Losing $25M a day : Postal Service worried by ‘unsustainable path’. The United States Postal Service is losing $25 million dollars per day due to its broken business model, Postmaster General Patrick Donahoe said Wednesday.During a congressional hearing, Donahoe informed the House Oversight and Government Reform Committee that the USPS is “currently operating with a broken business model.”
“Since the economic recession of 2008, we have been experiencing a significant imbalance between revenues and costs. This imbalance will only get worse in the coming decade unless laws that govern the postal service are changed,” Donahoe said at the hearing.
The Postal Service announced its about-face a week before the hearing, so Donahoe was spared the rod.
He did get in this dig: “According to this law, we are now required to deliver mail as if it were the year 1983.”
That gets to the crux of the problem. The Postal Service is operating with paper and pencil rules in a digital world. Donahoe said the USPS needs greater flexibility, not just to implement five-day delivery, but also:
■“To develop and price products quickly.”
■“To control our health-care and retirement costs.”
■“To switch to a defined-contribution retirement system for new employees.”
■“To quickly realign our mail processing, delivery and retail networks.”
■“To develop a more streamlined governance model.”
■“And we need more flexibility in the way we leverage our workforce.”
The details that go with those bullet points can be very controversial. The unions won’t roll over, for example, to proposals that would control USPS health-care and retirement costs by pushing those costs onto employees. Donahoe said he sent letters to the postal unions and management associations Tuesday, asking them to renegotiate their labor contracts. Those letters will be welcomed like a tax audit.
Labor-management relations can be frosty in any organization. Donahoe’s proposals have not endeared him to the USPS working class.
At the hearing, he sat at the witness table with Fredric V. Rolando, president of the National Association of Letter Carriers (NALC).
In his written testimony, Rolando said Donahoe “wants to degrade [the USPS’s] last-mile delivery network by cutting Saturday delivery.”
Last July, 7,000 delegates to the NALC convention unanimously approved a “motion of no confidence” in Donahoe.
“[B]ecause we are convinced that the business strategy the Postmaster General (PMG) is following is doomed to failure,” Rolando said in his written statement to committee members, “we have called for the PMG’s resignation. We respectfully think you should too.”
Although Donahoe’s five-day plan was blocked, he views it as a delay, rather than a defeat.
“We announced that we would delay implementation of our new schedule,” he said, “until we gained legislation giving us the ability to move forward.”
Near the end of the hearing, Issa asked about the big news involving the Postal Service — the mail with suspected ricin sent to President Obama and Capitol Hill.
“We can actually track the mail back through the system” to determine which employees handled the mail,” Donahoe said. “We’ve got the absolute best detection systems going.”
There have been no known employee illnesses from handling those items, according to the Postal Service.
After the hearing, Donahoe told reporters “a fairly small number” of workers would come in contact with the suspect mail “because everything is automated . . . none of this mail would be hand-sorted.” He also said, however, that the mail would have passed through postal facilities in Memphis and Capitol Heights and on V Street NE in Washington — and a “couple hundred people” work in each facility.