Revenue & Volume Impact Study Shows up to $5 Billion in Losses if Post Office Proceeds with Closings & Service Standard Changes
Congressman Brian Higgins says plans by the United States Postal Service (USPS) to change delivery standards and close facilities could result in billions of dollars in losses and there is a study that the USPS doesn’t want you to see that proves it.
“For months we have been saying that the cost savings projected by the USPS simply doesn’t add up, now the numbers in their own study prove it,” said Congressman Higgins. “According to this report, proposed changes could result in a 10 to 20% reduction in mail volume and up to $5 billion in losses. This is not a bold plan of reform; it is a recipe for disaster.”
At a Postal Regulatory Commission hearing last week testimony revealed the findings of a Revenue and Volume Impact Study commissioned by the USPS. The USPS sanctioned “secret study” showed tremendous financial losses even after facility closures. It also revealed that both first class and periodical mail volume would decrease significantly. More money was then spent to fund a second study that gave the USPS leadership more palatable numbers.
Congressman Higgins has been consistently outspoken about the flawed “decide now, justify later” approach by the USPS as it proceeds with the closing of facilities and changes in service delivery.
The Postal Inspector General recently agreed to include the Buffalo William Street facility in their audit of Mail Processing & Distribution Center closings at Congressman Higgins’ request.
Higgins continues to argue that facility closings appear to be somewhat arbitrary rather than deeply rooted in financial justification or long-term business growth opportunities. He pointed out the unique characteristics and successes of the Buffalo operation:
Below is a copy of Congressman Higgins’ letter to the Postal Regulatory Commission objecting to proposed changes in service standards:
March 28, 2012
Ruth Y. Goldway
Postal Regulatory Commission
901 New York Avenue, NW, Suite 200
Washington, D.C. 20268-0001
I write to express my continued objection to the United States Postal Service (USPS) request for a change in service standards across the country. Very serious questions have been asked about how the proposed service change would affect communities, businesses and families. My office has reiterated many of these concerns to both your office and the office of the Post Master General.
I was disturbed to find the USPS recently acknowledged in a Postal Regulatory Commission hearing the presence of data not previously released to the public that shows the devastating economic impact of the proposed service standard changes. This USPS sanctioned “secret study” revealed that first class mail volume could see a 10% decrease and periodical delivery could decline by 20% due to changes in service standards. Furthermore, the corresponding revenue loss to the USPS could reach $5,260,842,336. These numbers are extraordinary and illustrate how little is really known about the total impact of these policy proposals. Equally troubling, is the additional money spent by on a second study resulting in findings more palatable for the USPS.
I find it shameful that the USPS would obscure this report from public view while they proceed with actions that will directly impact the lives of hundreds of employees and thousands of local businesses in my Western New York Community alone. If the USPS is to be solvent in the future it must be allowed to grow its revenues. This misguided “decide first, justify later” policy will only continue the decline of the USPS and will further limit services for the millions of Americans that rely on current services standards to do business, gain access to medical supplies, receive their Social Security checks, and vote.
Service standard changes in the immediate future would slow economic growth, have the potential to disenfranchise those wishing to vote via mail, and as illustrated by the USPS own economic data, potentially lose the agency over $5 billion next year. This is not a bold plan of reform; it is a recipe for disaster. The USPS has attempted to justify a bad decision for hundreds of communities with flawed data and analysis. The true costs of this transition must be understood better and we must be able to see a clear path forward in bringing the United States Postal Service into solvency. I thank you for your attention in this matter and ask that you reject any proposal to alter service standard changes based on flawed analysis.
Member of Congress