- The Washington Times - Sunday, October 28, 2001

Neither rain, sleet, snow nor anthrax will stay the U.S. Postal Service from its appointed rounds, postal officials pledged last week after two District-based employees died and at least 13 others were sickened.
But as concern increases about anthrax spores sent by mail, the Postal Service might never be the same.
Even before the Sept. 11 terrorist attacks, the agency sought permission to raise postage rates a third time this year to make up for a $1.65 billion loss in the fiscal year that ended Sept 30.
Now, mail volume is dropping while new security measures raise the agency's costs and introduce technology to irradiate the life out of organisms carried by letters and parcels.
Rising postage costs and anthrax fears are making e-mail, faxes and on-line bill paying even more attractive for business and personal mail.
"We're not going to be defeated," Postmaster General John E. "Jack" Potter said Monday as he announced plans to install new technology to sanitize mail at processing centers.
Mr. Potter hinted at big changes ahead when he said, "It's clear to us, like other symbols of American freedom and power, that mail and our employees have become a target of terrorists. It is equally clear that we must take extraordinary steps to protect them both."

What lies ahead
The question for the $900 billion-a-year mailing industry, as well as the households, businesses and governments that depend on it, is how much the "extraordinary steps" promised by Mr. Potter will cost in time, money and quality of life.
In the first monthly accounting period since Sept. 11 covering Sept. 8 through Oct. 6 mail volume was down at least 5 percent.
"It's hardly ever gone down like that," said Robert Cohen, a Postal Rate Commission economist. "You have to go all the way back to the Great Depression. This is an astounding volume."
The Postal Service's critics in Congress view the war on terrorism as an opportunity to renew calls for postal reform.
"It's definitely going to create an even worse crisis for the Postal Service," said Robert Taub, chief of staff for Rep. John M. McHugh, New York Republican.
Mr. McHugh, former chairman of the House Government Reform Committee's subcommittee on Postal Service oversight, has proposed legislation to allow the Postal Service to use the kind of flexible pricing used by industry. Customers would receive discounts for sending large volumes of mail, which could help the Postal Service compete with private companies such as United Parcel Service.
The bill also would allow the Postal Service to reinvest profits.
"We've got a major problem here with this entity," Mr. Taub said. "This is the one and only government agency that touches the lives of all of us every day of the week."
The Postal Service operates 38,000 post office retail outlets and delivers to 136 million addresses daily on an annual operating budget of nearly $70 billion. The service's nearly 800,000 employees last year delivered 208 billion pieces of mail, almost half the world's mail volume. Only retail giant Wal-Mart is a bigger civilian employer.
The Postal Service's biggest expense is labor, which represents 78 percent of costs and which entails a biweekly payroll of just under $2 billion. Letter carriers' salaries range between $32,156 and $42,635.
Each of the agency's top three product lines correspondence and transactions, business advertising, and expedited delivery would qualify as a Fortune 500 company going by the revenue it generates.
Spending by the Postal Service can create or support smaller industries. "There are industries that are totally dependent on our Postal Service," Mr. Cohen said.
For example, the agency's use of machines to direct mail according to both bar code and handwritten addresses has been a major incentive for makers of computerized optical readers.
The Postal Service is the world's largest operator of alternative-fuel vehicles, spurring development of technologies using compressed natural gas and efficient batteries. Next year, the fleet is scheduled to grow to 30,000 such vehicles.
The Postal Service owned or leased 211,714 vehicles in fiscal 2000, the nation's largest nonmilitary fleet.

Rising to the occasion
Confusion created by the terror tactic of using the mail as a weapon is adding to calls for quick action.
"Certainly this is a highly difficult time," said Meg Ausman, the Postal Service's historian. "I think this is going down as the worst crisis we faced."
On a smaller scale, the Postal Service has had to cope with threats to its delivery system from occasional letter bombs since the early 1970s. The bombs would ignite by a chemical reaction when letters were opened, similar to a match lighting when rubbed against a coarse surface.
The Unabomber's murderous spree over more than a decade was one example. More often, the greatest threat to the mail system comes from petty criminals.
The U.S. Postal Inspection Service is the law enforcement arm of the Postal Service, responsible for ensuring the "sanctity of the seal" when patrons entrust their money, messages and merchandise to the mail.
In 1999, postal inspectors arrested 10,388 suspects for crimes ranging from mail theft, fraud and robbery to illegal mailings of drugs, bombs and child pornography.
The only situation similar to the anthrax scare occurred in the fall of 1888, when a yellow fever outbreak in Jacksonville, Fla., compelled the Postal Service to fumigate with smoke all mail leaving the city. A stamp clerk and one fumigator died before the outbreak ended.

Delivering America's story
The history and growth of the Postal Service is essentially the same as the history and growth of the United States.
In 1639, Richard Fairbanks' tavern in Boston was designated by the British government as the official repository for overseas mail.
When the Continental Congress named Benjamin Franklin as the first postmaster general in 1775, the United States was a weak confederation of colonies spread along the Eastern Seaboard. The postal system helped support the growth of commerce and bind the new nation together through the free flow of news and information.
During the westward expansion, the Pony Express kept communications open between East and West beginning in 1860.
In 1970, Congress transformed the Postal Service from a government agency to an independent corporation operated by the government. Although it is still part of the federal government, the service does not receive tax money to pay operating expenses. Expenses are supposed to be covered by fees charged for delivering mail.
Few in Congress want to return the Postal Service to a government agency, but several lawmakers want to deregulate it, hoping to introduce more efficiencies of the marketplace.
Only rarely does the Postal Service operate without a deficit. The last time was in 1999, when the economy was booming.
A year later, the economy slowed, resulting in the need for more Treasury Department loans. Before Sept. 11, the agency already was operating at close to its loan limit of $15 billion a year.
Net income fell $220 million after Sept. 11 through the first week of October because of the drop in mail volume. The attacks themselves cost the Postal Service another $63 million, much of it from destruction of the post office near the World Trade Center.
Some added costs are expected to be offset by a $175 million infusion of federal money authorized by President Bush last week. The governing board released another $200 million in emergency funding.
The money is supposed to be used to improve safety and security at postal facilities, such as the Brentwood Road mail-processing center in Northeast Washington where the two dead postal employees were exposed to anthrax.
Much of the new spending is to buy sanitizing devices that will irradiate mail with beams of electrons. At costs of as much as $8 million apiece, the initial bill for such equipment could reach $1 billion. The post office over the weekend signed a $40 million contract to buy eight of the devices to sanitize letters and packages.
The emergency funds were approved after requests from Mr. Potter, whose job as postmaster general has catapulted him from relative obscurity to nearly celebrity status on television nationwide because of the anthrax scares.
Mr. Potter joined the Postal Service in 1978 as a clerk in Westchester, N.Y. The Postal Service's governing board appointed him postmaster general five months ago. He retains his job until he quits or the governing board fires him.
"This is a war that obviously is taking place overseas but it is also being fought on American soil," Mr. Potter told reporters Tuesday. "We lost the firefighters and police officers up in New York and now the Postal Service people are on the front line in this war."
He will need all his skills as a labor negotiator to deal with the four postal unions now. The American Postal Workers Union is threatening to sue the Postal Service for what it says was an inadequate response when the anthrax threat to its 366,000 members appeared.
In New York, union leaders are encouraging workers to stay away from work until their facilities have been thoroughly tested for the bacteria.
The American Postal Workers Union told its members in an Oct. 19 online newsletter not to wear the gloves and masks the Postal Service gave them to protect against anthrax because they project a public image of fear. Instead, the union's newsletter recommended the employees wash their hands frequently.
The union backed off its no-gloves or masks policy when the employees died days later.
The Postal Service, in 1971, was the first government agency to win union representation.
Unions in the past have tried to prevent the introduction of new technologies to automate mail sorting that might eliminate jobs.

Warnings of death spiral
@$:One of the risks in the anthrax scare for the Postal Service is not disease, but the mail's "death spiral" that consumer groups have warned about for years.
As e-mail, faxes and private delivery companies such as Federal Express cut into the Postal Service's business, the agency's share of the nation's mail has dropped. To make up for the loss of revenue, the Postal Service raises rates, which makes the amount of mail drop again.
Under the death spiral theory, as the amount of mail drops, the Postal Service continues to raise rates until it loses so many customers that it becomes too expensive to continue operating.
On the morning of Sept. 11, the Postal Service's board of governors decided to seek a postage increase to 37 cents for first-class mail.
Afterward, the board of governors looked out their windows to see the Pentagon burning and evacuated their building.
Then the anthrax scare set in. The Postal Service has not determined how much the anthrax-laced letters will cost it, but officials know it will be high from new security measures to loss of business.
Meanwhile, direct-mail companies are cutting back on their mailings, and online bill-paying companies say business is up nearly one-third.
The direct mailers the companies that send the advertisements, magazines and catalogs are the Postal Service's biggest corporate customers, representing more than one-third of its business. The Christmas season, which is about to begin, is normally when they spend the most on mail.
"Mail is one of those things that works because you trust it," said Gene Del Polito, president of the Association for Postal Commerce, an Arlington organization representing companies that use mail for commerce. "If the people you are communicating with are reluctant to open or spend time with your messages, then the value of that medium is decreased."
He predicts businesses will turn even more quickly to electronic advertising and transactions.
"If those are the ways they find you are more receptive to the message they are sending, that's where they'll spend their dollars. That's nothing but bad news for the post office."
Mr. Cohen, the Postal Rate Commission economist, dismisses the death spiral theory as "overly dramatic."
Although mailings normally drop after rate increases, they always go back up to previous levels in the long run, he said. In addition, commerce depends on the Postal Service, nearly ensuring it will continue operating even in the worst circumstances.
"While they might have to raise their rates, they won't have to raise their rates to the point their finances can't stabilize," Mr. Cohen said. "Even if it were to shrink in volume, there are other post offices in the world that are smaller and they're still operating. They all have effective post offices."
Meanwhile, the terrorist attacks have stopped talk in Congress of deregulating the Postal Service. On that date, the security of the nation and its mail became a higher priority than economic efficiency.
"Under the circumstances, I don't think it's appropriate," Mr. Cohen said. "This is the time we want the Postal Service to be part of the government, not outside of the government."

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