March 29, 2010Eliminating Saturday mail delivery could save the U.S. Postal Service $5.1 billion annually by 2020, most of which would come from lower personnel costs, agency officials said on Monday.
In the face of declining mail volume and a 10-year, $238 billion budget deficit, the Postal Service is proposing to reduce mail delivery days from six to five. The move would eliminate the equivalent of 40,000 full-time positions, including 26,000 city letter carriers, according to USPS Vice President Sam Pulcrano. Most of the cuts would come during the first year after Saturday delivery ends, he said.
USPS on Tuesday will submit its five-day delivery plan to the Postal Regulatory Commission.
Postmaster General John Potter earlier this month outlined a 10-year strategy to cut costs and increase the agency's flexibility to change its products, services and business practices. In addition to the delivery day reduction, the plan included moderate price increases, partnerships with retail outlets and a pay-as-you-go system for retiree health benefits, which USPS currently prefunds at $5.6 billion annually.
Pulcrano said the largest category of cuts will comprise the 25,000 city carriers who cover the sixth delivery day to allow other employees a five-day workweek. According to the draft PRC proposal, the annual savings in terms of fiscal 2009 will be $2.2 billion.
"After that, it's much, much smaller, as far as the impact across the organization," he said. The plan also eliminates some rural carrier positions, along with supervisor hours and post office clerk staffing.
According to Pulcrano, about 45 percent of postal employees are eligible to retire between now and 2014, and some positions will be eliminated through attrition. USPS also has flexibility in its collective bargaining agreements with employee unions to let go a category of noncareer, short-term workers when automation procedures are in place. USPS will reschedule work hours, expand overtime and bring in part-time employees to ensure adequate staffing, he said.
Officials said the Postal Regulatory Commission will issue an advisory opinion, but USPS still must seek legislative change. The fiscal 2010 appropriations law prohibits the agency from reducing delivery days, but the language for fiscal 2011 eliminates that requirement. Once Congress gives its approval, the Postal Service and stakeholders need six months to change contracts, information technology systems and transportation networks, Pulcrano said.
"The sooner we can get some relief will have significant impact on where we end up in that 10-year plan," he added.
March 29, 2010