Carriers hope bills level postal playing field

COLUMBUS - Pending federal legislation should deliver the level playing field the U.S. Postal Service is seeking.

Bills passed by bipartisan majorities in both houses of Congress are aimed at allowing the postal service to fulfill its universal service mission at a reasonable cost by establishing a modern system for regulating rates, said Nicole Rhine, president of the Nebraska State Association of Letter Carriers.

Versions of the Postal Accountability and Enhancement Act have received overwhelming support in Congress, said Rhine, who is heading the letter carriers two-day convention this weekend at the New World Inn in Columbus. The House passed the measure 410-20 while the Senate adopted the bill unanimously.

The postal service overhaul has gone to a reconciliation committee made up of members of both houses of Congress and should reach the desk of President Bush sometime this year, Rhine said. “The bill has been the postal service's major push. We've been working on passing this legislation at least 10 years now.”

The electronic age has thrown the postal service's business model out of whack.

Comprehensive postal reform is urgently needed, according to the General Accounting Office. The postal service's financial viability is at risk because its business model - which relies on mail volume growth to cover the costs of its expanding delivery network - is not aligned with 21st century realities.

The postal service's reliance on revenues from first class mail has been eroded by the proliferation of electronic communications alternatives, such as Internet advertising, electronic bill payments, emails, faxes and cell phone text messaging.

Revenues from first class mailings have declined every year for at least the last 10 years, while the postal service has added delivery points equal to the size of Houston, Texas, every year, Rhine said. “People just don't write letters like they used to. Revenues have been going backward, and we've got to fix that.”

The U.S. Comptroller General has outlined the trends that are creating the need for reform:

n Declining mail volume, particularly for first-class mail, which is critical to generating sufficient revenues to maintain affordable, high-quality, universal postal service;

n Changes in the mail mix from high-margin to lower-margin products;

n Increased competition from private delivery companies;

n Projected revenue declines and increases in expenses;

n Significant financial liabilities and obligations that continue to exceed assets (e.g., $60 billion in unfunded retiree health obligations and a multibillion-dollar escrow account);

n Uncertain funding for emergency preparedness (USPS has received almost $800 million in emergency response funds from Congress to help cover its security costs for 2005);

n Changing demographics of the aging postal work force; and

n Challenges in restructuring infrastructure and work force to become more efficient and performance-based.

The legislation would create a modern system of rate regulation and establish fair competition rules while maintaining the postal service's universal service obligation, Rhine said.

The last major revamping of the postal service was the Postal Reorganization Act of 1970. The 1970 law was designed to transform the postal service from a bureaucracy subsidized by tax revenue to a self-supporting, businesslike entity supported by the fees (such as first class stamp revenue) paid by its users.

“Everybody sat down and realized we had to do something,'' Rhine said. “Everybody's on board (with the measure now before Congress).”