Jeremy Hobson: Here in the U.S., the Postmaster General Patrick Donahue recently said the Postal Service could be going the way of Greece. That’s if Congress doesn’t pass a restructuring plan to close a multi-billion dollar budget gap. Donahue is proposing cuts to mail handling facilities — those big warehouses where your mail is sorted.
But as Marketplace’s John Dimsdale reports, this kind of postal austerity doesn’t come without a cost to customers.
John Dimsdale: This year’s closings mean about 20 percent of first-class mail that now gets delivered to regional destinations overnight will take two days.
Sally Davidow: It’s going to slow down the mail.
Sally Davidow is a spokeswoman for the American Postal Workers Union. Once all the targeted mail facilities are closed, the union will lose 28,000 members through attrition and buyouts. And Davidow says customers can expect delays in deliveries of medicine, newspapers and magazines.
Davidow: And then there’s the regular correspondence that people get. You know the bills, the statements, the checks they want to send in. All that’s going to be slowed down.
But few people depend on the post office for overnight mail, says Sue Brennan of the Postal Service.
Sue Brennan: Most people think it takes two, three, four days for a piece of mail to get delivered anywhere. That’s certainly not the case. But, for those procrastinators out there, we would suggest they give a day or two extra.
Slower service is one thing, but to tackle the Post Office’s growing deficit, prices will have to go up as well. Lee Fritschler is a former chairman of the Postal Regulatory Commission. He says the combination of service cutbacks and higher prices will create business opportunities for companies like UPS and FedEx.
Lee Fritschler: The Postal Service is competitive there too, with overnight mail, Express Mail. It just will cost more to mail a letter. You won’t be able to put a 44-cent stamp on it and hope it gets there in the morning.
For the most part, newspaper and magazine distributors say they recognize the Postal Service has to downsize to adapt to new realities. Jim O’Brien heads up postal affairs for Time Incorporated. He knows when the Post Office slows down.
Jim O’Brien: We have what we call ‘seeds’ in different zip codes throughout the country. We have 700 people that every week tell us when they get their Time or Sports Illustrated or People magazines. So we watch those seeds very closely.
O’Brien is expecting some early glitches as facilities are closed. But eventually he predicts his magazines will get there more efficiently — and on time.
In Washington, I’m John Dimsdale for Marketplace.
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