PRC report values one-day-per-week Postal Service delivery cut in billions
If it had implemented a five-day-per-week delivery schedule years ago, the US Postal Service would have saved more than $2 billion during the its 2008 fiscal year. For the 2007 fiscal year, the cut in service would have saved the organization more than $1.9 billion, according to the Postal Regulatory Commission's annual report for fiscal year 2009.
The report, released less than two months after the USPS disclosed that it suffered a $3.8 billion net loss for fiscal year 2009, also revealed that the total cost of its universal service obligations for FY 2008 was nearly $4.8 billion, while that number was $4.4 billion for the previous fiscal year.
Last November, John Potter, postmaster general and CEO of the US Postal Service, lobbied stakeholders to cut the number of delivery days from six per week to five.
Ruth Goldway, chairwoman of the PRC, said in the report that the group expects to review a possible change in delivery days per week in the coming year. Goldway added that she's also encouraged a national conversation on the future of mail and hardcopy communications in the US.
The value of the monopoly that the USPS holds for both letters and mailboxes was nearly $3 billion for FY 2008, and almost $3.5 billion for the 2007 fiscal year, according to the PRC report. That value represents how much the USPS would lose if the monopoly was eliminated.
The PRC is an independent agency that regulates the US Postal Service.
The recession is also partially to blame for the USPS' drop in revenues for since 2008. “With the collapse of the financial markets during 2008 and 2009, much of the First Class advertising mail from mortgage banks and credit cards disappeared,” the report reads. “As the recession took hold among the retail markets, Standard Mail volumes also began a steep decline.” First Class and Standard Mail, the two largest mail classes, accounted for $5.5 billion of the USPS' $6.8 billion FY 2009 total revenue decline, according to the PRC.
For FY 2009, the agency stood to lose considerably more money, but Congress passed legislation that allowed it to delay $4 billion in payments to a retirees' healthcare fund. The USPS is also in the process of determining how many post office branches to consolidate in an effort to save money.
Gerald McKiernan, USPS spokesman, said that top USPS officials read the report and take its findings under consideration.