Economic Woes Could Mean USPS Service Cuts

by kespeland on January 31, 2009

The U.S. Postal Service may have to cut back more services in the face of mounting economic pressure.  The service has been ordered to pay billions for retiree health care, and it’s asking Congress for some relief from those payments in order to maintain service.  But spokesman David Walton says the postal service is also facing external business pressure.

“First class mail has been declining, mostly due to electronic diversion. In the area of shipping, we face tremendous competition from several world-class competitors.  And then also mailers have been cutting back as well because of their own financial challenges and because of the rising costs of basic inputs, like paper,” says Walton.

Walton says the service has offered thousands of employees early retirement and frozen executive salaries.  If Congress does not approve scaling back retiree health care benefits, Walton says the service may reduce mail delivery to five days a week temporarily.

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