Postal Service Plans for August Move to Five-Day Delivery Quashed for Now; Postal Reform Gets New Look in 2013
May 3, 2013
Two months after the Postal Service’s surprise announcement on February 6 that non-package mail would only be delivered five days a week starting on August 5, the Governors of the Postal Service on April 10 announced an indefinite delay of five-day delivery. Concluding that Congress had prohibited implementation of a new national delivery schedule by including restrictive language in the recently passed Continuing Appropriations Resolution, the Governors stated they would not implement five-day delivery until explicitly authorized by Congress. In light of the worsening financial condition of the Postal Service, the Governors directed management to seek to reopen contract negotiations with the postal employee groups to lower costs and to evaluate the option of an exigent postal rate increase to boost revenue.
The Postal Service surprised virtually everyone when it announced in February its intention to halt Saturday delivery of mail without Congressional approval. The Postal Service believed it could act unilaterally based on its own interpretation of a “rider” inserted in an annual appropriations bill since 1983, requiring the Postal Service “maintain delivery as in 1983.” The Postal Service had hoped that when Congress passed the latest continuing appropriations resolution that it would drop that provision, allowing the requirement to expire. Instead, Congress passed versions in both the House and the Senate continuing the requirement through September 30, 2013.
The passage of the new stop-gap spending bill made the path forward for the Postal Service and its five-day delivery plan uncertain. Initially, the Postal Service maintained that even though Congress had extended the rider, it still had the authority to move forward with the transition to five-day delivery. The Government Accountability Office (GAO) released a legal opinion soon after, stating the Postal Service did not have the legal authority to switch from six- to five-day delivery. Following a meeting of the United States Postal Service Board of Governors on April 9, the Postal Service announced its intention to comply with the Congressional intent and maintain six day delivery.
The Postal Service hasn’t given up on five-day delivery. On April 17, the House Oversight and Government Reform Committee held a hearing entitled “Options to Bring the Postal Service Back from Insolvency.” Mickey Barnett, Chairman of the Board of Governors, and Postmaster General Pat Donahoe both testified that the Postal Service sees a transition from six- to five-day delivery as critical to putting the Postal Service on a financially solvent and sustainable path.
Of immediate concern to Magazine Media and the entire mailing industry is the Governors’ direction to postal management to evaluate options for raising revenue via new postal rate increases – with special attention, it appears, to magazines and other types of mail that allegedly are not “covering their costs.” In an April 10 statement, the Governors said:
“Given these extreme circumstances and the worsening financial condition of the Postal Service, the Board has directed management to seek a reopening of negotiations with the postal unions and consultations with management associations to lower total workforce costs, and to take administrative actions necessary to reduce costs. The Board has also asked management to evaluate further options to increase revenue, including an exigent rate increase to raise revenues across current Postal Service product categories and products not currently covering their costs.”
With everyone in agreement that comprehensive postal reform is urgently needed, the four principals of the reform process – Sen. Tom Carper (D-DE), Sen. Tom Coburn (R-OK), Rep. Darrell Issa (R-CA), and Rep. Elijah Cummings (D-MD) – have been meeting to try to reach agreement on the key principles for postal reform legislation this session. It is likely that draft postal reform legislation developed by the four principals will differ – perhaps in major respects – from the legislation that failed to pass during the 112th Congress. MPA will continue to be a key player in the consideration and negotiation of all postal reform proposals.