In a report delivered to Congress, USPS asserts that the Postal Regulatory Commission (PRC) based a recent advisory opinion on a â€œquestionableâ€ analysis of the potential cost savings that could be achieved by implementing a five-day delivery schedule to street addresses.
The Postal Service has estimated that making the move to a five-day schedule would yield a net annual cost reduction of $3.1 billion, based on extensive market research and financial estimates provided to the PRC last year. The PRCâ€™s advisory opinion concluded a five-day street delivery schedule would only achieve $1.7 billion in net annual savings.
In its report to Congress, USPS said the $1.4 billion discrepancy results from:
- The PRCâ€™s unwillingness to recognize about $760 million in savings from increased letter carrier productivity and efficiency under a five-day schedule.
- The PRCâ€™s failure to account for more than $260 million in highway transportation and mail processing economies associated with one less day of street delivery.
- The Commissionâ€™s summary dismissal of testimony by market research experts to reach its conclusion that the Postal Service estimate of annual revenue loss resulting from the change was understated by $386 million.
The Postal Service report says the total impact of transitioning to a five-day delivery schedule will significantly improve its financial stability. â€œNo other single action the Postal Service could take operationally will result in such large costs savings,â€ it says.
The Postal Service report also disputes the PRC claim that the five-day delivery proposal did not sufficiently take into account the needs of customers in rural and remote areas. USPS contends its extensive market research considered the views of rural customers and incorporated them into its implementation plan.
Finally, the report says the PRC hasnâ€™t fulfilled its core function in the nonbinding advisory process, which is to address whether the proposed service changes would be consistent with governing statutory policies.