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Board of Governors Aims to Accelerate Steps to Restructure USPS

Five-year plan for fiscal health to be implemented at quicker rate.


In the midst of the fiscal cliff debate at the end of last year, the 112th Congress failed to act on postal legislation aimed at restoring order to the fiscal house of the United States Postal Service (USPS). Citing the fact that the Postal Service cannot wait indefinitely for legislation, the USPS Board of Governors directed postal management on Monday to accelerate the restructuring of Postal Service operations to further reduce costs in order to strengthen Postal Service finances.

Though the USPS must now wait for the 113th Congress to act, it will not do so lamely. The group’s existing five-year plan will be updated and measures for change that are within the control of the Postal Service will be taken.

“At its core, the plan requires the reduction of annual costs by at least $20 billion by 2015, rising to more than $22 billion by 2016. This cost reduction is necessary given projected declines in First-Class Mail volume, which has already dropped by 25 percent since 2006,” according to a spokesperson for the USPS.

In addition to rethinking the way the organization managaes its health care costs, the plan pursues a realignment of mail processing, retail and delivery operations, which the USPS expects to yield more than $8.1 billion in annual cost reductions.

The U.S. Postal Service ended the fiscal 2012 (Oct. 1, 2011 to Sept. 30, 2012) with a record net loss of $15.9 billion. The Board of Governors is currently refining a specific acceleration plan, which should be made public by February.

“In the absence of legislative reform that quickly enables meaningful operational changes and cost reductions, the Postal Service could incur annual losses as great as $18.2 billion by 2015 and accumulate a total debt of $92 billion by 2016,” says a spokesperson.

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