Postal Service tries cutting costs again
Washington • Continuing its cost-cutting efforts, the U.S. Postal Service is planning to offer early retirement to thousands of employees at the management and executive levels, according to a group with knowledge of the discussions.
The Postal Board of Governors also began considering pricing issues on Thursday, including a potential rate increase that's alarming mailers of newspapers and magazines, advertising and other bulk correspondence.
The mailing industry has mounted a public relations offensive against what it says could be a request for a steep rate increase, arguing to the board and in the media that raising prices is premature and would hurt their business and, ultimately, the Postal Service.
Board spokesman David Partenheimer said that members reached no decision Thursday and that they will continue listening to stakeholders, with a possible vote at their next meeting, in late September.
Regarding the early retirement offers, the National Association of Postal Supervisors (NAPS) said on its website that USPS will notify eligible workers starting Sept. 16. The retirements would take effect at the end of December for Civil Service Retirement System participants, and at the end of January for workers applying for the Federal Employees Retirement System, NAPS said.
Employees from the Postal Service headquarters would not be eligible for the early outs, the group said.
The financially strapped USPS has used early-retirement incentives repeatedly in recent years to reduce costs without resorting to layoffs. In 2012, about 25,500 front-office clerks, mail handlers, drivers and other employees accepted such offers in one of the agency's largest efforts to trim its workforce.
About 34,000 Postal Service employees have retired during the current fiscal year through July, with many taking early outs, according to a recent Washington Post article.
The agency did not respond to requests for comment Thursday. NAPS said it learned of the early-retirement plans late last month through discussions with USPS headquarters and from a briefing by postal executives.
Consideration of a possible "exigent rate increase" above the annual rate adjustment for mail that's capped by the Consumer Price Index comes after the Postal Service's unsuccessful effort to bypass Congress's approval and eliminate Saturday delivery.
After Congress balked and with no passage of legislation to aid the agency - the board told postal officials to seek other revenue sources. One option is a rate increase that could put direct mailers on the hook for hundreds of millions more per year.
"Increasing rates cannot be part of a sustainable solution because this will add to the Postal Service's structural deficit problem by driving more postal volume to e-commerce competitors," Rafe Morrissey, vice president for postal affairs for the Greeting Card Association, said in a statement. The association represents 200 greeting card publishers and says the Postal Service delivers 60 percent of the close to 7 billion cards sold annually.
The Affordable Mail Alliance, which represents direct marketers and catalog mailers, warned Postal Board Chairman Mickey Burnett last week of similar consequences - that mail volume and postal revenue would plummet.
The Postal Service can ask for an "exigent" rate increase only in "extraordinary or exceptional circumstances," according to a 2006 law governing many postal operations. The Postal Regulatory Commission must then approve it.
The commission rejected the agency's request for a 5.6 percent exigent increase in 2010, agreeing that the recession and exceptional circumstances had hurt postal revenue but disagreeing that an increase was necessary. The Postal Service filed suit but the court upheld the regulatory commission's determination.
From the Postal Service's point of view, turning to business mailers is the kind of reform that could help recoup multibillion-dollar losses in recent years as first-class mail volume plummets and the agency must prepay billions of dollars in health-care costs for future retirees. Congress has so far failed to enact legislation to help stem the losses.