Postmaster General Patrick Donahoe
http://thedianerehmshow.org/shows/2011-09-27/postmaster-general-patrick-donahoe
The U.S. Post Office is on the verge of defaulting on its health care fund obligations and may have to shut down entirely this winter unless congress intervenes. This according to Postmaster General Patrick Donahoe. He has proposed cuts to save the service, including ending Saturday delivery, closing hundreds of local post offices, and laying off nearly a fifth of the work force. President Obama recently presented his plans to save the institution, which backed a five day delivery week. The postmaster general discusses the future of the U.S. Postal Service and what it means to consumers.
Guests
Patrick Donahoe
the 73rd Postmaster General of the United States.
Fredric Rolando
president of the National Association of Letter Carriers
Program Highlights
The famous motto goes, neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds. But now, a financial storm could shut down Postal Service this winter. Earlier this month, Postmaster General Patrick Donahoe testified before Congress that the USPS needs emergency action to stabilize its finances.
Pre-funding Health Care Benefits
The postal service is forced to pre-fund its employees' health benefits up to about 50 percent, which is one of the reasons for its current financial problems. "We floated the idea of taking over our own health benefits because if the first solution doesn't happen, we have to get out from underneath this pre-funding," Donahoe said. "We don't know of any other private companies that pre-fund anywhere to the rate that we do."
Getting the Post Office Back on its Feet
If nothing changes over the next few years, Donahoe estimates that the system will be in the hole by about $18 billion. He proposes taking the organization's expense line down by about $20 billion between now and 2014. If that happens, the system will become profitable. But it would also involve laying off about 120,000 workers. Since 2000, the postal service has reduced its staff by about 250,000.
Where the Losses Are
"We are losing first-class mail at the rate of 7 to 8 perecent a year. First-class mail pays freight. The contribution we get from that product keeps the 33,000 post offices open. It keeps our 200,000-plus routes delivering six days a week," Donahoe said. There is no substitution for first-class in terms of revenue generation, according to Donahoe.
Raising Prices on First-Class Mail
The problem with raising stamp prices is that this may cause more people to turn to online bill-pay and similar Internet services rather than mail. "The single piece where you and I would put a stamp on a bill, that's probably less price sensitive. But when you change prices like advertising mail, people will either reduce the number of pieces they mail or go to the Internet. We can't afford that," Donahoe said.
Looking Ahead
"The postal service plays a very important role in American economy and society today, as we have for 200 years. There's nothing in the near future that, I think will threaten that," Donahoe said.
You can read the full transcript here.
Comments
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I want to briefly share my experience with the US Postal service. I cannot praise them enough. I started an online business 2 years ago and have shipped out over 3,000 packages domestically. Of the 3,000+ packages I have mailed only 1 package that I am aware was not delivered. To me that is phenomenal. The flat rate boxes that are delivered free to my house have saved me thousands of dollars not to mention the convenience of printing postage on line. The customer service I receive from my postmaster Brenda at the Terrace Park Ohio Post Office is nothing short of exceptional. She is fast, efficient and has often stayed after hours to ensure the many daily parcels I send get processed that day. I hope the postal service figures out a way to keep Cincinnati’s processing center in business because to shut it down will have a negative impact on my business.
Years ago, the USPS offered two-day delivery for letters, for an extra fee. Friends and I used the service to ensure our letters would get to their recipients within two days.
At times, the letters wouldn't reach their destinations until 3 or more days (disappointing). The USPS's response: "We don't *guarantee* the two-day delivery." (infuriating -- and effective incentive to use UPS or FedEx).
Years later, it's good to know that USPS sometimes contracts delivery service to companies such as UPS. A relief.
roland wrote:
"Just repeal the silly benefit funding mandate."
Yeah - who cares whether those silly employees get their benefits or not.
The USPS was saddled with an unfair burden thru a provision in the Bush-era 2006 PAEA Law. It requires the USPS pay $5.5 billion a year to the US Treasury to fully pre-fund FUTURE retiree health benefits. FUTURE, as in 75 years into the future. No other Federal agency, company, or organization fully pre-funds retiree health benefits. NONE! They all operate on a pay-as-you-go basis for their current retirees.
The OIG and PRC have both audited USPS contributions to the CSRS/FERS pension funds and found them to be overpaid by $50-75 billion. HR 1351 would require OPM to recalculate USPS pension contributions and refund any overpayments. The overpayments would then completely pay-off the retiree pre-funding obligation, debt to US Treasury, and still have money left over. All the radical proposals to cut delivery, close 3000 post offices, and lay-off 100,000 workers are uneccessary. Call your congressman and tell them to co-sponsor HR 1351 and let the USPS get back to the business of delivering the mail, 6 days a week to 146 million addresses.
USPS should do every other day delivery, 3 days one group and 3 days another group.
If people want everyday delivery (6 days) they need to pay extra for it.
Basically they could cut personnel and delivery costs in 1/2 and the users that want more make up the difference to get 6 day service.
Everything Postmaster Donahoe said sounded very logical and well thought out, especially the part about secure electronic mail. I think there would be a huge market for this if the Post Office were to do it right.
One thing that I think he is TOTALLY delusional about is junk mail (I believe he referred to it as "advertising mail", but let's call it what it is). I have serious doubts about any market research proving that a significant amount of people do anything but throw junk mail in the trash without reading it. This is one UNWANTED "service" provided by the Post Office that needs to end. Nobody wants all that junk in their mailbox. Period. I think the Post Office would quickly find themselves on every known spam blacklist if they were to attempt delivering this junk in any future e-mail service they might offer. If anyone had the ability to "turn off" junk mail now, they would. The Post Office simply will not let you opt out of junk mail, which is a tremendous waste of resources, and a scam if you ask me.
Just shut it down, now actually read this before freaking out. The slack WILL be picked up by UPS and FEDex, the will need to hire more people to support this(Only enough to do the job, novel concept hmm). The prices for these services will be adjusted to match need and economy of scale.
Ron please read my earlier post. None of the proposed radical changes to the USPS are neccessary if HR 1351 passes. The USPS is not a business, it is a government service for 146 million addresses, both rural and city. Millions of citizens, advertisers, and businesses do want delivery 6 days a week. Millions less fortunate than you and I, mostly poor and elderly, do not have computers or email. They all depend on the USPS to provide affordable services.
williambertram wrote:
"The Post Office simply will not let you opt out of junk mail."
But they could! By charging you a fee to filter it for you. william, junk mail is a source of revenue to the USPS. You just have to replace that with an alternate revenue stream and that could be from the customer. I'd be willing to pay for that service.
mnemecek wrote:
"Just shut it down, now actually read this before freaking out. The slack WILL be picked up by UPS and FEDex"
So is Auntie Millie going to send you a birthday card by FedEx? I don't think so. There will always be a Post Office, and constitutionally, there should be. It will just continue to evolve and look much different than it does today.
Mancuroc has some of it right. Some very important background, however, is left out and should not be overlooked. In order to understand the whole picture, go back to the early 1970s when Congress decided the Post Office Department was done and the Postal Service was established. The new entity was off-budget and unfunded, required to pay its own way. This was good, but Congress set the stage for today's disaster by giving up responsibility to pay for what it requires (maintain offices people won't use for postal business, and build and maintain plants not needed for postal operations - so Congress gets votes by boosting constituents' economies; and by keeping the power to grab postal revenue to pay for Congress's on-budget costs and generosity without taxing Americans honestly). All this worked as long as there was First Class Mail volume growth in order to fund postal ops and pay the shake downs. Packages do not make up FCM letter losses because competitors take the cream of that market. The prefund and pension overpays are just two parts of the congressional scam.
The best USPS service I have every received and consistently received is through a post office inside the BP station in Florida (bradenton, 34208)
The service i get in the postal branches is not bad as much as SLOW SLOW SLOW
I am a FedEx Ground driver. I have been working at FedEx for over 6 years.
The Post Master General had some of his facts wrong.
1-FedEx Home Delivery and FedEx Express both deliver on Saturdays.
2-UPS also delivers on Saturdays for a added fee.
3-FedEx delivers packages to the USPS FOR the USPS NOT for them to deliver OUR packages.
If you order something online, say from Amazon, and you select the free shipping your package is shipped via "Parcel Post", that means it will be delivered by the USPS BUT it is picked up by a FedEx truck, driven across the country on a FedEx truck, sorted at a FedEx building and loaded onto a local FedEx truck for delivery to the corresponding Post Office where it is then sorted for delivery the next day by the USPS.
The USPS DOES NOT deliver our packages.
Average delivery time for FedEx is 3 days, UPS is 4 and the USPS is over 5.
I tried calling this morning to correct the Post Master General but of course I could not get through.
carlton2u wrote
But there are too many employees that conduct themselves as if it's an entitlement rather a business. The problems are primarily on the phone or in the post office. By and large, the letter carriers are very responsible, and generally good neighbors
carlton2u:
This is somewhat of a funny story. But my company sent four of us to work in Puerto Rico and we were told me needed to get a passport which you don't need being a US Territory but I'm the new guy. But I called my local post office and spoke to a guy explaining to him that I had to come by and do my paper work for the passport and what time was this process done. I could tell that he wasn't to sure? So I asked him, you know the paper work and I have to raise my right hand to take an oath. At that movement he made it a joke, telling me loud, "oh no, in all the years I have been here I have never heard of those things, I could hear laughter in background. I know this situation is not common, most post office employees are very helpfull.
I eventually took it to the City Clerks office and had it done in a jiffy.
I don't think that the public understands that POSTAL EMPLOYEES do want to provide great customer service - and THEY do find small ways to do this. The public needs to understand that the lack of ability to do this on a grand scale is due to management. They want more done - with less time to do it. Just like a lot of businesses these days. A lot of postal employees do things for customers on their own time - something most people don't get to see. I've seen postal employees take customers shopping, do yard work, odd jobs, etc . . . all on their own time. They've taken up collections for customers out of work, after a fire, having major medical expenses, adopting families during the holidays, etc . . . again with their own time and often donating their own money. They also are the only company some of the elderly and disabled see on a daily, weekly, or even monthly basis. Please understand that most postal employees are caring, professional individuals.
Irish831 wrote:
"I don't think that the public understands that POSTAL EMPLOYEES do want to provide great customer service - and THEY do find small ways to do this. The public needs to understand that the lack of ability to do this on a grand scale is due to management. "
I agree with you 100%, Irish. I think most PEs do want to do a good job ... and do. There are a few bad apples in every bunch whether it's USPS, McDonalds, or Home Depot. Everybody has good and bad days, but the service I get from USPS in the branches has always been good. They seem to always be helpful in getting delivery options, proper postage and addressing etc. right for my particular needs, they're helpful with questions, etc. Now, the DMV? That's another subject!
For the FedEx Ground Driver - The USPS DOES deliver packages from/for UPS and FedEx. I know this for a fact. It is called "the last mile." The majority of the parcels are not FedEx/UPS but they are being delivered by the United States Postal Service. Sorry, but this is factual information.
Then you contradict yourself.
You say "The USPS DOES NOT deliver our packages."
Then you say "If you order something online, say from Amazon, and you select the free shipping your package is shipped via "Parcel Post", that means it will be delivered by the USPS BUT it is picked up by a FedEx truck, driven across the country on a FedEx truck, sorted at a FedEx building and loaded onto a local FedEx truck for delivery to the corresponding Post Office where it is then sorted for delivery the next day by the USPS."
FedEx and UPS parcels don't arrive and sort themselves to the proper route - so, yes, USPS clerks do that when they arrive at the Post Office. Then they are loaded into postal vehicles and delivered with the rest of the mail and parcels.
This is obviously a win-win-win situation or I doubt it would be going on.
Parcel Post is low cost USPS shipping, it has a USPS label on it but it is picked up from the shipper via FedEx, transported across the country via FedEx, and then delivered to the Post Office via FedEx and then the Post Office delivers it the next day.
These are NOT FedEx packages, these are USPS packages.
If it has a FedEx label it is delivered by a FedEx driver, no exceptions.
Maybe I just did not illustrate my point very clear yesterday?
I agree it is a win-win, the USPS saves money on transportation, we already have a fleet of trucks and planes driving/flying across the country so why not utilize that and throw some mail on there too?
I am all for the Post Office, they will survive.