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The Fight To Save The U.S. Postal Service

Oct 1, 2011
Originally published on October 2, 2011 12:49 am

More than half a million people work for the U.S. Postal Service making it the seventh largest employer in the world. But like a lot of other businesses, this one is being hit hard by the tough economy and transformed by the Internet.

Just in the last four years, mail volume is down 20 percent, so the agency is struggling to reinvent itself. But change isn't easy. Postmaster General Patrick Donahoe went to Congress to ask for help. His plan, which has been endorsed by President Obama, could mean layoffs, post office closings and the end of Saturday delivery.

Republican Rep. Darrell Issa of California blames the leaders of the Postal Service for its problems and wants the service to be under tighter controls. He says the agency's $15 billion in debt — its credit limit — is a sign that they have "more than a small cash-flow problem."

Issa's plan would create a "control board" that could, among other things, renegotiate union contracts. Democratic Sen. Tom Carper of Delaware, who chairs the Senate subcommittee that oversees the Postal Service, agrees that there's a problem with the Postal Service, but the solution he's proposing is very different.

"Part of what we need to do is to enable the Postal Service to take the steps that are appropriate [and] right-size their enterprise for the 21st century, much like the auto industry did a couple of years ago," Carper told Rachel Martin, guest host of weekends on All Things Considered.

One of the Postal Service's current complications is 2006 legislation that says the agency must set aside $5 billion to $6 billion a year to have on hand to pay for health benefits for retiring employees. Carper says almost no state or local governments — and very few private companies — do that.

Carper says the Postal Service may have overpaid into its pension plans — and he wants to see that money used to fund the retiree health benefits.

"The money could be drawn down from one of the overpayments and used over a number of years to prepay retiree health benefits for pensioners," Carper says.

Either way, Carper says, the Postal Service cannot continue to do business as usual.

Thinking Globally

So are there other models that might work for a retooled U.S. Postal Service? James Campbell, co-editor of the Handbook of Worldwide Postal Reform, says yes.

"In general, other countries have looked at this situation and decided [they] have to allow the post office to become more commercial and make them become commercial," Campbell says.

He cites postal systems in Germany, Sweden and New Zealand that have allowed their post offices to become more profitable, more commercial and more customer-oriented in order to survive.

Germany in particular has rethought its transportation network, sorting systems and has expanded globally. In 2002, Deutsche Post, Germany's postal service, bought a leading international transportation company, DHL.

"Their view is that the express business and package business is a global business," Campbell says.

The U.S. Postal Service is beginning to act more commercial through partnerships with FedEx and UPS, Campbell says. It's a natural partnership because FedEx has an excellent collection system, while the Postal Service has a great household delivery system.

Post offices are another area where other countries have streamlined. In countries like Britain or Germany, there are very few traditional post offices. Almost all post offices are operated by small businesses or retail stores.

"They find that they wind up providing better service [and] longer hours at lower cost by this sort of a system," he says. "It's possible to imagine in the U.S. that the post office adapts and transforms into another useful, important operation — but it's not going to be a carrier of letters and sentiments."

The Rural Post

Though trimming the number of post offices in the U.S. might save the Postal Service money, the loss could be felt in other ways.

Tom Gamble has been a mail carrier 24 years. He works a route in Youngstown, Ohio. Gamble is also the president of the state's Association of Rural Letter Carriers.

Gamble says the loss of post offices in rural communities would have a devastating effect there.

"There are a lot of people in the rural community that rely heavily on the post office," Gamble says, "we carry feed, livestock, seed — a lot of things that the rural community depends on."

Gamble has delivered everything from baby chickens to rabbits and even crickets to rural customers. He says for some folks in rural communities the postal carrier might be the only person they see for weeks.

"There are countless stories of carriers that have been looking out for some of their older customers and saved the lives of customers because their mail started to build up the mailbox," he says. "We kind of keep an eye on the neighborhoods."

Gamble says as the Postal Service evolves and the pressure builds to do more in less time, carriers have less time to communicate with their customers. He says he feels like he's part of the family with some customers, but that could all start to change.

"I know who's in trouble and who's not, just by the mail that comes out. I know who's having a birthday and who's lost a loved one," he says. "You just can't replace those kinds of things."

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RACHEL MARTIN, Host:

This is ALL THINGS CONSIDERED from NPR News. Guy Raz is away. I'm Rachel Martin.

We'd like to start today by introducing you to Tom Gamble.

TOM GAMBLE: I'm a mail carrier with the U.S. Postal Service on my 24th year. My route is in Middletown, Ohio. It's just a little over 26 miles, but it takes about four and a half hours to sort it and about four hours to deliver it. The biggest reward, I think, is probably the relationships you develop with your customers.

Some of the older people and the retired people definitely on a first-name basis. In very isolated areas, sometimes in the course of a week, the mail carrier might be the only person customers will see. There's countless stories of carriers that have been looking out for some of their older customers, some of the ones they know are frail and saved the lives of customers because their mail started to build up in the mailbox.

We kind of keep an eye on the neighborhoods. We know who the kids are, where they should be, where they shouldn't be. Unfortunately, as things have progressed here with the Postal Service, there's more and more pressure to do things in less and less time, so we have a little less time to communicate with our customers.

MARTIN: That's today's cover story, checks in the mail: fixing the U.S. Postal System.

(SOUNDBITE OF MUSIC)

MARTIN: More than half a million people work for the U.S. Postal Service. It's the seventh largest employer in the world. And like a lot of businesses, this one is being transformed by the Internet. Just in the last four years, for instance, mail volume is down 20 percent. So the Postal Service is struggling to reinvent itself, but change isn't easy. Thousands of post offices may have to be shut down.

The Postmaster General, Patrick Donahoe, went to Congress recently to ask for help. This week, postal workers rallied against possible closures.

(SOUNDBITE OF PROTEST RALLY)

UNIDENTIFIED GROUP: We don't want a bailout. We want to get the mail out.

MARTIN: Donahoe's plan, which President Obama has endorsed, could mean layoffs, closures and an end to Saturday delivery. Fifty years ago, the Postal Service had a very different kind of problem.

(SOUNDBITE OF MUSIC)

GROUP: (Singing) They got more mail than ever before.

UNIDENTIFIED WOMAN: (Singing) It's wrapped in bags, stacked on shelves.

GROUP: (Singing) There's hardly room for anything. There's been a mail explosion.

MARTIN: Back in the 1960s, the Postal Service was pushing a new idea, zip codes as a way to organize delivery of all that mail. Today, the new ideas to save the post office don't really fit in a jingle.

In Congress, Representative Darrell Issa, a Republican from California, wants the service to be under tighter controls. Issa would create a control board that could re-negotiate union contracts. And he blames the leaders of the Postal Service for its problem.

DARRELL ISSA: They have gone the wrong way. They have gone from having no debt to having 15 billion in debt, which was their debt limit, and 5.5 billion that they can't pay that's due in a few days. That tells us, as a businessman, that no matter what they say, they have more than a small cash flow problem.

MARTIN: Senator Tom Carper, a Democrat from Delaware, agrees there is a problem. But the solution he is proposing is very different.

TOM CARPER: Part of what we need to do is to enable the Postal Service to take the steps that are appropriate is they right-size their enterprise for the 21st century, much like the auto industry did in this country a couple of years ago.

MARTIN: You talk about how the Postal Service actually does something a little different and sets aside payments for health care benefits for retirees. How has that made things complicated for the Postal Service?

CARPER: Well, the Postal Service's complication doesn't have to set aside money for the health care benefits for their future retirees, almost no state or local government does that. Very few (unintelligible) private companies do that. Under the 2006 legislation, the Postal Service has to set aside each year a lot of money, $5 to $6 billion to have at the ready when their folks retire and need health care benefits.

And we've said for sometime that there is a possibility that Postal Service has overpaid money into two pension plans. And to the extent that that actually turns out to be the case, the money could be drawn down from one of the overpayments - one of the overpayments repaid and that money used over a period of five or six years to prepay health, the retiree benefits for pensioners.

MARTIN: And should the post service be out to make a profit? I mean, that's what corporations do. That's what happens in the private industry.

CARPER: What would be, I think, desirable is for the Postal Service, over time, to be able to do at least to break-even the operation, which would mean in some years, with an up economy, more business. But unfortunately, if we put the Postal Service on auto-pilot, (unintelligible) the Postal Services online to run up deficits for about another $225 billion over the next years. Again, their line of credit is only $15 billion, so they cannot continue to do business as usual.

MARTIN: That's Democratic Senator Tom Carper. He joined us from New Castle, Delaware. Senator, thanks so much for taking the time.

CARPER: Great to be with you today.

MARTIN: So what model would work for the U.S. Postal Service? We posed that question to James Campbell. He is co-editor of the "Handbook of Worldwide Postal Reform." So he thinks about these issues a lot, and he says the U.S. could learn lessons from postal systems in other countries.

JAMES CAMPBELL: What's happened in other industrialized countries is very similar to the situation here, at least in terms of the decline in mail. In general, other countries have looked at this situation and decided we have to allow the post office to become more commercial, and we have to make them become commercial. And the post offices in other countries have become more profitable, more commercial, more customer-oriented and so on.

MARTIN: Which countries are doing that well?

CAMPBELL: I would say maybe Germany, Netherlands, New Zealand, Sweden, Norway.

MARTIN: In Germany, what does the postal service there look like?

CAMPBELL: They have, in effect, rethought what the post office does. They have reorganized their transportation network, their sorting systems and how they move the mail.

MARTIN: So they've invested more money.

CAMPBELL: They've invested more money. They have also expanded globally. Their view is that the express business, the package business is becoming a global business, which is probably true, and so they bought DHL, one of the leading international express companies, and they have become a leading international transportation company.

MARTIN: So DHL, when I send a package through DHL, that's the German post service (unintelligible)?

CAMPBELL: The Deutsche Post, right. And in fact, the mail business for them is only a minority of their business.

MARTIN: The Postal Service has access to almost every single American, anyone with a mailing address. That's a pretty awesome commodity for some kind of corporation to take advantage of and defined lines of transit, infrastructure. If you just gave that to a corporation, some kind of entrepreneur and said, make this, do it as what you will. What would come out on the other end?

CAMPBELL: The Postal Service is beginning, although it may not be obvious on the outside. But the Postal Service is beginning to act more commercially. So for example, Federal Express now provides the air transportation for their letters and priority mail. And in addition, Federal Express has a partnership with the post office, which the FedEx people call Smart Post. They deliver to the post office a million packages a day, which the Postal Service delivers. And what's going on there is FedEx has a very good collection system, but for them to deliver to household residences is expensive. The Postal Service has a great household delivery system. It's a national partnership. UPS is also working with the post office in the same way.

MARTIN: If our postal system is revolutionized to the point where it is drastically streamlined, what changes for consumers in this kind of new era of postal service?

CAMPBELL: If you look at foreign posts, they have tended to drastically reduce the number of post offices. The British post office now operates - I think it's less than 5 percent of their offices. All the other post offices are operated by local businesses, by Kmart, you know, Wal-Mart or by 7-Eleven or, you know, you know, they're located in what was virtually the old general store. They find that they wind up providing better service, longer hours and lower costs by this sort of a system, all right? It is possible to imagine in the United States as in other countries that the post office adapts and transforms into another useful, important sort of operation, but it's not going to be the carrier of, you know, letters and sentiments and Aunt Minnie's thank you notes.

MARTIN: But Aunt Minnie still needs a way to get her thank you notes...

CAMPBELL: I know.

(SOUNDBITE OF LAUGHTER)

MARTIN: ...to her people. That's Jim Campbell. He's a postal policy consultant and co-editor of the "Handbook of Worldwide Postal Reform." Jim, thanks so much for being with us.

CAMPBELL: My pleasure. Thanks.

MARTIN: But folks like Tom Gamble, remember he's the mail carrier from Ohio we heard from earlier. He says closing post offices will take a toll on rural communities. He's also the president of the state's Association of Rural Letter Carriers.

GAMBLE: There'd be a devastating effect on them. For instance, if I go to an address with a parcel that has to be signed for and they're not there, I leave them a notice and take it back to the post office. That may be 60 miles for that person to drive to get to that post office. There are people that rely heavily in the rural communities for them. We carry livestock, we carry feed, we carry seed, a lot of things that the rural community depends on.

MARTIN: You mentioned livestock?

GAMBLE: Yes. Oh, yeah. We carry baby chicks, rabbits, down to crickets.

MARTIN: In boxes?

Yes.

I guess they have to move from one point to the other somehow.

GAMBLE: Yes. Uh-huh. They can - when you're driving and you're hearing all that peeping for three and a half hours, it can be a little...

(SOUNDBITE OF LAUGHTER)

GAMBLE: ...a little testy, but we get it there.

MARTIN: But I imagine at this point in your career, nothing surprises you.

GAMBLE: Oh, no. No. Even the greeting cards that keep singing to you while you're driving.

(SOUNDBITE OF LAUGHTER)

MARTIN: When people find out that you're a mail carrier and have been a mail carrier for so long, are there a couple of stories that you always tell?

GAMBLE: I like to tell people that it's a good job and we all enjoy it. It may seem a little farfetched, but you feel like you're part of somebody's family because there's a lot you can tell from somebody's mail. I know who's in trouble, who's not, just by the mail that comes out, who's having a birthday, who's lost a loved one. And you just can't replace those kinds of things.

(SOUNDBITE OF MUSIC)

MARTIN: That's Thomas Gamble. He's a rural postal carrier in Youngstown, Ohio and president of the state's Association of Rural Letter Carriers. He joined us from member station WYSU in Youngstown, Ohio. Mr. Gamble, thanks so much for talking with us. It was a pleasure.

GAMBLE: Well, I appreciate the opportunity. Thank you. Transcript provided by NPR, Copyright NPR.