Delaying rate case costs USPS $450 million each month, speaker says

Share this content:

WASHINGTON - It costs the U.S. Postal Service $450 million for each month that the rate case is delayed beyond the projected implementation date, said H. Glen Walker, chief financial officer and executive vice president of the USPS.

Mr. Walker made the statement at a presentation Nov. 1 about the agency's 2007 integrated financial plan made public at the quarterly Mailers' Technical Advisory Committee meeting at postal headquarters.

While the Board of Governors of the USPS makes the final decision, Postmaster general John E. Potter told USPS business customers earlier this year that the agency must prepare for a possible May 6 rate change date.

Mr. Walker discussed the costs while discussing the fact that there is a potential for more risk and uncertainty in the achievement of the agency's fiscal year 2007 plan compared to recent years.

As Mr. Walker had discussed at the USPS' board meting in September, the plan includes cost reduction programs totaling $1.1 billion, including a planned decrease of 40 million work hours from the estimated fiscal year 2006 level. Savings will come from automation improvements and implementation of additional "breakthrough productivity" initiatives.

The postal service's 2007 fiscal year begins Oct. 1, 2006 and ends Sept. 30, 2007. Besides the rate recommendation from the Postal Rate Commission and its implementation, Mr. Walker said other risks and uncertainties this year include the economy, inflation, aggressive work hour reductions, and the outcome of postal legislation.

"A big uncertainty is how the agency will come out on its labor negotiations," Mr. Walker said.

In August the agency began contract negotiations with its four largest unions. Current contracts with the National Association of Letter Carriers, AFL-CIO, American Postal Workers Union, AFL-CIO, National Rural Letter Carriers' Association and National Postal Mail Handlers Union expire at midnight Nov. 20.

This is the first time the agency has separately negotiated new contracts with all these unions at the same time.

Loading links....

Next Article in Direct Mail

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

DMN's Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here