Potter: USPS May File Rate Case for Negotiated Service Agreements This Summer

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WASHINGTON -- The U.S. Postal Service may file a specialized rate case for negotiated service agreements by summer, postmaster general John E. Potter told attendees at the 2002 Annual Government Affairs Conference here yesterday.

"I hope we can do that by June or July," Potter said.

Negotiated service agreements, or NSAs, are special service and rate arrangements negotiated between the USPS and a mailer or group of mailers. NSAs could provide variable pricing that would encourage greater volume and reward the postal service's major customers with discounts and premium services.

At the luncheon meeting Potter also discussed the agency's transformation plan, which was presented to Congress and the Bush administration last month. The plan, which was written by postal employees, outlines regulatory and legislative changes it says it needs to get back on track. Part of the plan discusses moving ahead with NSAs. He said the transformation plan could generate an additional $5 billion through 2006.

Potter also brought up some of the challenges the USPS is facing. The agency is nearly $90 billion in debt, and the bulk of that is from the agency's pensions system, which the USPS is obligated to.

Another problem is that the postal service's mail volume "has really tanked," he said. " [We have not had] more mail volume lost since the Great Depression."

The biggest threat: e-mail.

As a result, Potter said the USPS is doing "everything we can to pull back on costs. And we don't go out and run around bragging about what we do, because if we do, all we'll do is tick somebody off. So, the facts are that we have very quietly done lot of things in the last couple of years. We have eliminated 33,000 career jobs and we have eliminated some 48 million work hours."

In terms of the transformation plan, Potter explained how the plan supports having the agency become a commercial government enterprise, which would allow integrating the postal system into the modern economy while preserving its ability to fulfill its mission of universal service.

When asked if he could only have one immediate legislative change and what it would be, Potter said, "Pricing flexibility."

Meanwhile, on the legislative front, insiders said the House Committee on Government Reform may have a postal legislative reform proposal set for committee markup May 21.

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