Homer Alaska - Business

Story last updated at 8:05 PM on Wednesday, March 30, 2011

Proposed postal changes studied

By Jonathan Grass
Morris News Service - Alaska

The Postal Regulatory Commission has released its final advisory opinion this week, stating that the savings in the U.S. Postal Service proposal to end Saturday mail delivery may not be as high as the USPS originally observed. The USPS proposed cutting service and making other changes to address more than $2 billion in annual losses.

The USPS found that ending Saturday service would save $3.1 billion, while the Postal Regulatory Commission found it would save only $1.7 billion, take three years to achieve and — after revenue losses were deducted — save $1.1 billion.

The commission found that net revenue losses from going to five-day service would be $0.6 billion. The USPS estimated losses to be $0.2 billion.

The commission's opinion also addressed that the proposed change would cause an average of 25 percent of First-Class and Priority mail to be delayed by two days. It also noted that the USPS research didn't take impact to rural and remote areas into account.

"Some of the Commission's analysis in today's Advisory Opinion suggests that even lower estimates of savings and higher volume losses are possible. In all cases, we chose the cautious, conservative path. Our estimates, therefore, should be seen as the most likely, middle ground analysis of what could happen under a five-day scenario," Chairman Ruth Y. Goldway stated in a release.

Sen. Lisa Murkowski has opposed the five-day service proposal and testified before the commission in September. She addressed Alaska's concerns with cutting service, particularly the negative impact to rural communities who depend on the Postal Service for medical supplies, prescriptions and other necessities in a timely manner. She also had argued that the cuts would involve increased costs to customers.

"The commission did an excellent job reviewing both the potential cost benefits and impacts to Postal Service customers associated with the proposal to end most Saturday mail services," Murkowski said. "I am pleased that the Commissioners have taken seriously the negative impact the proposal could have on Americans who live in rural and remote areas of the nation, including Alaska. I anticipate that the Senate will take their findings and recommendations just as seriously."

The USPS has stated it will push ahead in bringing its case to Congress. The elimination of single mail delivery days has been proposed several times before. Congress adopted specific language to maintain six-day service in 1983.

It will consider the Commission's opinion as it reviews the USPS request to change the law.

The USPS has stated that its research was extensive on the effects of five-day service and will be analyzing the Commission's data. A release states Postmaster General Patrick R. Donahoe's reaction as saying the cut is necessary to resolve financial instability from huge losses in mail volumes and revenues, saying, "Five-day delivery is an integral part of our action plan for the future."

The USPS states the Commission's report is advisory only and not a final determination of the proposal's merits.

Murkowski's release also states the Postmaster General announced that the Alaska District will not be among those chosen for consolidation. The USPS anticipates cutting 7,500 administrative and executive employees nationwide over the next year and has planned early retirement incentives to eligible USPS employees.