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Weighing Postal Service's Future

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Weighing Postal Service's Future

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Weighing Postal Service's Future

Weighing Postal Service's Future

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The volume of mail handled by the U.S. Postal Service fell by 13 percent in fiscal 2009, a drop of 25 billion pieces of mail. Anthony Conway, executive director of the Alliance of Nonprofit Mailers, says e-mail and the current recession have been a double-whammy for the Postal Service.


If you think your employer had a bad year, think about your local letter carrier. In fiscal 2009, the volume of mail handled by the U.S. Postal Service fell by 13 percent, thats a drop of 25 billion pieces of mail. The postal service lost $3.8 billion in the year that ended in September. And the only reason its balance sheet looks that good is that Congress relieved it of $4 billion for retirees health benefits.

Why is the old post office doing so badly and how might it recover? For answers to those questions, we turn to Anthony Conway, who worked there for more than 30 years and is now executive director of the Alliance of Nonprofit Mailers. Welcome to the program.

Mr. ANTHONY CONWAY (Executive Director, Alliance of Nonprofit Mailers): Thank you.

SIEGEL: And we should acknowledge first, your members have a vested interest in nonprofit postal policy, and Ive seen at least one member station of NPR on your membership list.

Mr. CONWAY: Thats right.

SIEGEL: Now, what ails the U.S. Postal Service as you see it? Is it the recession? Is it competition from the likes of FedEx and UPS? Is it email? Or is it all of the above?

Mr. CONWAY: Its primarily the email phenomena that has been coming on for about the last 10 years, coupled with the recession.

SIEGEL: Now, explain this to me. Last year at the postal service, the losses were worse than they were the year before. But in between they eliminated tens of thousands of jobs. Ive seen the figure - the equivalent of 65,000 jobs. If theyve done that much, how do they hope to turn things around or do they have any expectation of turning things around?

Mr. CONWAY: I think they think once the recession bottoms out and they are allowed to make a few major structural changes, I think they feel they can weather this and survive and perhaps be fairly healthy going forward.

SIEGEL: Whats an example of a structural change the postal service would like to make?

Mr. CONWAY: One major change, and these all involve the Congress, would be to change the payment obligations for the health benefit liability. And the second change is to eliminate Saturday mail delivery.

SIEGEL: Item number one, the issue with postal workers is that people who used to work there worked for the federal government and therefore its understandable that the Congress might chip in there and assume some of their retirement costs.

Mr. CONWAY: Well, federal employees and postal employees are still covered by federal retirement programs and health benefit programs.

SIEGEL: Now, I understand that the postal service could cut some costs by eliminating Saturday delivery. But doesnt it clash with our sense of the current business environment to say were going from 24/6 to 24/5?

Mr. CONWAY: Oh, its potentially a huge move. A gallop poll taken this summer showed the vast majority of Americans would accept giving up Saturday mail delivery if indeed it means not having to face postage rate increases.

SIEGEL: Which is considered the worst of all things and which your group obviously lobbies against very ardently. But the postal service has a chart on its Web site which says U.S. postage is the most affordable in the world. And it shows that a first-class letter here costs about half of what it costs in Austria, Germany or Sweden. Why not just double the price of postage and close the gap?

Mr. CONWAY: Well, the problem with that is its an elastic situation and the more the rates go up, the more mail volume goes away.

SIEGEL: Now, you said the postal service looks ahead to an end of the recession and writing its course. But the recession also claims enterprises. I mean, there are places that go under. The balance sheet looks like the postal service, but for our emotional claims on it would be such an enterprise.

Mr. CONWAY: No, I dont think so. Youre right, a lot of places have been claimed and there are a lot of organizations that are involved in the mail heavily that are facing very difficult times. But the postal service, its one of the cheapest, perhaps the cheapest system in the world.

SIEGEL: Some would say too cheap.

Mr. CONWAY: Too cheap, what some would say. Its highly reliable. Its a good system. The question is: Can it continue to be what its always been? And I think the answer is: No, it needs to adapt to the new world order.

SIEGEL: Mr. Conway, thank you very much for talking with us.

Mr. CONWAY: Thank you.

SIEGEL: Anthony Conway is the executive director of the Alliance of Nonprofit Mailers. And he worked for the U.S. Postal Service for many years before that.

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