Mailers group opposes amendment to restore 2012 service standards

The Coalition for a 21st Century Postal Service (C21), a group representing major players in the mailing industry, yesterday sent the following letter to the Senate Appropriations Committee, asking it to reject the amendement recently approved by its House counterpart, which would require the USPS to restore service standards to 2012 levels.

Text of the letter:

On June 17, the House Committee on Appropriations approved an amendment by Representative Chaka Fattah which would require the USPS to revert service standards for First Class Mail and Periodical Mail that were effective on July 1, 2012. That same amendment is being sought in your Committee. The Coalition for a 21st Century Postal Service (C21) opposes this amendment, and urges that it not be included in the Senate Appropriations legislation.

C21 broadly represents the entire $1,3 trillion industry, mailers and their suppliers, employing 7.8 million private sector workers, which relies upon USPS. A list of our members is attached.

This well-intended amendment is crafted to ensure that overnight delivery service is restored around the country, and particularly in rural areas. C21 supports that thrust; many of its members, rural and otherwise, have suffered negative effects from the downgrading of service over the past three years. Nonetheless, the amendment would create operational and financial impacts that would greatly outweigh whatever benefit it might confer. We believe a better avenue to address the service problems is through consideration in the authorizing committees. In fact, the issue is well-addressed in legislation introduced by Sen. Heitkamp and other Members, and pending before the Committee on Homeland Security and Governmental Affairs.

In order to restore July 1, 2012 service, the Postal Service would have no choice but to reopen a large number of facilities it has closed and/or sold in the past three years, reverse reconfigured transportation routes, and rehire, or extend the hours of existing, employees. The Congressional Budget Office concluded in a letter to Senator Tom Carper dated July 13 that the amendment would cost the Postal Service in excess of one billion dollars in the first year. (Postal Service estimates are closer to $2 billion in the first year, and $1.5 billion in each of the succeeding four.) CBO further concluded that because of its precarious fiscal condition, USPS would not be able to devote more than $300 million to the effort in that first year.

Further, CBO assumes that since the effect of the Fattah amendment would be for only one year, that the Postal Service would resume its service reduction plan in 2017. In light of this likely financial impact, the proposed amendment will hardly ensure that rural service would actually improve. USPS is already failing to meet the more relaxed standard. As a result, C21 is concerned that USPS would be unable to comply and simply fail to adhere to the old standards, despite a congressional mandate. The analysis by CBO confirms this possibility.

But the effects of rolling back service would not just be felt by the Postal Service. All of the companies up and down the mailing supply chain have worked and invested substantially in software, transportation and more to adhere to delivery changes caused by the Postal Service’s revised service standards and plant closings. The $2 billion in the first year is a USPS-only figure. The total impact, multiplied over the entire industry would be several orders of magnitude higher. To now roll back these standards would cause another debilitating wave of expense and effort.

While, again, we share the concerns of Members who believe rural service in particular should be improved, we believe the appropriate way to address these concerns is through the process currently underway in the authorizing committees to address specifically this important issue in an independent bill, or as part of urgent, more general postal legislation.

In sum, the cost of this amendment would not only substantially further erode the already very difficult financial condition of the Postal Service, we believe pursuing this amendment very well could be counterproductive to the process underway to pass legislation that would stabilize the Postal Service financially, and make some other needed and meaningful changes to the postal statutory regime. Thank you for considering our views.

C21’s corporate and trade association members include paper manufacturers, printers, technology suppliers, advertisers, catalogers, magazines, newspapers, greeting card publishers, financial houses and other major transactional mailers, prescription and e-commerce sales fulfillment, parcel shippers, mail service providers, and more.

Members

Alpine Air Express, Inc.

American Business Media

American Catalog Mailers Association

American Express

American Forest and Paper Association

Association for Postal Commerce

Bank of America

Boise, Inc.

Bowe Bell+Howell

Conde Nast

Datamatx

Direct Marketing Association

Domtar

Eastman Kodak Company

ebay

Envelope Manufacturers Association

FedEx

Greeting Card Association

IDEAlliance

Imaging Network Group

International Paper

Mailing & Fulfillment Service Association

Major Mailers Association

Medco

National Association of Advertising Distributors

National Newspaper Association

National Postal Policy Council

National Retail Federation

NewPage Corporation

Newspaper Association of America

NPES – The Association for Suppliers of Printing, Publishing and Converting Technologies

NPTA Alliance

Parcel Shippers Association

Pitney Bowes Inc.

Printing Industries of America

Quad Graphics

RR Donnelley

Time Warner Inc.

Verizon

Verso Paper Corp.