Postal Regulatory Commission to Postal Service: Numbers Don’t Add Up, Try Again

Apparently presidential candidate Mitt Romney isn’t the only one who has trouble with math. For well over a year now the bean-counters at Postal Service headquarters in Washington, DC have tried to sell Americans a bill of goods–that the only way to save the Postal Service is by cutting service. The National Association of Letter Carriers and many others have argued that the numbers don’t add up and that closing rural post offices and mail processing plants, and eliminating Saturday delivery is not the route to take.

This past week the Postal Regulatory Commission (PRC) issued an advisory opinion supporting the arguments against those projected mass closings. According to the PRC, “The vast majority of mail processing savings…can be captured without significantly changing service.”

According to the report, the USPS’s plan for consolidation and the elimination of proposed services to the American public might save as little as $46 million and up to around $2 billion in annual savings IF all of the postal service’s “assumptions” prove to be correct.

Since postal management has a less than sterling record when it comes to assumptions, that’s a mighty big if.

The PRC has long questioned the agency’s push to save money by dismantling itself piece by piece. This latest study gives credence to those arguments against such a dismantling.

The PRC says in its advisory opinion that closing half of its mail facilities, closing thousands of post offices and doing away with Saturday delivery will not only result in delayed deliveries but it will also drive away advertisers and other mailers. This would result in a death spiral from which the postal service as we know it, would not survive. In other words, it would lead to privatization.

Lisa Bowes, writing for intelisent.com observes on her blog: “The USPS has a track record of manipulating and presenting biased data that supports whatever they are trying to push through, discarding and/or discounting data that does not support or further their agenda. I am not surprised in the least that the Commission net savings estimate are lower than those projected by the Postal Service, and I am of the opinion myself that they are far more grounded and in line with reality and fairness than the information provided by the USPS.”

Ron Bloom of Lazard, who currently serves as financial adviser to the National Association of Letter Carriers, writes in The Huffington Post concerning the 2006 congressional mandate that has caused much of the postal service’s financial woes: “The tragedy here is that this congressionally mandated ‘crisis’ is being used to support, not a thoughtful restructuring, but a dismantling of the Postal Service’s network–the very thing around which the Postal Service could be rebuilt. The Postal Service’s shrink to survive strategy–eliminating routes, closing post offices, stopping Saturday service and slowing mail delivery–will not work. It will only reduce mail use and mail volumes.”

Postal management says it is reviewing the PRC’s recommendations.

Although it would be an uncharacteristic move by management, we hope they will listen to the PRC’s voice of reason in this matter.

We should know soon.

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