Carper Reacts to PRC Opinion on Five-Day Delivery
WASHINGTON – Sen. Tom Carper (D-Del.), Chairman of the Senate Subcommittee that oversees the Postal Service, released the following statement reacting to the advisory opinion on Postal Service delivery frequency released earlier today by the Postal Regulatory Commission:
“While I have serious concerns about the length of time it took the Postal Regulatory Commission to produce this advisory opinion, I welcome the commissioners’ views on this proposal from the Postal Service and look forward to studying their findings more closely.
“While I’m not an advocate for eliminating Saturday delivery, and I continue to question whether taking such a step would be a good move at this time, I do believe that decisions on operational matters such as delivery frequency should be handled by postal management. At a time when the Postal Service is struggling with record budget deficits and facing insolvency, it makes no sense, in my opinion, to tie their hands when it comes to making difficult operational decisions. A significant amount of money could be saved if Saturday delivery is eliminated. I hope it isn’t necessary, but taking this step at the right time, and in the right way, might very well be a necessary component of a comprehensive postal recovery plan. It would be irresponsible for Congress, as it does now, to stand in the way and act like a 535-member Board of Directors. No real business could ever function under that type of governance and it’s unrealistic to think that the Postal Service would be well served by that type of micromanagement.
“That’s why last year I introduced a comprehensive postal reform bill – the Postal Operations Sustainment and Transformation (POST) Act – which would fix the Postal Service’s broken retiree benefits system, streamline operations, and allow it to offer additional products and services that could bring in additional revenue. It requires all parties – postal management, employees and customers – to make sacrifices. It also gets Congress out of the way by providing the flexibility and tools necessary to address the problems plaguing the Postal Service in an effective way. While the Senate wasn’t able to pass this much needed legislation in the 111th Congress, I plan to reintroduce the bill in the coming weeks.”
Senator Collins Issues Statement On PRC’s Five-Day Delivery Advisory Opinion
Washington, DC – The Postal Regulatory Commission today released an Advisory Opinion on the U.S. Postal Service five-day delivery plan. The Postal Service must obtain a Commission Advisory Opinion on any change in nationwide service it proposes. The Opinion found annual net savings to be an estimate is $1.7 billion versus the Postal Service’s savings estimate of $3.1 billion among other discrepancies
Senator Susan Collins, the Ranking Member of Senate Committee that oversees the Postal Service, issued the following statement.
“The PRC found that the Postal Service’s estimate of savings was inflated and points out that ending Saturday delivery would delay approximately a quarter of first class and priority mail. While cutting service would save the Postal Service money, it would also drive down the mail volume that is critical to maintaining its solvency.
“Moreover, the PRC exposes the Postal Service’s failure to even consider the likely harm to rural postal customers. Echoing my warnings, PRC Chairman Ruth Goldway acknowledged in her addendum to the Opinion that five-day delivery would ‘unfairly discriminate’ against rural postal customers. The Advisory Opinion raises many of the same questions that I have posed over and over. These consequences simply must be addressed before consideration of such a significant service reduction.”
In February, Senator Collins introduced legislation to help the Postal Service regain its financial footing as it adapts to the era of increasingly digital communications. The “U.S. Postal Service Improvements Act of 2011” would help the USPS achieve financial stability and future cost savings without undermining customer service.
NALC: PRC Refuses to Endorse Five-Day Delivery Plan
Commission’s findings bolster the NALC campaign to save Saturday service
March 24, 2011 — The Postal Regulatory Commission, an independent federal agency charged with overseeing USPS operations, issued an opinion today sharply critical of key aspects of the Postal Service’s proposal to eliminate Saturday delivery. The Commission embraced many of the criticisms of the plan expressed by the NALC in our year-long campaign to preserve six-day delivery and 25,000 letter carrier jobs.
“Thanks to the hard work of thousands of letter carriers who rang the alarm bell on the potential loss of Saturday delivery for citizens and small businesses all over America, and thanks to our hard-working staff and team of attorneys, Congress now has all the evidence it needs to conclude that ‘5-day is indeed the wrong way,’” NALC President Fredric V. Rolando said.
The three Republicans and two Democrats on the Commission agreed that the Postal Service overstated by $1.4 billion how much it would save each year by delivering mail only five days per week. In particular, the Commissioners found that USPS grossly overestimated — by more than three-quarters of a billion dollars — the savings it would achieve from its letter carrier workforce.
The bipartisan Commission also concluded that USPS underestimated — by hundreds of millions of dollars — how much revenue it would lose when customers, faced with no Saturday postal delivery, look to alternatives to get their messages and packages delivered.
The Commission’s independent analysis determined further that ending Saturday service would delay the delivery of 25 percent of all First-Class Mail and Priority Mail — almost all of it by two days.
Federal law requires the Postal Service to ask for an advisory opinion from the Postal Regulatory Commission whenever it seeks to make a nationwide change in its operations. The PRC’s opinion on USPS’s five-day plan is purely advisory; only Congress has the authority to permit USPS to drop Saturday delivery.
USPS filed its request for an opinion from the Commission last year, in March 2010. The PRC proceeded to conduct extensive hearings on the Postal Service’s plan over the course of several months, both in Washington and in locations around the country, soliciting the views of economists and other experts, as well as those of mailers, small-business owners, community newspaper publishers, business executives, local government officials and ordinary citizens.
NALC participated actively in all the proceedings. President Rolando testified forcefully against USPS’s plan at the Washington hearings, while other letter carriers expressed their opposition at the field hearings. NALC also enlisted the help of a pair of leading postal economists from Rutgers University and the University of Pennsylvania to explain to the Commission the faulty assumptions in the Postal Service’s plan.
All five Commissioners endorsed one joint opinion that pointed out major flaws in USPS’s projections, but this joint opinion expressed no ultimate view on whether Saturday delivery should be eliminated. Four of the Commissioners wrote their own separate opinions.
In her separate opinion, PRC Chair Ruth Goldway (D) announced her view that “eliminating Saturday delivery does not conform to the Nation’s postal policy.” She explained that with five-day delivery, Americans would pay the same postage but receive a lower level of service. She also noted that this reduction in service would be “particularly felt in remote and rural areas.”
Commissioner Nanci Langley (D) wrote that cutting Saturday delivery would diminish USPS’s “competitive advantage in the package delivery sector” and “forfeit the significant competitive advantage” that USPS now enjoys with six-day delivery. Even Commissioner Blair (R), while otherwise supportive of USPS’s plan, noted that it would “unduly impact” those mail users who are dependent on Saturday delivery, including community newspapers, customers who receive pharmaceuticals by mail and those in remote areas. He concluded that the burden is on USPS to show that a reduction in delivery days will “help, not hurt, its future financial viability.”
NALC argued in the hearings before the Commission that USPS grossly overestimated the savings it would achieve by going to five-day delivery. The Commissioners in their joint opinion agreed, noting that even with recent declines in mail volume, city carrier routes are generally at capacity and that overtime hours have recently risen. Squeezing the same amount of mail delivery into fewer days will mean USPS will have to create more routes, to keep within the 8-hour standard, increasing labor costs.
The Commissioners rejected USPS’s notion that it could “absorb” the mountains of mail that would accumulate on Mondays without any significant increase in letter carrier hours. They explained that office time would rise since carriers would have to spend more time sorting the mail. They also explained that there would be an increase in street time: “There are limits on how much mail can go in a carrier’s satchel, and how much mail can be relayed at any one time … Volume directly affects how much time a carrier spends fingering mail on the street, sorting it into cluster boxes, or sorting mail into banks of apartment mailboxes.” The resulting increased work hours, the Commissioners concluded, would eat into the savings USPS projects from its five-day proposal.
The Commission also criticized the Postal Service’s conclusion, based on a survey it conducted of mail customers, that its revenue loss from cutting Saturday delivery would be minimal. NALC argued at the hearing that USPS put its thumb on the scale by asking survey respondents to give their best estimate of how much less they would use the Postal Service if Saturday delivery were cut, and then reducing the answers it received by a so-called “likelihood” factor. The Commission took USPS to task for such statistical game-playing.
Although the Commission’s opinion is not binding, and although the Commissioners reached no unanimity on whether to give USPS’s plan the thumbs up or thumbs down, its findings that USPS’s projections are seriously flawed will help Congress and the general public understand what a serious mistake it would be to eliminate Saturday delivery.
PRC Issues Advisory Opinion On Ending Saturday Delivery
Washington, DC – The Postal Regulatory Commission today issued its Advisory Opinion in Docket N2010-1 on a Postal Service plan to end Saturday mail delivery, collection, and outbound mail processing.
The Postal Service is required to ask the Commission for an Advisory Opinion on any change in nationwide service it proposes. The Postal Service advised the Commission that due to falling mail volumes and revenues it is considering eliminating Saturday mail collection and delivery except for Express Mail and existing post office box service.
“Some of the Commission’s analysis in today’s Advisory Opinion suggests that even lower estimates of savings and higher volume losses are possible. In all cases, we chose the cautious, conservative path. Our estimates, therefore, should be seen as the most likely, middle ground analysis of what could happen under a five-day scenario,” said Chairman Ruth Y. Goldway.
Key findings of the Commission’s Opinion include:
*The Commission’s annual net savings estimate is $1.7 billion.
- The Postal Service’s savings estimate is $3.1 billion.
* Full savings in either case would likely not be achieved until year three after implementation.
* The Commission’s estimate of net revenue losses due to volume declines caused by the service cuts is $0.6 billion.
* The Postal Service estimate of net revenue losses is $0.2 billion.
* The planned changes would cause an average of 25 percent of First-Class and Priority mail to be delayed by two days. The Postal Service did not evaluate the impact of the proposal on customers who reside or conduct business in rural, remote, and non-contiguous areas.
*Customers in rural, remote, and non-contiguous areas can be particularly affected by the Postal Service’s plans. The Commission received significant input from rural America and traveled to South Dakota and Wyoming to meet directly with rural customers and community leaders.
The following chart provides a comparison of Commission and Postal Service analyses of cost savings and revenue losses that would result from implementing the proposed service reductions. The Net Savings totals would likely not be achieved until three years after implementation.
Financial Impact of Postal Service Plan (millions)
5-day delivery costs
The elimination of one mail delivery day has been proposed many times and was the subject of extensive congressional review in 1977 and 1980. In 1983, Congress adopted specific language requiring the Postal Service to maintain six-day delivery. The Commission’s Advisory Opinion will be considered by Congress as it reviews the Postal Service’s request to change the law.
The Commission held extensive public, on-the-record hearings to analyze and cross-examine the Postal Service’s proposal and supporting evidence. Mail users, postal employees, elected officials, community leaders and members of the public provided supporting and opposing views, both informally and as part of more formal, technical presentations. The Commission also conducted seven field hearings and received thousands of public comments through its website.
“All five Commissioners have signed the necessary certification for this Advisory Opinion,” Goldway said; adding “the Postal Service remains a vital, beloved and important institution facilitating economic growth, aiding small businesses, enhancing communications and unifying the nation. A decision to change the existing patterns of postal communications and delivery should be made with care.”
PRC Letter To Members Of Congress
The Separate Views of Chairman Goldway, Commissioners Blair, Langley, and Hammond are attached
PRC Issues Advisory Opinion On Ending Saturday Delivery
Goldway: PRC To Issue Ruling On Ending Saturday Delivery By End Of Year
The arrival of the holiday season brings with it thoughts of reflection, celebration and special times spent with family and friends. Traditionally, the end of the year also brings with it an increase in commerce and mailing activity. We are hopeful that will be true again this year as the economy and the Postal Service begin to recover from recession.
For the Commission, the coming months promise to be both busy and noteworthy. By year’s end, we expect to issue our Advisory Opinion in Docket N2010-1 evaluating the Postal Service’s proposal to eliminate Saturday mail service to homes and businesses nationwide. The Commission plans to conclude its public inquiry and issue its findings in Docket PI2010-1, on the emergency suspension of post offices.
The joint Commission-Postal Service Periodical Study is near completion and the findings, which are critical to resolving periodical cost coverage and pricing issues, will be posted on our website. The Commission hopes to issue its decision in the complaint of GameFly, Inc. against the Postal Service, in the near future. This would be the first Commission decision under its complaint authority established by the Postal Accountability and Enhancement Act (PAEA).
On November 2nd, the Commission opened Docket CP2011-26 to review the Postal Service’s request for a general increase in competitive product postage rates. We will solicit public input and issue our decision by December 2nd. The Commission also will seek input on new rulemaking proceedings, issue its third annual report under the PAEA, and begin the Annual Compliance Determination (ACD) process to assess Postal Service performance for fiscal year 2010 (FY2010). The ACD review is critical to Commission oversight and postal transparency. The Commission also has 14 pending dockets to complete from FY 2010, having completed a record 183 dockets in the past year.
Like the proverbial elves in Santa’s toyshop, the Commission has much to do to finish the year and we are responsible for many deliverables. You can be sure that we will stay focused and productive, and we will deliver.
Thank you for your support during the past year and in the future. Best wishes for the holidays and the year ahead.
Ruth Y. Goldway
Chairman