Potter: USPS Needs Sweeping Changes

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Everything from six-day-a-week mail delivery to employee benefits must be up for discussion in implementing postal reform, postmaster general John E. Potter told the Presidential Commission on the U.S. Postal Service yesterday.


In the short term, Potter said, the USPS needs room to implement infrastructure changes, including the number and location of post offices and processing plants, and changes in transportation networks.


"From a practical perspective, I believe we should have the flexibility to adjust our existing retail outlets to better serve communities and build our revenue base," he said. "That simply makes good business sense."


If these changes still do not ensure a self-sufficient mail system, Potter said, there are a limited number of options, including reducing the six-day-per-week delivery schedule.


"Personally, I believe there will come a time when demand will allow for relaxation of the six-day requirement," he said.


In the long term, Potter said, labor issues must be revamped. He said the agency recommended creating a negotiation process that includes not only wages and work rules, but also puts health, leave, retirement and other benefits on the table.


"Right now, for example, employees who work for the postal service for as little as five years and who retire having been in the Federal Employee Health Benefit program for that time, get 70 percent of their health benefit premiums paid for life -- the same as a 30-year career employee," Potter said. "That doesn't make sense to me."


He also said the USPS suggests that the collective bargaining process be streamlined via a mediation-arbitration process.


"Despite our best efforts, the sobering reality is that we need to act now to ensure that there is sufficient flexibility in the business model to address major changes on the horizon," he said. "Today is the right time to make change, when we can do it with clear heads and when we are not motivated by crisis."


Another challenge is the continuing decline of First-Class mail volume. Potter said that the agency faces two straight years of significant decline in First-Class volume for the first time in its history. First-Class mail is the primary source of postal service revenue, providing two-thirds of the funds to finance growing institutional costs.


Pricing flexibility is another priority. Potter suggested that the postal service's break-even mandate be put aside.


"Instead, the postal service should be allowed to retain earnings from year to year," he said. "In a businesslike manner, retained earnings could be used to bridge economic slowdowns and to invest in new technologies and infrastructure."


Potter's testimony concluded a series of seven meetings that the commission has held around the country this year. The commission will submit its report to President Bush by July 31. Congress may use the report in considering any postal reform legislation.


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