David Savastano, Editor07.25.13
The issue of postal reform comes up in Congress on a fairly regular basis, like whenever U.S. Post Office authorities realize that the present system is heading for financial ruin. Today, July 25, 2013, the House Oversight and Government Reform Committee, chaired by Darrell Issa, a California Republican, approved the Postal Reform Act of 2013 by a 22-7 vote.
Not surprisingly, the vote split along party lines.
There are very few people who think that a change is unnecessary. The Postal Service has reportedly lost $19 billion in the last 18 months. That is not sustainable. The further decline in the amount of mail the Postal Service processes is ongoing; the necessary hikes in postage to cover this would likely severely cut the amount of mail being sent.
Reform is coming. The question is what that reform will look like. Some of the key talking points include eliminating Saturday delivery, offering new services that can generate revenue, closing some rural post offices, reducing the workforce and reducing health care and retirement costs. Implementing curb-side and cluster delivery would save another $4 billion, Congress said.
The elimination of Saturday delivery of mail and newspapers would, according to Congress, save $2 billion annually. Packages and medicine would still be delivered. This doesn’t sit well with Hallmark Cards and the Greeting Card Association, which has hired a lobbyist to get their point across.
Joel Quadracci, chairman, president and CEO of Quad/Graphics, has testified before Congress twice on the subject of Postal Reform. Quad/Graphics is the second-largest printer in North America; CR/T, its ink manufacturing subsidiary, is the fourth-largest North American ink supplier.
Mr. Quadracci spoke in favor of reforming the Postal Service.
“As we know all too well, the Postal Service is losing money at a rate of nearly $25 million a day with a total planned loss in 2013 of $7.6 billion,” Mr. Quadracci said. “Although the Postal Service is financially challenged, it is still a $65 billion business that supports a private sector economy worth more than $1 trillion, employing some 8 million private sector workers and accounting for 9% of our nation’s gross domestic product.”
The concern that Mr. Quadracci and others have expressed is that the uncertainty about the Postal Service, both its future and its postage rates, could impact the magazine, catalog, direct mail and other printing industries that rely on mail delivery. That would also further affect publication and commercial ink suppliers. On the other hand, a financially healthy Postal Service would bring certainty.
However, Mr. Quadracci also backed the idea of a five-day mail delivery schedule, noting that printers can ensure their customers’ materials make it out on time.
The bill next goes to the House membership, then to the Senate and the president. A strong U.S. Postal Service is a necessity, but reform is required. Whether Congress and President Obama can agree on what the reform will be is another matter.