USPS, unions still negotiating over pay and benefits

Postmaster General Patrick Donahoe said Monday that he is optimistic the U.S. Postal Service and two of its unions will reach an agreement on new contracts.

Contracts with the National Association of Letter Carriers and the National Postal Mail Handlers Union expired at midnight Nov. 20, but labor and management decided to extend the negotiation deadline until midnight Dec. 7. NALC represents more than 195,000 employees who work as letter carriers delivering mail primarily in urban areas. NPMHU represents more than 45,000 employees who work in mail processing plants and post offices. In 2010, wages and benefits for employees represented by NALC and NPMHU exceeded $15.7 billion and $3.5 billion, respectively.

The agency successfully negotiated a contract with the American Postal Workers Union AFL-CIO that expires May 20, 2015. Employees represented by the APWU work as clerks, mechanics, vehicle drivers, custodians and in some administrative positions.

USPS and the National Rural Letter Carriers' Association failed to agree on a new contract in November 2010, and are following the current agreement until a third party determines the outcome of a new contract. Employees represented by NRLCA deliver mail in primarily rural and suburban areas.

If the Postal Service NALC and NPMHU come to an impasse over new contracts, then a third-party arbitrator will render a decision. Postal employees are not allowed to strike because Congress has designated USPS an essential service to the country.

On Monday at the National Press Club, Donahoe discussed the Postal Service's efforts to solve its huge financial problems, including eliminating jobs, closing post offices and seeking legislative relief from Congress. The agency, which lost $5.1 billion in fiscal 2011, received another deferral last week from Congress on a $5.5 billion payment to prefund retirees' health benefits. USPS has until Dec. 16 to pay that tab, originally due at the end of September.

Donahoe said the Postal Service has to cut about $20 billion in costs by 2015 to return to profitability. Although 80 percent of the agency's costs are related to labor expenses, continuing declines in mail volume also have contributed significantly to its fiscal woes. Total 2011 mail volume fell by 3 million pieces, or 1.7 percent, from 2010. Income from first-class mail, the Postal Service's most profitable product, decreased by $2 billion from 2010 to 2011.

The postmaster general was interrupted during his speech for several minutes by protesters at the Press Club on Monday. Responding to chants of "Hey, hey ho, ho, Donahoe has got to go," Donahoe said the good news was at least people now are paying attention to what's happening at the Postal Service.