Associated Mail & Parcel Centers Blog

The Senate Bill

The likelihood that the Congress will address the financial difficulties facing the U.S. Postal Service increased significantly as four key Senators who are leaders on postal issues joined behind a single piece of legislation. And, this group includes both Democrats (Lieberman and Carper) and Republicans (Collins and Brown).

Titled “The 21st Century Postal Service Act,”  it would provide substantial financial relief by rebating  more than $6 BILLION in pension over-payments – part of which is to be used as incentive money to cut the workforce by 100,000. Even better, it would restructure the statutory retiree health insurance pre-funding schedule saving the Postal Service almost $5 BILLION annually, authorize it to leave the Federal Employee Health program and negotiate its own health insurance program.  The Postmaster General believes this would lead to substantial savings. Finally, the bill would reform the Federal workers’ compensation program which experts also say would reduce USPS costs.

The bill also would prevent the Postal Service from eliminating Saturday delivery for at least two years, after which a Postal Regulatory Committee review would assess whether enough efficiency improvements have been made to justify the further need to cut costs by moving to five day per week delivery.

It includes language to encourage contract rates (NSAs), and would encourage the Postal Service to phase out door delivery in favor of centralized delivery (cluster boxes).

The bill includes a number of measures related to the USPS effort to reduce the size of its infrastructure through plant and post office closures and consolidations, but the red tape it appears to apply in the manner of required studies, hearings, and appeals could actually slow the ongoing network optimization effort.

Key Provisions for Mail & Parcel Centers

Limitations on Five-Day Delivery

The bill would prohibit the Postal Service from implementing its plan to eliminate Saturday delivery for at least two years. The implementation could only move forward if the following conditions are met: 1) the Postal Service identifies customers who may be affected disproportionately by five-day delivery and develops remedies; 2) the Postal Service makes full use of its authorities under current law and the new authorities and mandates included in this bill to increase revenue and reduce costs; and 3) after implementing all other savings options, the Postal Service determines that a five-day schedule is still necessary to achieve sustainability. Once that decision is made, and demonstrated through careful financial analysis, the Government Accountability Office (GAO) would review the Postal Service’s financial situation, projections, and the adequacy of the savings initiatives already implemented in order to determine whether the implementation of five-day delivery is financially necessary. The Postal Service would not be able to implement a five-day schedule unless the Postal Regulatory Commission (PRC) has found that the Comptroller General has made a determination that doing so is financially necessary.

Streamlining Delivery

Under current practices, postal customers who don’t rent post office boxes receive delivery in a number of ways: some receive mail at their door while others receive it in mail boxes at their curb or at centrally-located stations at the end of their block or in a residential building. The bill would authorize the Postal Service, where feasible, to deliver to curbside, sidewalk, or centralized mailboxes rather than to door delivery points no later than 2015. This change could save the Postal Service billions every year.

Retail service standards

The bill would require the Postal Service to develop service standards to guarantee customers a certain level of access to retail services, whether at a post office or an alternative to a post office. The Postal Service must develop the standard, in consultation with the PRC, based on factors such as geography, population, and the availability of transportation. Communities concerned that a proposed closure violates a standard could challenge the proposal before the PRC.

The State of Play

Congress is moving toward dealing with the postal situation. This bipartisan Senate bill, coupled with the Issa/Ross bill (H.R. 2309) which was recently approved by a House Committee, mean all of the key postal legislators have now weighed in and are pushing for action. But, there is a long way to go, and the leading House and Senate bills differ in significant and politically important ways. The Postal Service issued a release thanking the Senators for their work, and many in the mailing industry have applauded this latest action.

The Postal Service will stay solvent and in business, although the road will be a bit rocky for a while.