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Savings in delivery cut questioned

The decision whether to cut back U.S. mail delivery to five from six days a week was complicated Thursday by a report that suggested the U.S. Postal Service had overstated the savings to be gained by the change.

The U.S. Postal Regulatory Commission said it found only $1.7 billion in savings, compared with the Postal Service's estimate of $3.1 billion. The commission also warned that the Postal Service had underestimated by as much as $386 million annually the loss of revenue that could result from dropping Saturday delivery.

The Postal Service, which anticipates a $238 billion cumulative loss over the next decade, said last year it would pursue a five-day delivery schedule as soon as this year to cut costs. Congress currently mandates six-day delivery and would have to approve any changes.

The commission, which approves postal rates and operates independently of the Postal Service, made no recommendations about dropping a delivery day. Its members were evenly split over the proposal, said Ruth Goldway, the commission chairwoman, who supports maintaining a six-day service schedule.

She also warned that the Postal Service plan does nothing to address what she believes is an inequitable effect on delivery to rural and remote areas.

The commission held two field hearings in South Dakota and Wyoming, and asked senators from Alaska and Hawaii to weigh in on the delivery change.

Sen. Lisa Murkowski, R-Alaska, who testified before the commission in September, said she was relieved it took into account some of her concerns.

"I am pleased that the commissioners have taken seriously the negative impact the proposal could have on Americans who live in rural and remote areas of the nation, including Alaska," she said Thursday. "I anticipate that the Senate will take their findings and recommendations just as seriously."

The Postal Service doesn't receive taxpayer funding, so cuts don't have an effect on the federal deficit or the national debt. But it anticipates losing$7 billion this fiscal year. Of that loss, about $5.4 billion is money the Postal Service must pay into a fund to cover health care expenses for future retirees.

Postmaster General Patrick Donahoe said the Postal Service will not only continue to stick by its proposal for a five-day plan, but also will push for Congress to approve it.

Since announcing the proposal, the Postal Service has argued that profound technological and social changes have changed the way Americans communicate, and as a result, it needs to rethink its delivery schedule in the digital age.

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