* USPS has more facilities, staff, equipment than needs-GAO
* Mail volumes down, automation improves efficiency-GAO
* GAO says “urgent need” for Congress to reform USPS
By Emily Stephenson
April 12 (Reuters) – The U.S. Postal Service has more mail
processing facilities, staff and equipment than it needs as mail
volumes drop, a government watchdog said in a report calling on
Congress to pass legislation that helps the agency address its
dire financial situation.
“It is now abundantly clear that the postal business model
must be fixed given the dramatic and estimated decline in
volume, particularly for First-Class Mail,” the Government
Accountability Office said in the report published on Thursday.
“If Congress prefers to retain the current delivery service
standards and associated network, decisions will be needed about
how USPS’s costs for providing these services will be paid.”
The Postal Service, which does not receive taxpayer money to
fund its operations, has grappled with plummeting mail volumes
as consumers increasingly send email and pay bills online. High
costs, including an annual payment to prefund retiree health
benefits, have weighed heavily.
The agency lost $5.1 billion in fiscal year 2011, and
officials say they need to cut annual costs by $20 billion by
2015.
GAO said the Postal Service has already reduced costs by
about $2.4 billion since 2006 by closing redundant facilities
and consolidating some mail processing operations.
Mail volumes are projected to continue falling, and
automation improvements have made mail sorting more efficient.
In addition, many businesses now drop off mail in the area where
it will be delivered, bypassing most USPS processing, the report
said.
These shifts mean the agency’s network, including facilities
and employees, is larger than is needed, GAO said. The Postal
Service offered no comments, according to the report.
Postmaster General Patrick Donahoe has proposed closing or
consolidating more than 200 processing centers, which would
eliminate up to 35,000 jobs, and shuttering thousands of
unprofitable post offices.
Other proposed actions, such as raising postage rates beyond
inflation, ending Saturday mail delivery, or using a
retirement-fund surplus to incentivize early retirement, would
require approval from a deeply divided Congress.
The GAO in its report reiterated the “urgent need” for
Congress to pass comprehensive legislation that would allow the
Postal Service to cut costs or find new revenue streams. It also
acknowledged that many lawmakers, business mailers and USPS
employee organizations oppose closures and consolidations.
Business mailers, particularly periodicals, argue the
planned end of next-day mail delivery would raise their costs or
cause them to lose subscribers.
Postal unions have adamantly opposed facility closures,
which they said could erode mail volumes by reducing service to
customers. Union leaders point to the prefunding payment imposed
by Congress in 2006 as the main cause of the agency’s losses.
Many lawmakers reacted angrily to plans to close processing
facilities and post offices in their states and districts. The
Postal Service agreed to delay closings until mid-May, but
members of both parties have continued to protest the
consolidation efforts.
Senator Barbara Mikulski last month placed a procedural hold
on the leading Senate postal bill to protest the planned closure
of a processing center on Maryland’s Eastern Shore.
The National Association of Letter Carriers planned to hold
rallies across the country on Thursday to oppose the bill, which
would allow the agency to end Saturday mail after two years and
restructure rather than eliminate the prefunding payment.
A vote to begin debating the Senate postal bill failed last
month before Congress left for recess. The bill is expected to
come up again after senators return next week.
The leading House of Representatives bill would allow the
Postal Service to designate mail delivery holidays and create a
commission fashioned after the military’s base-closings process
to close postal facilities. It was approved in committee months
ago but has not reached the full House.
