United States Postal Service CFO Joe Corbett kicked off today’s press conference announcing first quarter results of USPS’s 2013 fiscal year in a defensive tone. He noted that despite a healthy spike in holiday mail, package deliveries, and election mail in the first quarter, the Postal Service still showed a net loss of $1.3 billion. “There is clearly something wrong with this picture,” Corbett said. “We can’t operate on the precipice. Customers deserve better.”
Postmaster General Patrick Donahoe added that direct mail had a strong surge last fall and gave the marketing channel a promotional boost, saying, “Direct mail is the best return on advertising investment there is.”
During the call, just two days after announcing that the USPS intends to phase out Saturday mail delivery in August, Donahoe responded forcefully to critics—including Senate Majority Leader Harry Reid (D-Nev.)— who claimed that he had overstepped his bounds. Donahoe stuck to his guns, saying that cutting Saturdays alone would not be enough return the postal service to profitability. “We still need a change in legislation,” said Donahoe, who wants freedom to establish an independent healthcare plan for USPS that would free it from billions of dollars in federal prepayment obligations it cannot pay. It defaulted on a $15.9 payment last year.
Sen. Reid had said that Donahoe had damaged his reputation in congress and warned that his move to cut Saturday delivery, “further complicates congressional efforts to pass comprehensive postal reform legislation in the future,” according to the Washington Post.
Just hours after Donahoe’s Wednesday announcement, he felt the wrath of the National Rural Letter Carriers Association, whose board called his actions “reprehensible and irresponsible,” and voted unanimously for his dismissal.
Donahoe remains adamant that his interpretation of the congressional appropriations resolution governing the postal service gives him the authority to alter operations such as delivery schedules without legislative approval. “My encouragement to congress is, please do not put restrictions on us,” Donahoe said during the call. “Allow our customers to make critical decisions now and get finances stabilized for the long run.
The Postmaster General then fired a parting shot at Capitol Hill. Claiming that being allowed to seek healthcare for postal employees and retirees in the free market would save the Postal Service several billions of dollars a year, Donahoe added, “I would say the whole federal government should do this. It would save a lot of money.”
