postal reform
Dan Matthews, of the Scullville section of Egg Harbor Township, delivers mail on St. Martins Place in Marmora. Rural mail carriers are paid under a formula that takes into account the amount of mail delivered, the miles driven and boxes visited.

The U.S. Postal Service hopes it will be able to minimize layoffs by reducing mail delivery to five days a week — but that may be especially challenging in areas such as southern New Jersey with many rural delivery carriers.

“We stand to lose 40,000 or so good-paying jobs,” said Don Cantriel, president of the National Rural Letter Carriers’ Association, said Thursday. “Five-day delivery is a big mistake on the Postal Service’s part. It’s very short-sighted.”

At the end of 2009, there were 67,749 full-time rural carriers and 54,529 part-time rural carriers, U.S. Postal Service data show.

The Postal Service earlier this year asked for congressional approval to cease mail deliveries on Saturdays to help eliminate massive operating deficits.

Last year, the service — operated as a corporation but with congressional oversight — lost $3.8 billion. In the first quarter of this year, it lost another $1.9 billion as mail declined 3.3 percent from the same quarter the year before.

The number of postal employees has already been reduced in the past year by 47,000 to 594,000 in ongoing efforts to cut costs.

Raymond Daiutolo Sr., spokesman for the Postal Service in the regional Philadelphia office, said it’s premature to speculate on job reductions that might result from elimination of one day of delivery.

“Historically, we have been able to reduce our ranks through attrition,” Daiutolo said. “Between now and 2014, 44 percent of our work force is eligible to retire. This will allow for a smoother transition with limited disruption for employees.”

Limiting disruption will be difficult in areas such as southern New Jersey that depend on a rural carrier force already spread thin to deliver the mail, a force that often works six days a week.

Daiutolo said there are about 250 rural carriers in Atlantic, Cape May, Cumberland and Ocean counties, where 700 million pieces of mail were delivered last year. In the entire district covering ZIP code areas 080 through 087 plus 077 in southern New Jersey and all of Delaware, there are a total of 10,800 postal workers, he said.

“A lot of rural carriers have evaluated routes that require them to work six days a week for less hours per day,” Daiutolo said. “This is part of what’s being reviewed in anticipation of a possible OK from Congress to move forward.”

Dan Matthews, a rural carrier who lives in the Scullville section of Egg Harbor Township, works out of the Marmora post office in Upper Township.

Matthews is worried how dropping Saturday deliveries would affect him and the job he’s done for six years.

“If they make deliveries just five days, they’re going to consolidate routes,” he said. “In our office, there are four routes. If we lose two routes, I’m out of a job or I have to look for work in another post office and it could be 100 miles away.”

As it is, Matthews has already seen his pay fall and workdays per week increase to six as mail volume has declined and the service cuts costs.

“The last three years in a row my salary has decreased. I’ve probably lost $2,000 over the three years, and the only reason it wasn’t more is that I got a 1.5 percent wage increase last year,” he said.

Unlike mail-delivery personnel in cities who get paid by the hour worked, rural mail carriers are paid under a formula that takes into account the amount of mail delivered, the miles driven and boxes visited.

“So if your volume goes down, your pay goes down with it,” Matthews said.

In just Atlantic, Cape May, Cumberland and Ocean counties last year, nearly 700 million pieces of mail were delivered, Daiutolo said.

But mail volume has been eroding due to competition from electronic delivery methods (for example: bills paid online instead by sending a check) and because of recession-reduced activity.

In the Postal Service’s fiscal year that ended Sept. 30, mail volume dropped 13 percent.

In making the case to Congress for reduction in delivery and restructuring the service, U.S. Postmaster John E. Potter said the agency faces $238 billion in losses over the next decade if nothing’s done.

Cantriel said his union understands the U.S. Postal Service’s budget problems and will help “any way we can, but we have to protect our members.”

The four-year contract of the rural letter carriers’s union expires in the fall, and “we’re ready to start negotiating in September,” he said.

Daiutolo said whatever the local impacts of the reforms might be, they will “be implemented in accord with our national agreements.”

The American Postal Workers Union, which represents 330,000 postal employees, also doesn’t believe a reduction in delivery days is necessary.

The union and the association for rural letter carriers favor another reform being sought by the Postal Service: Restructuring how it covers retiree health benefits to a pay-as-you-go system similar to what’s used by the federal government and most of the private sector.

Postal-reform legislation of 2006 required the agency to pay $5.4 billion to $5.8 billion annually to pre-fund retiree health benefits. Daiutolo said this is in addition to regular retirement and pension obligations, which are fully funded.

“These funds are set aside to pay for future health care needs for employees who are not even retirement eligible,” he said. “It is an unreasonable financial burden given everything that is happening in the mailing industry.”

The Postal Service expects continued declines in first-class mail, which is its most profitable class of mail. Overall mail volume was 177 billion pieces last year, down from 213 billion in 2006, and is expected to drop to 150 billion pieces by 2020.

Some services are growing. Last month, it said its shipping services — mainly Priority Mail and Express Mail — increased 5.7 percent in the first quarter from the prior year period.

But that growth, and a $1.4 billion reduction in expenses in the first half of its fiscal year, aren’t enough to put the agency in the black.

The Postal Service says the ending of Saturday delivery is expected to save $3 billion annually.

Daiutolo gave three reasons for choosing Saturday for the mail cutback:

n It has the lowest mail volume of the week and more than a third of U.S. businesses are closed on Saturdays.

n Businesses and households have told the Postal Service that eliminating Saturday delivery would be the least disruptive to them.

n Operating for five consecutive days during the traditional workweek would be most efficient for the Postal Service.

He said that the Postal Service at the end of March asked the Postal Regulatory Commission for approval of its plans and the commission is holding seven hearings around the nation on the proposals. (An East Coast hearing will be held June 28 in Buffalo, N.Y.)

The agency will also need Congress to remove the existing six-day-delivery requirement from the law governing the service, he said.

“Our hope is that we could implement five-day delivery during our next fiscal year beginning in October,” Daiutolo said.

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