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Message delivered: Legislators must act now to reform U.S. Postal Service

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The forces overseeing the U.S. Postal Service have not kept pace with the technology impacting its usage.

Email has largely replaced snail mail, drastically reducing the amount of letters requiring in-person delivery. Personal notes, greeting cards, documents, contracts and spreadsheets can now be sent virtually anywhere in the world instantaneously at the push of a button on a keypad.

The USPS, however, has been slow to adjust to this development. Many people believe Saturday delivery should be discontinued, but those resistant to change have ensured that the system keeps the status quo.

A report released in July by the Congressional Research Service titled “The U.S. Postal Service’s Financial Condition: A Primer” documents the agency’s money woes.

“The USPS is experiencing significant financial challenges. After running modest profits from FY2003 through FY2006, the USPS lost $41.1 billion between FY2007 and FY2012. Since FY2011, the USPS has defaulted on $11.1 billion in payments to its Retiree Health Benefits Fund,” according to the report. “The agency has reached its $15 billion borrowing limit and is low on cash. In October 2012, the USPS bolstered its liquidity by withdrawing all of the cash from its competitive products fund. At the end of the first half of FY2013, the USPS’s financial condition showed no appreciable signs of improvement. The agency’s revenues and operating expenses were little changed relative to mid-FY2012.

“The USPS’s recent financial difficulties are partially the product of falling revenues,” the report continued. “The agency has experienced a 21.4 percent drop in mail volume during the past 10 years. Additionally, during the past decade, the ‘mail mix’ has shifted. A growing portion of the mail is advertising mail, which yields low profits. Concurrently, the annual volume of first-class letters, which are highly profitable, has been dropping steadily, at least in part due to mailers shifting to electronic communications. As a result, the Postal Service’s revenues in FY2012 were lower than they were in FY2003. Additionally, the Postal Service’s liquidity has decreased and its debt has increased because of the statutorily mandated payments that must be made to the RHBF each year.”

Postal Regulatory Commissioner Robert G. Taub delivered the keynote address Thursday during a luncheon at the Black River Valley Club in Watertown, an event hosted by the Central New York Postal Customer Council. Mr. Taub outlined some of the major problems facing the USPS.

“To emerge from financial uncertainty, the business model of the Postal Service will have to be completely reinvented to reflect the actual mail use of Americans, Mr. Taub said. In 2013, total mail volume delivered by the agency dropped to the lowest levels seen in nearly 27 years, a decline that has continued this year,” according to a story Friday in the Watertown Daily Times. “He attributed that decline to the economic recession that began in 2007, along with people increasingly using electronic media to communicate.”

“Statistics show the Postal Service’s financial standing is bleak,” the story reported. “The Postal Service ended 2013 with a net loss of almost $5 billion, Mr. Taub said. Its net loss from 2007 through 2013 was $37.8 billion. So far in 2014, its net loss is about $2.2 billion. It has reached its borrowing limit, and it expects mail volume to continue to decline.”

Congress has saddled the USPS with extraordinary pension and health care contributions. Mr. Taub warned that legislators may not act to reform the system until it has a financial meltdown, and we can’t afford that. Our officials must get to work now to find ways to reduce the USPS’s operating costs, and we need to light a fire under their feet to begin this process.

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