''What the U.S. Postal Service Default Really Means''

From Bloomberg

''The U.S. Postal Service essentially went broke today. It skipped a $5.5 billion payment to the U.S. Treasury for future retiree health-care payments and said it would do the same early next month when another $5.6 billion is due. This comes as no surprise. The USPS has been losing $25 million each day, due in large part to the decline of first-class mail. But the service—which dates back to the days of Ben Franklin—now finds itself in uncharted territory.''

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''Post Office Plans 35,000 Cuts as Plants Shut''

"The U.S. Postal Service, which predicts an annual loss of $18.2 billion by 2015, plans to eliminate 5.4 percent of its workforce by closing almost half of its mail-processing facilities to cut costs.

The service plans to shut 223 of its 461 mail-processing plants by February 2013, Postmaster General Patrick Donahoe said in a telephone interview today. The closings will cut about 35,000 jobs, said David Partenheimer, a Postal Service spokesman."

from bloomberg...

''USPS reaffirms plans to cut 28,000 jobs''

from federal times.....

"The U.S. Postal Service on Monday reaffirmed plans to close up to 252 of its 461 mail processing plants in the next year and slash 28,000 jobs from its payroll.

The move also includes scrapping its next-day delivery standard for first-class mail.

"The fact of the matter is our network is too big," Dave Williams, USPS vice president for network operations, said at a Monday news conference. "We've got to make adjustments today"..........READ MORE

''Facing bankruptcy, US Postal Service plans unprecedented cuts to first-class mail next spring''

from chicago tribune....

"Unprecedented cuts by the cash-strapped U.S. Postal Service will slow first-class delivery next spring and, for the first time in 40 years, eliminate the chance for stamped letters to arrive the next day.

The estimated $3 billion in reductions, to be announced in broader detail later Monday, are part of a wide-ranging effort by the Postal Service to quickly trim costs and avert bankruptcy. They could slow everything from check payments to Netflix's DVDs-by-mail, add costs to mail-order prescription drugs, and threaten the existence of newspapers and time-sensitive magazines delivered by postal carrier to far-flung suburban and rural communities"......READ MORE

'Postal service looks at cutting overnight delivery, processing centers'

from chicago tribune....

"Delivering First Class mail in two to three days instead of one to three days could save about $3 billion by 2015, the agency said. The change would allow it to close facilities, cut back on overnight work and eliminate about 35,000 jobs.

"Our entire network was designed based on a requirement that we maintain the capability to deliver First Class mail the next business day," said chief operations officer Megan Brennan'........READ MORE

'If America can't even reform its post office we're all in trouble'

from the telegraph.........

"The US has had plenty to choose from. There's the national debt clock in Manhattan that manages to tick relentlessly higher whatever the weather. Then last month's debt ceiling debacle saw a fresh line in these clocks break out on newspaper websites like a rash – all competing to count down to an unprecedented and ugly default by the US government.

Now September has handed Americans yet another. It sits on a website called postal.oversight.house.gov that was established by Darrell Issa, a Republican Congressman from California. At the time of writing, it tells readers that there are 23 days, 11 hours, nine minutes and 20 seconds until the US Postal Service defaults. So what, you might ask. As apocalypses go, a financial headache at America's post office doesn't have much on, say, the collapse of the euro or a second meltdown on Wall Street"..............READ MORE

'Postmaster seeks major savings, warns on Saturday delivery'

no junk mail on saturday.......yippie..........from usatoday........

"As part of a $1.5 trillion deficit-reduction package it will present in the coming weeks, the White House says it plans to present a financial rescue plan for the Postal Service, The Washington Post reports. 


The Obama administration wants Congress to grant a 90-day extension so the USPS can pay mandatory annual retirement payments totaling about $5.5 billion and give negotiators time to work out a possible rescue. 


Meanwhile, Postmaster General Patrick Donahoe told the USA TODAY editorial board today that falling mail volume and soaring red ink may soon doom Saturday mail delivery and prompt three-day-a-week delivery within 15 years"................READ MORE

'Postal Service will be insolvent by next August, deputy PMG says'

from federal times..........

"The U.S. Postal Service will be broke by next summer even if it skips an upcoming $5.5 billion payment for retiree health care, its No. 2 leader said Thursday.

"We're really up against the wall here in terms of stabilizing the finances of the Postal Service," Deputy Postmaster General Ronald Stroman said in an interview with Federal Times.

The health care "prepayment," due Sept. 30, is mandated under the 2006 Postal Accountability and Enhancement Act to ensure coverage for future USPS retirees. The Postal Service, which is losing profitable first-class mail volume faster than expected, has so little cash on hand that it cannot make any of that payment, Postmaster General Patrick Donahoe said Wednesday"................READ MORE

'Postal Service considers cutting 120,000 jobs'

from politico........

The financially strapped U.S. Postal Service is considering cutting as many as 120,000 jobs.

Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.

Congressional approval would be needed for either step and both could be expected to face severe opposition from postal unions which have contracts that ban layoffs.

The post office has cut 110,000 jobs over the last four years and is currently engaged in eliminating 7,500 administrative staff.

But the loss of mail to the Internet and the decline in advertising caused by the recession have rocked the agency"...........LINK

'No Saturday Mail Any More?'

from the new american.......

"One of the few areas of federal activity was the establishment and operation of a postal system, and the Postmaster General was a very important federal official. This constitutionally-sanctioned, income-generating operation ought to be the federal government at its most efficient and most economical. Perhaps it is, but that only emphasized just how bloated and inefficient that the federal government has become that Postmaster General Patrick Donahoe has said that Saturday deliveries may soon end and that within 15 years there may be postal deliveries only three days a week.

He bases that projection on the $8.3 billion loss that the Postal Service operated at this year. “On September 30, 2011, I won’t be able to pay my bills. ... At some point, we’ll have to move to three days a week of mail delivery, possibly in 15 years.”  Not surprisingly, one of the big ticket items that the Postal Service is grappling to pay is a $5.5 billion payment due September 30 to cover future retirees' health benefits. Ending Saturday deliveries, Donahoe said, would save $3.1 billion a year. 

Predictably, the Postal Service cites email and other electronic communications as the big obstacles. But interestingly, the class of mail in which emails are in closest competition, the inexpensive and no frills standard mail, has been relatively stable in volume. During the mid-2000s this sort of mail actually peaked in volume, surpassing levels in the early part of the decade. The year 2007 was the high water mark, with 103.5 billion of these forms of mail delivered. The Post Office had to compete with the telegraph once, too. Businesses always have to compete with not only with each other but with change in the business environment.

This sort of explanation also does not explain why firms such as UPS and FedEx continue to be profitable operations. These companies have to drive much farther between deliveries because, unlike the Postal Service, private companies must respond to specific customer requests for delivery. These companies compete with email, just as successful private retail firms compete with Internet sales of goods. Technological information requires that private corporations continually update their business operations, and these companies do so profitably"...............READ MORE

'Postal Service to consider closing thousands of new post offices'

oh boy............from wapo.......

"The U.S. Postal Service is launching a major review of up to 3,600 post offices across the country for possible closure as it shrinks its network in light of declining mail volume.

On Tuesday, Postmaster General Patrick Donahoe will release a list of post offices to be studied for closing, as well as announce “a new concept” for possibly replacing them, postal officials said Wednesday.

The Postal Service is expected to file a request with regulators within days for a formal opinion on the review.

Spokesman David A. Partenheimer declined to provide details on the review, but in an interview with The Washington Post’s editorial board earlier this week, Postal Regulatory Commission chairman Ruth Goldway said the number of post offices under scrutiny would be close to 3,600. Goldway said she expects some areas of the country to have more closures than others.

The review comes weeks after the Postal Service published the final version of regulations aimed at making it easier to shutter some of its 32,000 post offices. Despite some changes to the draft released in March, the final version preserved a key element allowing the Postal Service to target facilities that suffer from “insufficient customer demand” or where customers have other options for buying stamps and postal services"....................READ MORE

'Postal Service suspends retirement payments'

from wapo........

"The suspension of payments, which will save about $800 million this fiscal year, takes effect on Friday. USPS sends $115 million to OPM every other week for the FERS annuity.

Suspending the FERS payments is part of the Postal Service’s cash conservation plan. USPS is projected to lose $8.3 billion by the close of its fiscal year at the end of September.

“The Postal Service continues to cut costs significantly with initiatives to reduce the size of its labor force, the number of mail processing facilities and administrative overhead,” according to a statement from USPS.“Over the last four fiscal years, the Postal Service has reduced its size by 110,000 career positions and saved $12 billion in costs”.............LINK