Mailers Council Issues Statement on Postal Service Projected $6 Billion Deficit, 5-Day Delivery Proposal

ARLINGTON, VA, January 30, 2009—Today, Mailers Council Executive Director Robert E. McLean issued the following statement in response to Senate testimony given by Postmaster General Jack Potter regarding the United States Postal Service’s dire financial situation and their proposed response to it.

“The mailing industry, which represents more than 9 million jobs in this country, is very concerned at today’s announcement that the United States Postal Service could lose up to $6 billion in 2009 and, should that occur, would be unable to meet its financial obligations. The Postal Service is an essential tool of all business. Although the Internet is unquestionably important to the nation’s economy, we must have a reliable and affordable postal system.

“To cope with this situation PMG Potter asked for legislative relief in two areas: a change to the way it prefunds retiree costs and the opportunity to reduce service from six-day delivery to five-day mail delivery.

“We strongly support the Postal Service’s request for legislation that would revise the payment schedule for future retiree health care benefits. This is in no way a bailout but a minor adjustment of payments to this fund that currently contains $32 billion. Making additional payments to this fund during the current financial crisis places an unnecessary fiscal burden on the Postal Service and will add to their losses. Altering the payment schedule will provide time for the economy to recover and mail volumes to return to normal levels, at which time, payments to the fund will resume.

“As for five-day mail delivery, such a dramatic service cut would adversely affect mailers who have built their business models on six-day delivery. It would also harm customers in many ways. If mail is delivered later than expected, customers might not receive essential medicines when needed, critical time-sensitive legal documents could arrive after required deadlines, and mortgage and other bill payments could be delayed just enough to generate late charges.

“Our biggest concern, however, with such a change, is that it will not improve the Postal Service’s bottom line. It will, we fear, result in the loss of revenue because it will drive away customers who count on reliable six-day service that is essential to the nation’s commerce. Furthermore, it is important to remember that postage rates will increase in May. Raising rates and cutting service at the same time would only compound a bad situation. We believe mail volume lost because of these actions would never return. So, although we recognize the serious financial challenges the Postal Service faces, this is not the solution.”