August 14, 2009
Charles Mapa, President
I must say that I was somewhat shocked when I opened the Postal Service’s Morning Report today to be greeted by the comments of the President of the United States, Barack Obama. The President, in an effort to allay the fears of private insurance carriers worried by the effects of a government run health care system, was quoted by the Washington Post newspaper as saying, “I mean, if you think about it, UPS and FedEx are doing just fine right? No, they are. It’s the Postal Service that is always having problems.”
These are some of President Obama’s first comments on the Postal Service, and I have to tell you, they are a little perplexing to me. It is not as if we are comparing apples to apples here. Sure, on the surface it seems as though we, the USPS, FedEx and UPS, do the same thing don’t we, we deliver stuff. We all drive around in distinctively colored vehicles; many of our employees are uniformed, and there are some other similarities.
President Obama stated that FedEx and UPS are “…doing fine, aren’t they?” Are they really? UPS revenues are down about 17%, actual earnings are down almost 50% and their volumes, like the Postal Service’s, are down significantly. FedEx’s revenues are down more than 20% over a year ago. I wouldn’t say that they are doing “just fine!” I’d say they are muddling through this bad economy just like the Postal Service is trying to do.
Maybe one of the big differences is in how FedEx and UPS can react to a severe downturn in the economy. I would think that if FedEx wanted to restructure a payment schedule using its own funds or even to refinance a loan; it would likely be very simple for them to go to the bank to make those arrangements. Not so for the Postal Service. With us, every move is scrutinized. For us to restructure our payments for our future retirees health benefits literally takes an act of Congress and that has been in the making for about nine MONTHS, both in the House and Senate.
So many industries went to the Congress with outstretched hands to receive their bailouts. The Postal Service has not done that; instead, it simply asked to be able to restructure its payment schedule on future retiree health benefits from the very entity, the U.S. Congress, responsible for its welfare. Rather than finding a way to take care of business and do the right and logical thing, Congress has dragged this process out for months. The cash cow has been turned out to pasture in a barren field. Is that any way to have to run a business? Let me remind you again that that prepayment of future retiree health benefits is something with which only the Postal Service has been burdened. Last year, that payment of about five and a half billion dollars was the difference between the Postal Service being hailed as a financial wonder by turning a large profit in a down economy, and being reviled as an obsolete dinosaur ready for the bone-yard.
Both FedEx and UPS have reverted to layoffs to control some of their costs. Much to PMG Potter’s credit, this has not happened with the Postal Service; most of the reductions in workforce in the Postal Service have come through attrition, chiefly through retirements. If Mr. Potter had gone down the layoff route, it would have taken more than 100,000 layoffs to close the gap between financial loss and breaking even. Because of the down economy, fewer people have been taking advantage of this option. (Perhaps it is time to invest in an incentive offer, of say $10,000 to interested eligibles. That relatively small amount would be quickly recouped in savings on salaries and benefits).
The Postal Service has an obligation and duty to the American people to maintain a delivery system to include tens of thousands of post offices, stations, branches, and routes. Neither FedEx nor UPS has those obligations. If they have no package to deliver on Memory Lane, they don’t have to go there. The Postal Service serves practically every address, every day.
I guess my biggest disappointment was that our President Barack Obama saw fit to slam the United States Postal Service as an inefficient problem-riddled entity to be used as an example of what is bad, while FedEx and UPS are to be held up as sterling examples of all that is good in this down economy. A simple scratching below the surface on this issue would have shown Mr. Obama or one of his staffers that this scenario is just not true. Certainly the Postal Service has some big problems, but it is not the colossal inefficient monster that some like to paint it. Over the last few quarters, the Postal Service has reached record service performance level. The hundreds of thousands of dedicated clerks, carriers, mail handlers, supervisors, Postmasters, PMRs, casual and transitional employees, and managers (still the most trusted employees in the Federal Government), deserve better from the top office of the nation.
National League of Postmasters