The Crisis Is in the Mail

The CFO of the U.S. Postal Service is lobbying Congress and the Obama Administration in order to stave off a cash shortfall at the agency.

Such as?

In terms of top-line flexibility, we want it to take less time to get our contracts approved before we can tell a customer that we’re able to provide a service. So we’re looking for reduced regulation and turnaround times on competitive deals from our regulator, the Postal Regulatory Commission. We’re also looking for more flexibility in current pricing constraints.

Then you get to the issue of cost, and the primary driver of cost is our delivery schedule. We spend over $30 billion a year on delivery. Ultimately, we’d love to be able to dynamically schedule our deliveries. But we don’t think that the Administration or Congress is ready to give us total freedom over that right now, given that part of our business is a monopoly.

So we’d like to be able to go from six-day to five-day delivery. That would allow us to save over $3 billion a year and start to return us toward profitability. The mail volumes indicate that we’d still be delivering about the same number of pieces of mail per day to each mailbox as we were two years ago, when we had 30 billion pieces more mail per year.

There’s also the cost of health benefits and other benefits that our employees enjoy. If we’re able to get increased flexibility from our union workforce — over 500,000 of our employees are union employees — that starts to save substantial amounts a year. We’d like to be able to be more efficient in moving an employee from one track to another and in getting lower cost on our benefit programs. If we can change those contracts, some of which are backed by federal laws, we’ll be more efficient on the cost side.

What role do you play in the lobbying effort?

One of the leading roles. Obviously, Jack Potter takes the lead role in pretty much everything he does. He’s an incredibly high-energy guy and is constantly talking with stakeholders. I accompany him to the White House and Capitol Hill, and we’ve met with a number of Administration people and Congressmen and Senators in initial discussions. At this point, they appear to be pretty supportive.

 

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