POSTAL SERVICE SAYS MORE MONEY NEEDED TO KEEP MAIL COMING, PLANNED PROJECTS ARE ON HOLD, MAIL DELIVERY COULD BE IN JEOPARDY AND RATES MAY RISE AGAIN AS SOON AS NEXT YEAR

Moving to block massive losses as costs rise and business slips,
the Postal Service is freezing hundreds of new construction and leasing
projects across the country.

And the agency’s governing board issued a warning that unless there are
changes in the laws that regulate how the post office operates, universal
service to every home, every day, could be in danger.

Postal officials didn’t provide a dollar estimate for the savings they
expect in the cutbacks, but they said more than 800 planned projects in
all states will be affected.

The move comes just two months after the price of first-class mail went
up a penny to 34 cents.

Many other rates rose also, but several price increases in other types of
mail that had been sought by the agency were rejected or trimmed by the
independent Postal Rate Commission.

With rising costs, postal officials say they face a $2 billion to $3
billion loss this fiscal year. After five years in the black, the post
office had a $199 million loss the previous fiscal year.

Postal managers are preparing to apply this summer for another rate
increase, to take effect next year.

Among the problems cited by the Postal Service are wage increases larger
than the rate of inflation, rising fuel costs, changes in the type of mail
being processed and increased competition.

The construction and leasing freeze affects facilities that the agency
has made commitments to but where construction has not yet begun.

“All new construction, new leasing and expansion planned for 2001 is
frozen,” postal spokeswoman Judy de Torok said.

The projects already under way won’t be halted, she added, and a few
planned projects will continue if needed for health and safety reasons.

Meanwhile, the universal service that Americans take for granted could be
in jeopardy unless laws regulating operations are changed, warned the
postal governing board.

Universal service to every address at uniform rates has been a
requirement since the nation’s founding.

For years Congress subsidized the service, but when the current system
was created in the 1970s the subsidies were phased out. The post office no
longer receives taxpayer money.

Copyright (c) 2001, Sentinel Communications Co.