Postal service delivers bad budget news

March 2, 2010 at 10:39 AM
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WASHINGTON, March 2 (UPI) -- The U.S. Postal Service said it could lose $238 billion over the next decade if the agency doesn't get more flexibility on schedules, prices and labor costs.

Estimates released Tuesday also predict carriers would deliver 150 billion pieces of mail in 2020, a drop of about 26 billion pieces from 2009, the Washington Post reported.

Postmaster General John Potter said he'll seek to reduce mail delivery from six days a week to five, a change he said was critical to reduce the agency's debt load, USA Today reported.

Potter said Monday he'll submit a request about the mail service reduction to the Postal Regulatory Commission, which must issue an advisory opinion on any change in mail service with a national impact.

"We know we're going to have less mail in 2020 than we have today," Potter said. "We can't freeze wages. We can't freeze fuel costs."

Impediments to achieving sound financial footing include customers gravitating away from USPS's first-class mail toward the Internet and less expensive mail options, and increasing labor costs, Potter said during a meeting Monday with congressional staffers, government watchdogs, postal union officials and major postal customers.

The Postal Service experienced a 13 percent decrease in mail volume last fiscal year and lost $3.8 billion, Potter said. Projections anticipate further drops in mail volume and revenue over the next decade.

To offset some of the losses, Potter said he will seek more flexibility in the coming year to set delivery schedules, prices and labor costs. Besides an end to Saturday delivery, measures being considered include longer delivery times for letters and packages, postage stamp price hikes exceeding the inflation rate and possible layoffs.

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