USPS At Crossroads
Change is inevitable for the U.S. Postal Service, which experienced a “devastating” fiscal 2009, according to Postmaster General John E. Potter. Change was the central theme of Potter’s address at the National Press Club on Oct. 8.
I’d hate to hear how Potter would’ve termed FY 2009 had Congress failed to approve stop-gap financial relief to the USPS.
Potter didn’t mince words in his speech at the National Press Club. “We’re facing cost requirements that just can’t be squared with the realities of the business,” he said. “We’re at a crossroads. The status quo just won’t do any more. We have to change. We have to make some important public policy decisions about the future of the Postal Service. The consequences of inaction are just too great.”
Strong words, indeed. But now, 2010 beckons and the USPS still finds itself in a financial mess, thanks to its biting annual pre-payments for retiree health benefits, coupled with a massive decline in mail volume. For the record, mail volume declined by 28 billion pieces in FY09.
Potter praised the work of postal management for cutting $6 billion in expenses. But the prevailing problem remains: “The problem grows out of a three-year-old law that added more than $5 billion to our annual costs for prefunding retiree health benefits,” Potter said, referring to Postal Reform legislation enacted in 2006. “I was nervous about it, because I knew we just couldn’t afford to pay that bill when it came due last week. Our mailers were nervous, too. They were concerned we’d have to pull back on service to make ends meet - and that would have negatively affected their businesses.”
Last week, President Obama signed legislation that changed the Postal Service’s 2009 Retiree Health Benefit Trust Fund pre-funding payment from $5.4 billion to $1.4 billion. “While this is a welcome move that enabled us to meet all our obligations in 2009,” Potter said, “there is more work to be done to secure our future. We’ve dealt with the “crisis of the day.” Now we have to get focused on the long-term changes needed for the Postal Service to remain a national asset.”
The USPS survived FY09, financially speaking, but remains in a deep pit of quicksand, hoping and praying that 2010 brings more significant and permanent change.
October 15th, 2009 at 5:24 pm
Jim — I think today’s USPS announcement that there will be zero increase for postage in 2010 indicates that postal officials are paying attention to customer needs and market realities. Do you think this announcement bodes will for the USPS?