U.S. Postal Service fighting efforts to block junk mail
By Lyndsey Layton
By Lyndsey Layton
WASHINGTON — The souring economy and changing lifestyles are dramatically affecting one of the most dependable institutions in American life: the U.S. Postal Service. Troubled banks are mailing fewer credit card offers. Declining new-home sales mean vacant houses sitting with empty mailboxes. And as consumers switch to paying bills online, first-class mailings are drying up.
Now, a new trend in consumer activism — potential do-not-mail lists pending in 15 states — threatens to reduce deliveries of catalogs and other "junk mail" that make up the largest volume of postal deliveries.
Because of these factors, postal officials are expecting an operating deficit of $1 billion this year, the largest since 1995, and are looking for creative solutions.
"We cannot afford, literally or figuratively, to begin (the year) ... more than $1 billion in the red," Postmaster General John Potter testified before a Senate subcommittee Wednesday. "We would never be able to dig out of that hole."
Potter said he wants to explore the possibility of renting out space in the 37,000 post offices across the country to banks and other commercial interests. He said, however, that legal restrictions governing federal property could get in the way of, say, installing a Starbucks in the local post office.
"Other countries have the same challenges, but they look at their assets and use those assets to generate revenue. They use their retail outlets as banks," Potter said. "That type of flexibility is something I think we need to explore."
As recently as 2004, the postal service had a $3.1 billion surplus, but has since been struggling against growing competition from FedEx, DHL, UPS and other delivery services. The Internet also has cut into the postal turf with the explosion of e-mail and an increase in the number of consumers who pay bills online rather than mailing a check.
First-class mail, the Postal Service's most profitable type, has been dropping steadily. The amount of first-class mail, which includes letters and bill payments, fell to 96 billion pieces in 2007 from 98 billion in 2004.
This past December was the first holiday season in which mail volume was less than in the previous year.
At the same time, standard mail — advertising circulars, catalogs, fundraising appeals — has grown to 104 billion pieces in 2007 from 101 billion in 2005.
The explosion in standard mail has irked some consumers, many of whom have begun asking lawmakers for a national "do not mail" registry similar to the telemarketing Do Not Call phone registry, so that advertisers would have to stop sending catalogs and other unwanted mail to anyone on the list.
"I see catalogs of clothing, furniture and food, and I have no idea how they even get my name," said Maryland Del. Karen Montgomery, a Democrat. "I'm infuriated. We throw out the equivalent of a grocery bag of unwanted mail each day. We used to have a trash can in the post office, and most of people's mail went into the trash. I just thought, this is ridiculous. What it does, of course, is to keep the post office in business."
Montgomery proposed "do not mail" legislation late last year, making Maryland one of 18 states — including Hawai'i — to consider such a registry within the past year.
Soon after she filed her bill, she said, she was inundated by lobbyists representing the Postal Service and the direct-marketing industry. "There was so much pressure against it," she said. "It turns out the Postal Service is relying on a lot of this junk mail."
Montgomery withdrew her bill but says she will reintroduce it after more research and a consultation with the state's attorney general.
RAISING ITS RATES
At Wednesday's hearing before the Senate subcommittee, Potter talked about the postal service's lobbying efforts against "do not mail."
"We're working very hard to inform people about the role that mail plays in the economy, as an employer of millions of Americans," said Potter, adding that it is unclear whether states have the authority to create laws that affect the postal service. "Fortunately, no legislation has passed."
It seems unlikely that mail volume will return to previous levels once the economy improves, thanks to shifts in the way Americans are communicating and doing business, Potter said.
To solve its immediate headaches, the postal service will reduce labor costs by cutting overtime and using more seasonal workers, Potter said. The service also plans to raise the cost of stamps and of premium services in May, taking advantage of reforms passed by Congress last year that clear the way for annual rate increases. The cost of a first-class stamp will rise a penny, to 42 cents, and will increase every May thereafter, officials said.
Under the reforms passed by Congress, postage for letters can increase no higher than the rate of inflation, but fees for package delivery can be raised to compete with rates charged by FedEx and other private competitors.