Five-Day Mail Delivery Plan Reviewed
The five-day mail delivery plan is being reviewed following a plea by the US Postmaster. The plan is part of an effort to cut costs and avoid further financial distress.
Previous efforts to change the delivery schedule were halted earlier this year. However, as the US Postal Service continues to lose money, the idea is being reviewed.
As reported by Reuters, Postmaster General Patrick Donahoe spoke before the
House Oversight and Government Reform Committees on Wednesday. Donahoe explained flaws within the current business model:
“[it] does not… adapt to changes in the marketplace and it does not have the legal authority to make the fundamental changes that are necessary to achieve long-term financial stability.”
The problems began in 2006. A mandate passed by Congress required the Postal Service to prefund healthcare for future retirees.
Additionally, more consumers chose e-mail over “snail mail,” causing the Postal Service to lose a great deal of revenue.
The five-day mail delivery plan is expected to help the Postal Service to make up for the loss.
The US Postal Service relies on sales of stamps and other products to maintain operations. First-class mail accounts for the majority of revenue. Unfortunately first-class mail delivery lost $198 million in the second quarter of this fiscal year.
Donahoe underlined his concern, pointing out that the Postal Service will likely default on September’s payment to the retiree healthcare fund.
Changes in the business model, including five-day mail delivery, are expected to save more than $20 billion by 2016.
As reported by The Washington Post, Congress has denied previous requests to change the business model.
Following Wednesday’s plea, some officials have indicated a possible compromise. Representative Elijah E. Cummings states that they are “very close” to making an agreement.
Senator Tom Carper explained that without help “the Postal Service will drift toward insolvency, and, eventually, the point at which it will close its doors.”
Donahoe has indicated that five-day mail delivery may be decided without congressional approval. However, for a compromise to work, cooperation is essential.
[Image via Flickr]
