To ensure its future the United States Postal Service (USPS) must do more than seek short-term fixes to its long-term financial problems. Year after year, the United States Postal Service continues to raise postal rates to cover its growing expenses without adequately addressing its significant underlying organizational and operational issues. Instead it is offering to cut service by eliminating Saturday mail delivery. These are complex problems requiring a comprehensive plan. Cuts in delivery service should be last on the list of considerations. Projected short-term cost savings from delivery cuts are minuscule in the context of the systemic change required and would only accelerate the decline in mail volume and revenue in the long term. It is difficult to find any business that would choose to increase prices and reduce service as a path to sustainability, yet this is precisely what the Postal Service is recommending. A healthy Postal Service is vital to Americans who depend on timely, affordable, reliable mail delivery. The dual strategy of raising rates while cutting Saturday delivery is no way to sustain customer loyalty or encourage use of mail. It also overlooks the dependence many - including small businesses and rural customers - have on six-day delivery. According to research from the Postal Regulatory Commission, an agency that provides oversight of postal rate and service changes, the actual savings to ending Saturday delivery would be only about half what is estimated. The Commission also found that customers in rural and remote areas would be especially hard hit because their mail delivery would take longer, and that small businesses and other first-class mail customers who depend on timely delivery would be affected far more than bulk mailers. Of course, change clearly is needed, but there are more substantive steps that can be taken before cutting Saturday delivery to eliminate inefficiencies and achieve a sustainable solution to the fiscal dilemma. A reasonable funding plan for pension accounts, and especially retiree health benefit accounts, is one. Addressing excess capacity and associated costs are necessary as well. To ensure its continuation, the service must address its underlying organizational and operational issues. Reducing delivery service to customers instead will only further jeopardize its future.
By Donald J. Hall Jr., president and CEO of Hallmark Cards Inc., headquartered in Kansas City, MO.