USPS moves on rates, seeks citizen input

In the roughly two years since the U.S. Postal Service began pursuing broad operational changes to counter mounting financial losses, meaningful reforms in the digital age have occurred at snail-mail pace.

Several mail rate increases demonstrate an attempt to move toward solvency, but one local professor thinks the Postal Service is stuck between a rock and a hard place as a quasi-governmental agency.

David Mitchell, director of the Bureau of Economic Research at Missouri State University, said USPS reforms are likely to exacerbate the problem.

“It has just raised the postal rates again, which I think would continue to further decline first-class sales,” Mitchell said, noting he and his family rarely uses the Postal Service anymore. “We use to mail out bills, but I think there is only one bill we continue to mail out. Everything else is online or over the phone.”

In December, the Postal Regulatory Commission voted to approve a host of rate increases scheduled to go into effect Jan. 26. The increases come on the heels of a $15.9 billion loss for USPS in fiscal 2013, which ended Sept. 30, and a projected loss of $6 billion this fiscal year.

For businesses, rates for bulk mail, periodicals and packages will rise 6 percent, outpacing the rate of inflation, which was 1.5 percent based on the Consumer Price Index.

According to USPS, the rate hikes involving first-class mail include: 1-ounce letters to 49 cents from 46 cents; postcards up a penny to 34 cents; 1-ounce flats to 98 cents from 92 cents; and 1- to 3-ounce parcels to $2.32 from $2.07.

A precipitous decline in first-class mail volume is a key reason for recent Postal Service losses, as is a $5 billion employee pension prefunding requirement. Regional USPS spokesman Richard Watkins said annual first-class mail volume has declined by more than 25 percent since 2006.

Springfield move delayed
The rate increases come as acting Springfield Postmaster Chris Adams attempts to establish a local Customer Advisory Council for residential and small-business customers to express their concerns and ideas. A Jan. 15 meeting at the Library Center, 4653 S. Campbell Ave., was attended by only a handful of people.

“We want to get people from the community to sit on a board with postal officials from Springfield to form a council to address your concerns,” said Darrin Gadson, a consumer and industry contact manager who works out of Kansas City, to a community room largely occupied by empty chairs. “We clearly anticipated (more) volume here, but we’re happy for whoever showed up.”

At the event, Adams and regional USPS representatives said postal managers are active participants in CACs to answer questions, clarify rules and resolve problems.

Of concern locally is the plan to move Springfield’s sorting operations to Kansas City. USPS officials had scheduled to transfer the sorting operations next month, but Watkins said equipment upgrades associated with the consolidation have pushed back the timetable to at least March. The 1 million-square-foot Kansas City facility has worked in recent months to bring in sorting operations from Topeka, Kan.

Watkins said tens of thousands of jobs have been eliminated through attrition nationwide in recent years, and no layoffs are planned in Springfield. He said some are taking jobs in Kansas City or moving to other areas where they are needed.

“No one is losing their jobs,” Watkins said. “This is about economies of scale and not necessarily decreasing workforce.”

He said a CAC also is being established in Cape Girardeau, where sorting operations are moving to Kansas City as well, but he said the groups across the country aren’t necessarily started based on whether a consolidation is planned. He said the groups are formed based on areas where questions about services are most prevalent.

Unique model
Broad reforms, such as the move to consolidate processing centers, that address USPS losses can only happen with the approval of Congress, which Watkins said explains why changes are slow to come.

With direction from Washington, USPS has continued operating hundreds of smaller post office retail centers it wanted to close, but it has cut back on hours of operation. USPS also had proposed a five-day delivery schedule, but Congress halted that idea in April. Noting USPS still sees merit in a shortened delivery plan, Watkins said 80 percent of postal customers who participated in a related survey said they would support the move.

“We hope Congress can give us the flexibility we need to run the Postal Service as any other business would,” Watkins said.

If USPS operated by private business models, Mitchell said it already would have closed its doors.

“It has this dual mandate of providing equal service to everyone, but can’t differentiate the price. It can’t say, ‘To send a letter from here to Nixa to pay Mercy for insurance, we’re only going to charge 10 cents for that and charge $1 for the bill that goes from here to San Francisco.’ That’s part of the problem,” Mitchell said. “It has to provide service in all of the little bitty, small towns.

“If it is going to stick to that model, and I assume it is going to, it will always lose money.”[[In-content Ad]]