Mailers Laud Postal Cutbacks

Posted on by Chief Marketer Staff

Mailers’ groups favor the U.S. Postal Service’s plans for cost cutbacks with its income and volume losses but feel it could do more. Still, they applauded its Board of Governors’ apparent endorsement of a negotiated settlement of the current postal rate case.

The USPS said it will cut up to 20,000 jobs this year to help make up for the loss of 2.8 billion pieces of mail during the quarter ended Nov. 30. “Twenty thousand jobs is just a drop in the bucket considering the USPS has 800,000 employees,” said Jerry Cerasale, Direct Marketing Association senior vice president of government affairs.

The mail volume decline is a 5.5% drop from last year and what the Postal Service described as one of the steepest decreases in recent history.

Of this total, Standard (advertising) Mail led the pack, reporting 2.2 billion fewer pieces than last year. First class mail dropped 550 million pieces below last year’s volume for the same period.

On top of that, the postal service posted $108 million in net income for the quarter, a figure that was earlier projected to be as high as $521 million.

These job cuts come on top of 11,600 positions cut last year when the postal service lost $1.7 billion for the fiscal year ended Sept. 30.

“I hope that the 2.2 billion-piece decline in advertising mail will force the USPS to see how important both nonprofit and for-profit advertising mail is to them,” said Neal Denton, executive director of the Alliance for Nonprofit Mailers. “And if they don’t, a lot of this 2.2 billion-piece decline won’t come back.”

Despite the volume drop, Cerasale is still concerned that postal costs continue to rise. He said the USPS should consider closing plants and making other more drastic cuts, especially with such a precipitous volume drop.

Meanwhile, the BOG has tentatively endorsed he concept of a negotiated settlement of the current rate case and must be placed before the Postal Rate Commission for further consideration.

Package rates may be raised 8%–perhaps by June 30. A first class stamp will also go up to 37 cents from 34 cents, if the Postal Rate Commission approves the increases.

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