Will PRC’s Opinion Help or Hurt Five-Day Delivery Prospect?

Mar 31, 2011 9:00 PM  By

Now that the Postal Regulatory Commission has issued its advisory opinion on the U.S. Postal Service’s quest for five-day mail delivery to Congress, it’s still unclear how the advice will affect the proposal.

“The PRC’s opinion reflected the attitude of mailers,” says Joe Schick, director of postal affairs for printer Quad/Graphics. “There isn’t a lot of support for five-day delivery.” In fact, he notes, “there is some direct opposition.”

Some don’t like the idea of delivery-prospect-0331jt1five-day mail delivery, “but feel it is inevitable given the financial position of the USPS,” Schick says. “Most were concerned with the actual projected savings and real impact on overall delivery. So I don’t think the opinion of the PRC did anything to change anyone’s thinking on this issue.”

Five-day mail delivery was touted as a $3.1 billion savings estimate, according to the USPS. But the PRC concluded that the USPS’s annual net savings from eliminating Saturday delivery would be $1.7 billion, and full savings in either case would probably not be achieved until three years after implementation.

The PRC also found that the USPS failed to evaluate the impact of five-day delivery on customers in rural, remote, and noncontiguous areas. Though the proposal would end Saturday mail delivery, collection, and outbound mail processing, post offices would stay open on Saturdays, and mail would be delivered to post office boxes.

Don Landis, vice president of postal affairs for catalog printer Arandell Corp., says the PRC’s advisory opinion was probably disappointing to both sides of the issue. “The opposition to five-day was hoping the PRC would find a lot more fault in the USPS study justifying their request for five-day delivery,” he says. “Likewise, those just wanting the USPS to cut costs were looking for the PRC to have a more favorable opinion for five-day delivery.”

What both sides received from the PRC, Landis adds, “was sort of a middle of the road or neutral opinion.” But since it was just an advisory opinion, and the PRC did report savings, “the USPS will still hotly pursue Congress to relinquish the six-day requirement.”

Federal law has mandated a six-day mail delivery schedule since 1983, and Congress still needs to lift the restriction before five-day mail delivery could happen.

Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association, says policy makers need to know the tradeoffs involved. The PRC’s opinion finds that the Postal Service won’t realize the savings it estimated, and that the USPS has “failed to ascertain adequately the reaction of the public to this reduction in service.”

Those are both troubling points, Cerasale adds. A reduction in service will produce significant savings, but not nearly enough to bridge the Postal Service’s budget gap. He notes that the DMA has pushed for the USPS to abandon its “one size fits all” approach and examine a reduction of Saturday delivery in specific, but not all, areas of the country.

There is significant opposition to eliminating Saturday delivery, Cerasale says. “In order for any action in Congress, the Postal Service must re-examine its total elimination of Saturday delivery and find a compromise acceptable to Congress.”