Current USPS Situation for Mailers

From time to time, we share other timely postal information from friends in the industry.

Below is an article from Brown Printing Company concerning the current situation with the USPS:

The rumors are rampant and some mailers are already formulating contingency plans if the U.S. Postal Service ceases operation. Let's stop and think about this.

First and foremost, the U.S. Postal Service is NOT shutting down anytime soon. Essentially, that was the message from the USPS Chief Financial Officer, Joe Corbett, to the members attending the quarterly Mailers Technical Advisory Committee (MTAC) meeting in Washington DC last month. But the news media continues to talk about the eventual demise of the organization. Here's an idea; let’s start to focus our attention on fixing the problem.

The Postal Service is facing a financial crisis and it all centers around the Postal Accountability and Enhancement Act (PAEA) of 2006. That law mandates the USPS prefund their retiree health benefits at the cost of $5.5 billion annually. Both the USPS and the Office of the Inspector General (OIG) have estimated that the USPS has "overpaid" into this fund by billions of dollars. The industry, including postage payees, mail service providers and multiple associations, are requesting that money be returned to the Postal Service.
 
The Postmaster General, Pat Donahue, has gone before Congress several times to ask them to change the law. In addition, he has asked for mail delivery to be reduced to 5-days by eliminating Saturday. There are also proposals to close some 3,500 post offices, a plan that will dramatically change the USPS processing network, and several bills that will enforce Postal Reform. All of these topics were discussed during a recent Congressional hearing entitled "U.S. Postal Service in Crisis: Proposals to Prevent a Postal Shutdown." You can view the entire hearing and watch for yourself the passion by industry and Congressional leaders to get the Postal Service back on the right track United States Senate Committee on Homeland Security and Government Affairs.

So, where does that leave us? The Postal Service is a quasi-governmental agency that no elected official wants to see fail. As a matter of fact, President Obama's Administration is planning to release a strategy addressing the Postal Service's fiscal crisis in conjunction with the deficit reduction package. The administration also wants Congress to delay USPS' retiree health payment by 90 days.

The Association for Postal Commerce (PostCom) pointed out the Postal Service's most recently filed financial statement had the following footnote: "Our status as a self-supporting entity within the federal government presents unique requirements and restrictions, but also potentially mitigates some of the financial risk that would otherwise be associated with a cash shortfall. Despite falling mail volume, we are still widely recognized as providing an essential service to the American economy and there are a wide variety of potential legislative remedies that could resolve the short-term liquidity concerns. Therefore, it is unlikely that, in the event of a cash shortfall, the federal government would cause or allow us to significantly curtail or cease operations. We continue to inform the Administration, Congress, the PRC, and other stakeholders of the immediate and longer term financial issues we face and the legislative changes that would help ensure the availability of sufficient liquidity on September 30, 2011, and beyond. However, there can be no assurance that the requested adjustments to the PSRHBF payment schedule, or any other legislative changes, will be made in time to impact 2011, or at all."

Once again, the Postal Service is here to stay for now. With that said, it's not going to be easy for users of the mail. The massive reductions in USPS staffing and other efforts to cut their costs will no doubt have an impact on the industry that employs some 7 million people and generates more than $1 trillion in sales and revenue each year. We must stand united and tell Congress to make the necessary changes for the future of the Postal Service and our livelihoods.

Don't miss out on our educational mailing webinars!
Log on to our webinar registration site to sign up.