U.S. MAILS' POPULARITY ON DECLINE EVEN GOVERNMENT THAT CREATED POSTAL SERVICE USES PRIVATE CARRIERS

U.S. MAILS' POPULARITY ON DECLINE EVEN GOVERNMENT THAT CREATED POSTAL SERVICE USES PRIVATE CARRIERS
From CONTRA COSTA TIMES, May 3rd, 2001

By Thomas Peele TIMES STAFF WRITER As the U.S. Postal Service struggles with a severe financial crisis that could
lead to a cutback in mail delivery nationwide, the federal government itself
is spending hundreds of millions a year to ship overnight mail with private
carriers like Federal Express. The irony is not lost on Postal Service officials, who say the situation
epitomizes the kind of bizarre bureaucratic problems and legal hurdles the
agency faces as it tries to recover from a deficit that might reach $3 billion
in September. "We're broken. We need help," said Kristen Krathwohl, a Postal Service
spokeswoman. "Congress needs to help us repair the wheel because it's not
turning." Postmaster General William J. Henderson last week was more succinct. He
described the service's revenue outlook as "dismal." The Postal Service needs flexibility, Krathwohl said, and that includes
everything from the way it negotiates with employee unions to the way it
prices overnight mail. Under federal law, the Postal Service cannot offer discounted rates that
would allow it to compete with private carriers like Federal Express for the
lucrative bulk overnight delivery business, Krathwohl said. So those who use
overnight delivery services extensively, like federal agencies and
departments, instead turn to private carriers. Last year, for example, the Defense Department alone spent more than $500
million on Federal Express services, records show. The Postal Service charges $12.25 for overnight delivery of a package
weighing up to 8 ounces. But no matter how many packages a customer needs
delivered, that rate stays the same. Federal Express and other private
carriers offer bulk discounts. An influx of cash from government business if the Postal Service could
offer discounts would help, said Geraldine Jenkins, president of San
Francisco-based Local 302 of the National Postal Mail Handlers Union. But
Jenkins added that she doesn't believe the Postal Service's leadership wants
to compete and called it "very ironic" that government agencies use private
overnight mail carriers. "They're giving away business to the competitors," she said. Even the Postal Service has decided to go to Federal Express for some
services. Under a seven-year, $6.3 billion contract that takes effect later
this year, the private carrier will haul overnight and two-day mail for the
Postal Service. Just how much money the federal government spends on private mail carriers
is difficult to determine. Federal Express spokeswoman Carla Boyd said the
company won't reveal the extent of its government contracts. The U.S. General Services Administration the government's chief pencil
buyer fails to track total spending with Federal Express. It does, however,
use the service. It spent $132 million with it in fiscal 2000, records show. And the GSA even pitches Federal Express to private contractors though a
Web site it maintains with instructions on how to bid on government work.
"When it absolutely, positively, has to be there overnight …" use Federal
Express, the Web site states, showing a half-dozen Federal Express logos. Henderson said last week that without changes in federal law, the Postal
Service will continue to founder in the face of competition. "We don't have a
level playing field. It's like trying to box with your elbows and not your
fists," he said. Henderson's staff must report on the feasibility of a one-day home delivery
reduction to the service's board of governors in July. He said the cut could
be made on any day of the week not just Saturdays, as first proposed. "The reality of the marketplace is that the 30-year-old statutory model
that governs the Postal Service is in need of change to protect universal
service at affordable rates," S. David Fineman, the board of governors' vice
president, said. In other words, competition wasn't a serious issue 30 years ago. Two Bay Area congressmen, Republican Doug Ose of Woodland and Democrat Tom
Lantos of San Mateo, sit on the House Committee on Government Reform, which
oversees the Postal Service. In testimony before the committee last month,
Henderson first made public the idea of studying a cutback to five days of
home delivery. A spokesman for Ose said the congressman has not taken a position on
reforms. Lantos' spokesman didn't return a telephone call. Reach Thomas Peele at 925-977-8463 or [email protected]. Postal Facts * The U.S. Postal Service delivers 208 billion pieces of mail a year.
* The number of addresses receiving mail grows by 1.7 million a year. * One out of every 150 American workers works for the Postal Service. * Wages account for 76 percent of Postal Service costs. * Private mail businesses
like Federal Express and United Parcel Service do
$115 billion of business a year. Photo, PRIVATE CARRIERS like Fed Ex are getting the business the U.S. Postal
Service needs in order to cut losses, officials say. (AP)
Photo 2, Boxes bearing the imprint "Property of U.s. Postal Service" ae
loaded on a Federal Express truck in Fan Francisco. (Karl Mondon/Times)
Copyright (c) 2001, Contra Costa NewspapersCONTRA COSTA TIMES, 03rd May 2001