Hearing Scheduled To Discuss Future of the U.S. Postal Service

Apr 11, 2013 7:11 PM  By

House Oversight and Government Reform Committee Chairman Darrell, Issa, R-Calif., announced in a press release he would convene a full committee hearing to examine the future of the United States Postal Service.

The hearing will explore a range of options to avoid a multi-billion dollar taxpayer funded bailout and restore USPS to long-term financial solvency, according to the press release. Among those invited are Postmaster General Patrick Donahue and members of the USPS Board of Governors.

In a statement earlier this week, the USPS announced they would delay the implementation of its new five-day mail delivery schedule until legislation is passed that provides the USPS with the authority to implement a financially appropriate and responsible delivery schedule.

Congress has prohibited the implementation of a new national delivery schedule for mail and packages, which would consist of package delivery Monday through Saturday and mail delivery Monday through Friday. This would have taken effect in the beginning of August, according to the statement.

“The Postal Service’s decision to first pursue modified Saturday delivery and then renege on its cost-cutting plan has seriously set back efforts to advance postal reform legislation, said Issa in the press release. “This hearing will allow us to review a wide variety of options to bring the troubled agency back from insolvency.”

In the statement earlier this week, the USPS Board of Directors said congress left it no choice but to delay this implementation at this time. Should the transition had taken place, according to their statement, it would have generated $2 billion in annual cost savings and is a necessary part of a larger five-year business plan to restore the Postal Service to long-term financial stability.

According to an article in Yahoo News, the USPS has lost $16 billion last year and said it wanted to switch to five-day mail service to save the $2 billion.

In February, direct-to-customer merchants who mail catalogs told Multichannel Merchant they were fine with five-day delivery plan.

Catalog mailers and others in direct-to-customer said in February they thought the savings would be passed on to them in the form of fewer future rate increases, according to the Multichannel Merchant article.

The USPS has advocated shifting to a five-day delivery schedule for mail and packages, according to Multichannel Merchant. However, recent strong growth in package delivery – a 14% volume increase since 2010 and projections of continued strong package growth throughout the coming decade led to the revised approach to maintain the package delivery six days a week.

Issa said Wednesday in his statement; he was disappointed that the Postal Service has backed away from plans to implement a modified Saturday delivery schedule that polling indicates the American people understand and support. The reversal, he said, significantly undercuts the credibility of Postal officials who have told Congress that they were prepared to defy political pressure and make difficult but necessary cuts.

According to Yahoo News, some lawmakers who support the five-day delivery plan said there will still be some room for it to change its delivery schedule. The language requiring six-day delivery was vague and does not prohibit what products it delivers on Saturdays.