In Washington, two clocks are ticking. The clock associated with the debt limit will hit zero days, zero hours, zero minutes and zero seconds on August 2. The clock associated with the Postal Service will hit the same point next year.Earlier this year, Postal Service CFO Joseph Corbett stated that the Postal Service's zero hour will come in July 2012. However, he noted that the date could come sooner or later depending on Congressional action, changes in economic growth, and changes in operating cost factors.
CFO Corbett's projection of a July 2012 shutdown date required the Postal Service to stop making its FERS annuity payments and default on its legal obligation to make a payment to fund its retiree health care liability. He also assumed that the Postal Service will make changes in its retail and processing network currently under consideration as expeditiously as possible. Finally, he assumed that the Postal Service could fully take advantage of the cost savings derived from the APWU contract, including cost savings that will affect Supervisors and Postmasters as soon as the law permitted.
What CFO Corbett, did not expect when he made his May, 2011 projection of a July, 2012 Postal Service shutdown was the slowdown in the U.S. economy. Friday, Reuters reported that Goldman Sachs issued its second downward revision to economic growth since CFO Corbett's pronouncement. The projection of economic growth has dropped from 4.0% to 1.5% in the quarter just ended (the 2nd quarter 2011) and its forecast for the 3rd quarter has dropped its GDP growth projects from 3.5% to 2.0%. Goldman stated that it is currently reviewing its forecasts for the 4th quarter and beyond which suggests that it is not willing to make a projection beyond the current calendar quarter right now.
Goldman is not optimistic regarding employment growth either as it projects that the unemployment rate will be 8.75% at the end of 2012. The unemployment rate projection suggests minimal change in employment levels over the next 18 months.
Today, the mix of mail makes the Postal Service highly sensitive to changes in the economy and that sensitivity grows as it loses market share in the delivery of recurring bills and payments. The dramatically lower forecasts of economic growth and higher forecast of unemployment suggest that CFO Corbett was highly optimistic in assuming the Postal Service would have sufficient cash to continue operations through July 2012. The slower economic growth suggests that a new projected shutdown date will fall in the Spring of 2012. CFO Corbett needs to tell postal stakeholders now what his current forecast projects.
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13 comments:
The USPS needs to let someone else do the mail processing part at the large centers, similar to the way Fed Ex processes priority mail for USPS. Equipment, buildings, vehicles should all be sold with the exception of carrier delivery offices. USPS will still have each local post office for customers to transact business and carriers will still deliver the mail. The USPS goes a good job at each local office but a terrible job as processing the mail.
Fire all and everyone in the PO so when you rehire, you leave out the stiffs!!!!There is one too many milking the PO !!!!!
do away with sick leave. there are too many people who think it is their right to call in sick when ever they want to
Decide exactly how much the Federal Government owes the USPS for prior retirement overfunding and give back to the USPS- somewhere between $50-75 Billion Dollars.
Repeal the 2006 prefunding bill passed by Congress asking for another $3-$6 Billion a year for the future retirements.
Pay back the Congress mandated OIG group funding passed in 1996 to the tune of $100-140 million a year since that time.($2 Billion +)
Do away with SOX, since the USPS is not SEC mandated.
The issue of employees, post office closings, etc would be mute, with just the elimination of the first item. Without these items, the USPS has made a profit since 1996 forward. The people of the United States have been fed a line and the actual workers in the organization are taking the brunt of the current crisis.
Fed Ex doesn't process priority mail for the Postal Service. That is what the L&DC does. The USPS is not without fault on the way it does buisiness, but people who don't have the facts about how things work make it look worse than it is. I don't think you realize all of the knowledge involved in processing letter mail other than running it through a machine.
The USPS is in another phase of existence. The origin of hearlds or messangers to carry messages has advanced through time from swining through trees, walking, horseback-camel riding, advancements in auto transportation, airline delivery to the present state of advanced technological communications as the computer which led to the INTERNET for instant communications and progressive adancements will continue. The USPS must change to survive as the reason for its existence in connecting has ceased and will continue to do so as the term is GO GREEN or paperless. USPS is a useless giant whigh must down sized in post offices, employees, real estate, reduce delivery days. Business model should be changed to parcel and air freight delivery comparable to FED X, UPS, ATSG and other similiar firms. Delivering JUNK MAIL 5-6 DAYS A WEEK IS A COST ADDED TO MASSIVE DEBT even if 5.3 billion for retirees health benefits was eliminated. The MAIL DELIVERY MARKET HAS NO POTENTIAL TO PAY FOR THE SERVICE. SERVICE? A JOKE!
They could save a heck of a lot of money by just eliminating the COR program that they insist on using to adjust carrier routes. It is a extremely expensive way of adjusting routes that always ends up making the routes too long. Just because you paid some astronomical price for this program doesn't mean you have to keep using it when you realize it's worthless. Cut you losses and make route adjstments in a logical fashion using information from people that actually know the territory. Just one example of this system's ineptitude: I have a route that COR set up. One of my splits involves deadheading the even side of a park and loop split early in the delivery day. About three hours later, I come back and deadhead the other side of the street. Carriers and supervisor are not allowed to make any changes to what COR says about how the route should be done, so we're stuck with what this system tells us to do even though it wastes money on a daily basis. Apparently the supervisors are also not allowed or are scared to provide real, unfiltered feedback to the higher ups that insist that we use this system. Every one on the front lines that has to put up with the results of this program admits that it is a complete failure, but they won't dare tell the "leadership" anything about it.
not to sure who also reads this besides people who work for the post office.but do you know that we delivery ups and fed x packages.they get dropped of at the post office and we delivery to all the places they dont.if we didnt they would not deleivery to those places without a big $$$$$$ add on fee.
I'm so sick and tired of hearing all these so called experts telling us what the postal service needs it needs for congress to get it's act together and ouit misleading the public on all of the postal service problems which they have caused. there afraid to pass a bill to cut the postal services retirement obligations,for they would have to figure out another to come up with 5.5billion dollars to use somewhere else.
The Postal Service is not losing money, for some unknown reason congress made the Postal Service pay too much money into employee retirement agencies CSRS and FERS, no other Federal agency or company in America is required to do this, if that overpaid money was back in the P.O. bank account there would be no financial crisis, there are people who would like to see the P.O. privatized so rich people would profit from the P.O. instead of the workers getting a decent wage and benefits. Believe me for whatever reason, a big hoax is being played on the workers, customers and beneficiaries of the service trying to make it appear that the P.O. is losing money, they have been overpaying money until recently when they stopped paying into these accounts. The Postal Service does not recieve Tax Dollars we are self sufficient.
Have the managers get the PTF workers off the clock when there is nothing to do. The full time people can do the job. They are paying people for nothing, and wasting money. Watch your workers. Be sure things are done efficiently. Some of the workers are not instructed to a better efficient implementing the duties. The Manager at my office doesn't manage.
Congress is so much a big part of the postal service's problem. Doesn't anyone know how to manage money anymore? The USPS does an excellent job in mail processing and delivery. And yes the USPS receives mail from DHL, Fed-Ex, and UPS to deliver to the places that these carriers don't. Also the USPS specializes in having horrible management at all plants. We have Supervisors and Managers that claim we are losing money but at the same time management is using overtime money and hours like Paris Hilton uses her dad's money. And the postal service carries a lot of dead weight employees who refuse to do an honest day's work but always expect a paycheck every 2 weeks. And yes...there are a lot of employees that abuse their sick leave benefits...but the postal service can't get rid of them. Then there is the recent retirement of Ex-Postmaster Potter to the tune of $3 million dollars. That was a rip-off in itself. The USPS could use a lot of house-cleaning before all is lost.
How about just implementing the clause for a layoff of the people not reaching the 6 year mark, That would be a great start. The new employees make about 1 dollar less than those who have put in over twenty years. They have a long way to go the reach retirement age and they shouldn't make near the same as a veteran employee. There were at last publication over 16,000 employees who could be laaid off sacrifice those to save the majority and the postal service itself.
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