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Separate bills that have passed House and Senate committees would give the Postal Service more authority and liquidity to stave off immediate bankruptcy. But prospects are somewhat dim for final congressional action on those bills any time soon, especially if the measures are seen in an election year as promoting layoffs and cuts to neighborhood post offices.
Technically, the Postal Service must await an advisory opinion from the independent Postal Regulatory Commission before it can begin closing local post offices and processing centers. But such opinions are nonbinding, and Mr. Donahoe is making clear the agency will proceed with reductions once the opinion is released next March.
“The things I have control over here at the Postal Service, we have to do,” he said, describing the cuts as a necessary business decision. “If we do nothing, we will have a death spiral.”
The Postal Service initially announced in September it was studying the possibility of closing the processing centers and published a notice in the Federal Register seeking comments. Within 30 days, the plan elicited nearly 4,400 public comments, mostly in opposition.
• Small-town mayors and legislators in states including Illinois, Missouri, Ohio and Pennsylvania cited the economic harm if postal offices were to close, eliminating jobs and reducing service. Small-business owners in many other states also were worried.
“It’s kind of a lifeline,” said William C. Snodgrass, who owns a USave Pharmacy in North Platte, Neb., referring to next-day first-class delivery. His store mails hundreds of prescriptions a week to residents in mostly rural areas of the state that lack local pharmacies. If first-class delivery were lengthened to three days and Saturday mail service also were suspended, a resident might not get a shipment mailed on Wednesday until the following week.
“A lot of people in these communities are 65 or 70 years old, and transportation is an issue for them,” said Mr. Snodgrass, who hasn’t decided whether he will have to switch to a private carrier such as UPS for one-day delivery. That would mean passing along higher shipping costs to customers. “It’s impossible for many of my customers to drive 100 miles, especially in the winter, to get the medications they need.”
• ESPN the Magazine and Crain Communications, which prints some 27 trade and consumer publications, said delays to first-class delivery could ruin the value of their news. Their magazines typically are printed at week’s end with mail arrival timed for weekend sports events or the Monday start of the workweek. Newspapers, already struggling in the Internet age, also could suffer.
“No one wants to receive Tuesday’s issue, containing news of Monday’s events, on Wednesday,” said Paul Boyle, a senior vice president of the Newspaper Association of America, which represents nearly 2,000 newspapers in the U.S. and Canada. “Especially in rural areas where there might not be broadband access for Internet news, it will hurt the ability of newspapers to reach customers who pretty much rely on the printed newspaper to stay connected to their communities.”
• AT&T, which mails approximately 55 million customer billing statements each month, wants assurances that the Postal Service will widely publicize and educate the public about changes to avoid confusion over delivery that might lead to delinquent payments. The company also is concerned that after extensive cuts the Postal Service might realize it cannot meet a relaxed standard of two-to-three day delivery.
Other companies standing to lose include Netflix, which offers monthly pricing plans for unlimited DVDs by mail, sent one disc or two at a time. Longer delivery times would mean fewer opportunities to receive discs each month, effectively a price increase. Netflix in recent months has been vigorously promoting its video streaming service as an alternative.
“DVD by mail may not last forever, but we want it to last as long as possible,” Netflix CEO Reed Hastings said this year.
Sen. Susan Collins, Maine Republican and the ranking member on the Senate committee that oversees the post office, believes the agency is taking the wrong approach. She says service cuts will only push more consumers to online bill payment or private carriers such as UPS or FedEx, leading to lower revenue in the future.
“Time and time again in the face of more red ink, the Postal Service puts forward ideas that could well accelerate its death spiral,” she said, urging passage of a bill that would refund nearly $7 billion the Postal Service overpaid into a federal retirement fund, encourage a restructuring of health benefits and reduce the agency’s annual payments into a retiree health account.
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