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Saturday Mail Service May Be Cut By USPS
In an effort to curb anticipated shortfalls, the U.S. Postal Service may discontinue Saturday delivery service, cut down on overtime, raise postal rates, and layoff about 30,000 of its 596,000 employees. According to a new article on Reuters.com highlighted an announcement on precisely that subject by USPS CFO Joseph Corbet.
The recent proliferation of private delivery companies and the surging popularity of electronic communications are expected to reduce the volume of first class mail in 2010 by 10 billion pieces. By 2020, mail volume is expected to drop by 37 percent, leaving the UPSP with a potential revenue shortfall of $ 238 billion by that time. No level of debt management would make so much as a dent in a shortfall like that.
Losses, losses, and more losses
The postal service has been reporting net losses since 2007. Just last month, the first quarter of the fiscal year revealed a loss of $ 297 million. The competition created by FedEx and United Parcel Service, along with the increasing number of grocery stores and other retail establishments that now sell postage stamps and mail-related services, could soon cause post-office buildings to start boarding up.
Health benefits for retirees
The same Reuter's article highlighted that the Postal Service might be unable to meet an upcoming obligation of $ 6.6 billion this coming fall required to cover workers’ compensation liabilities and to fund retiree health plans. Payments were restructured by Congress last year, but no assurances are there for similar leniency this year.
Ruth Y. Goldway, Chair of the PRC
The chair of the Postal Regulatory Commission (PRC) Ruth Y. Goldway is not for cutting Saturday mail service. According to a recent post on CBSnews.com, Goldway believes that cutting Saturday delivery would threaten the monopoly status of the postal service and undermine “the vitality of the mail system.”
Postmaster General John E. Potter
Possibly as a strategy to obtain other concessions, Postmaster General John E. Potter is pushing to eliminate Saturday service. CBSnews.com opines Potter might believe the PRC and Congress are more apt to relieve the USPS from obligations for retiree health benefits than agreeing to reduce service.
The customer
It is certain that a postage rate increase will take place. Legal loopholes allow the USPS to make greater-than-inflation increases in extraordinary situations. This would probably qualify as an extraordinary circumstance by most criteria. Bear in mind that the U.S. postal rates are significantly lower than those in most other places around the world. By the same token, if you’ll be making any bulk mailings in the near future, the anticipated price hike is one more good reason to keep same day cash loans in mind.
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