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EcommerceBytes-NewsFlash, Number 2979 - January 15, 2013 - ISSN 1539-5065    1 of 4

USPS Accelerated Cost Cutting Could Damage Service, Says PRC

By Ina Steiner
EcommerceBytes.com
January 15, 2013




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The United States Postal Service was ordered to accelerate plans to restructure operations and cut costs, but the Postal Regulatory Commission is concerned that moving too quickly will impact both quality of service and universal postal service.

The USPS revealed Monday that the Postal Service Board of Governors has directed management to accelerate the restructuring of Postal Service operations to further reduce costs in order to strengthen Postal Service finances. Specifically, the Board approved restructuring initiatives and also instructed the Postal Service to revise its 2012 five-year comprehensive plan to account for current financial and liquidity conditions.

The USPS said it is facing an "unprecedented set of financial challenges heightened by the inability of Congress to pass comprehensive postal legislation."

Postal Regulatory Commission Chairman Ruth Goldway said the Postal Service left the Commission out of discussions, and said there may be other administrative proposals that don't involve public polices before the Commission.

"I'm concerned that because the Congress has not yet acted and the Postal Service has to move more quickly, that quality of service and the Postal Service's obligation to universal service will be damaged in some way," Goldway told EcommerceBytes.

The PRC had already advised the USPS to move more slowly when it came to its processing plant reorganization. If the Postal Service moves too quickly with regard to the reorganization and the hours reduction plan, "there may be people who are without Post Office access at all," she said.

"I want people to know that if the Postal Service does move ahead quickly and citizens feel that their service has deteriorated to the point it is no longer meeting universal service obligations, they can come to the Commission and complain." Goldway said the PRC has strength in its complaint process to direct the Postal Service to make changes. "If people have concerns, there is an option." (See Postal Service Complaint Department, Open for Business)

The Postal Service is currently implementing major cost reduction efforts throughout its retail, delivery and mail processing operations. Since 2006, the Postal Service has reduced its annual cost base by approximately $15 billion and reduced the size of its career workforce by 168,000 or 24 percent.

The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue, and encourages the 113th Congress to make postal reform legislation an urgent priority.

Goldway also urged legislative action, saying Congress should "continue to focus on the Postal Service in spite of the other big problems that the country faces. The Postal Service is a huge part of the economy and an important part of our communications infrastructure. Congress needs to pay attention and move forward on this legislation as well."

"The most important thing is that the Postal Service work with care to make sure that the quality of service and its universal service obligation are maintained while it is moving quickly to address the operating deficits that it has," Goldway said.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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