Tags: postal | service | gao | not | viable | costs | delivery

GAO: U.S. Postal Service 'Not Viable'

Tuesday, 13 Apr 2010 09:03 AM

By Dan Weil

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For years critics have pointed out inefficiencies in U.S. Postal Service operations, and the problems have only grown worse during the Great Recession.

A new report from the Government Accountability Office (GAO) says the service’s business model “is not viable,” according to The Washington Post, which obtained a draft of the audit.

The Postal Service estimates it will produce a record $7 billion of red ink this year and could lose at least $238 billion over the next decade if Congress fails to act.

Congress should let the Postal Service eliminate Saturday mail delivery and shutter some local post offices, the GAO said.

"If no action is taken, risks of larger losses, rate increases and taxpayer subsidies will increase," GAO said.

The Postal Service has proposed such measures, in addition to asking for the power to raise postage prices beyond the inflation rate.

Postal officials support the GAO’s report but fear its recommendation for further study of the issues.

"We've studied this significantly,” Postmaster General John Potter, told The Washington Post. “The time for study is over. Now's the time for action."

The GAO also recommends that the Postal Service consider outsourcing more delivery routes to independent contractors and wring concessions from its labor unions on pay and benefits in negotiations this year.

It’s not just those in government who are worried about the Postal Service business model.

"We are certainly concerned about future viability of the postal service," a representative for L.L. Bean, which sends about 250 million catalogs a year through the mail, told Newsweek.

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