USPS Board Exploring Cost-Cutting Measures

WASHINGTON, DC—The Postal Service Board of Governors met last week to discuss a wide range of accelerated cost-cutting and revenue-generating measures in the face of what it terms an unprecedented set of financial challenges, heightened by the inability of Congress to pass comprehensive postal legislation.

Citing the fact that the U.S. Postal Service (USPS) cannot wait indefinitely for legislation, the board of governors has directed management to accelerate the restructuring of Postal Service operations to further reduce costs in order to strengthen its finances. Specifically, the board approved restructuring initiatives and also instructed the USPS to revise its 2012 five-year comprehensive plan to account for current financial and liquidity conditions.

The USPS is currently implementing major cost reduction efforts throughout its retail, delivery and mail processing operations. Since 2006, the organization has reduced its annual cost base by approximately $15 billion and reduced the size of its career workforce by 168,000 people, or 24 percent. During these cost-cutting initiatives, the USPS says it continued to deliver record levels of service to its customers.

Despite achieving record growth in its package business and stabilization of other revenues, the Postal Service continues to operate with an inflexible business model that hinders its ability to be self-sufficient. In Fiscal Year 2012, it was forced to default on $11.1 billion in mandated payments to the U.S. Treasury, which contributed to a recorded loss of $15.9 billion.

The USPS continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue, and encourages the 113th Congress to make postal reform legislation an urgent priority.

  • Pip

    Why hasn’t the Board of Govenors looked at the management ‘over load’ that the UPSP has forstered.
    The entire business model and systems has been created to keep those managers who manage managers employeed.
    The cost cutting doesn’t need to be the carriers, it’s the manages who need to be re-organized. The organization is riddled with managers, managing managers. The lower and middle managenment as well as some upper managemnt needs to be looked for a conmplete redesigned. That will save hundreds of millions if not Billions and won’y effect the delivery of the mail at all.

  • Joe Chyle

    Why is no one talking about the billions Congress makes the USPS pre-pay into retirement funds many years in advance for workers who are not even hired yet. No private business could sustain those mandates. Congress seems bent on deliberately destroying the postal service.
    The Post Office was created by our forefathers as a service to the people. It is one service that virtually everyone uses. But there are certain congressmen that would like to see the USPS destroyed.