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USPS News: Press Releases
FOR IMMEDIATE RELEASE
September 20, 2001
STATEMENT OF POSTMASTER GENERAL/CEO JOHN E. POTTER
TO THE SUBCOMMITTEE ON INTERNATIONAL AFFAIRS,
PROLIFERATION AND FEDERAL SERVICES
SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS
SEPTEMBER 20, 2001
TO THE SUBCOMMITTEE ON INTERNATIONAL AFFAIRS,
PROLIFERATION AND FEDERAL SERVICES
SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS
SEPTEMBER 20, 2001
Good morning, Mr. Chairman, and members of the Subcommittee. I appreciate the opportunity to talk with you today about the United States Postal Service. I have submitted detailed testimony in advance. However, recognizing the pressing business of the Senate, I will abbreviate my comments.
Last week's attack had a personal impact on us. The Governors of the Postal Service were in public session when the terrorists attacked the Pentagon. With our offices overlooking the Potomac, within seconds we saw the absolute horror of the moment. None of us will forget the black plume of smoke coming from the building.
In New York, our Church Street Station was in the shadows of the World Trade Center. Our employees were getting the mail ready for thousands of businesses in the area. Their station was showered with glass and debris in the opening attack. They were in the process of evacuating when the first tower fell. Incredibly, none of our employees was hurt -- even as they ran to assist the wounded. I visited New York City last Friday -- and met with employees and managers who ran to help. I could still see the shock and disbelief on their faces several days later.
And as a native of New York City, the sight of the skyline without towers remains inconceivable.
Almost from the instant of the attack, we began to discuss ways to keep the mail moving. Over the years we've learned that in times of natural disaster, the appearance of letter carriers making their rounds is an important signal to neighborhoods and the nation that the fabric of everyday life, although damaged, remains intact.
And in times of disaster, our Postal Inspection Service, Mr. Chairman, plays a constructive role in helping management. Chief Postal Inspector Ken Weaver is with me today and I'd like him to speak for a few moments about the role his Inspectors and Postal Police Officers played ... Chief Weaver.
Like Chief Weaver, I am extremely proud of how our 800,000 men and women pulled together to reroute mail from aircraft to ground transportation. We had men and women volunteering to go to New York City to help get the mail home. It became clear to me in Washington and when I was in New York that our team was committed to keeping the nation's fundamental communications network delivering.
And I can't say enough about the thousands of postal employees in New York City and the Washington, D.C. and Greater Pittsburgh metropolitan areas whose personal lives were disrupted, yet found ways to get to work and ask "how can I help."
I also want to salute the hundreds of contract truck drivers who move the mail every day. And my compliments to George Warrington, president of AMTRAK, who added hundreds of cars to their network to move the mail. They reacted with flexibility and speed.
I also want to thank Fred Smith, the CEO of Federal Express, and his team. As you know, it was only three weeks ago that FedEx began moving Express, Priority and First-Class Mail under a new contract. Almost from the time of the terror attack, our teams worked cooperatively and closely to serve America and our customers.
I am pleased to report that amid the national focus on Tuesday, September 11, mailhandlers and clerks reported to plants across the nation that afternoon and evening to process and distribute the mail for consumers and businesses. And on Wednesday, September 12, across America postmasters and station managers opened their offices. By mid-morning, while clerks staffed retail windows, letter carriers began fanning throughout their neighborhoods delivering and picking-up Wednesday's mail.
In New York City, we concentrated on how to get mail to residents and businesses in Lower Manhattan. With the determination that marks New Yorkers, they got it done. Today, we are well along the road to restoring full service in New York.
And while America's airlines sat idle, our operations managers kept mail moving overland by trains and trucks. When the Federal Aviation Administration gave the go ahead for commercial airlines to fly again, we were ready to put the mail back aboard. In cooperation with the FAA, our Aviation Security group had redoubled efforts to ensure the safety of mail traveling by air.
Our people remain in close contact with the FAA, cargo carriers, commercial airlines, and the Postal Inspection Service to assure the integrity of mail flying on airliners. Therefore, in places such as Hawaii, Alaska, and Puerto Rico, our customers are getting mail and parcels from the mainland again.
In the broader context, the events of the last week tell a great deal about our role as a basic and fundamental service, provided for the people, by the Government of the United States.
But in providing that service, the Postal Service is mandated to operate like a business. Yet, we face the same economic factors as every other business. This means that we must balance our public service responsibility within the framework of businesslike operations, since we do not receive – and have not received – tax dollars for postal operations in almost 20 years.
Like other businesses, rising costs and the soft economy of the past year have affected us. Revenue and mail volume lag behind projections, and as soon as we saw those trends developing early in 2000, we responded aggressively to lower costs. Through it all we've had record customer satisfaction levels, reflected by strong independent service measurements.
Over the past two years, we've reduced career staffing by more than 21,000 positions. This year alone we used 23 million fewer work hours – the equivalent of 11,500 employees. When all the initiatives were totaled, we removed more than $1.3 billion in costs from our system this year. These efforts have contributed to nine straight quarters of positive productivity – an unprecedented increase of 4.5 percent over the last two years.
And next year we have the most challenging budget we've ever had. We are looking to reduce workhours by another 26 million, that's the equivalent of 13,000 jobs.
We'll do that in environment that will see another 1.7 million daily delivery stops added and hopefully an additional 2 billion pieces of new mail in our system.
Yet as fast as we reacted to reduce costs, rising energy and health care costs, and an uncertain economy have continued to challenge us. Even before last week's terror attack, we expected that mail volume will not keep pace with the annual growth in new households. Fiscal year 2001 will show a deficit in the range of $1.65 billion – the second straight year of losses. For Fiscal Year 2002 project, we are looking at a deficit of $1.35 billion.
Against this backdrop, two weeks ago I announced the most sweeping organizational changes to affect the Postal Service in 10 years. The changes will improve our focus and accountability, prioritize program expenditures, and drive performance.
We have reduced the number of officers by 20 percent and will eliminate over 800 headquarters and headquarters-related positions. We have eliminated two of our ten field area management organizations. The eight remaining areas will accelerate efforts to achieve a 30-percent staffing reduction.
Our plants and district offices will reduce administrative staffing by 10 percent, without affecting the collection, processing and delivery of the nation’s mail. Success with new automated equipment will also permit us to consolidate a number processing facilities and operations. These will be announced in mid-October, with implementation in January 2002.
Despite these cutbacks, the Board of Governors of the Postal Service voted to file a new rate case with the Postal Rate Commission later this month. Unfortunately, a 30-year-old statutory rate procedure has us initiating the process a year before new rates can be implemented.
Strong cost management enables us to limit this filing to an average of just under nine- percent – lower than the 10 percent to 15 percent many anticipated. While the cost of a First-Class stamp would increase by three cents, it is important to note that the 8-cent stamp of 1971, when adjusted for inflation, would cost more than the 34-cent price of today’s stamp. By the way, Mr. Chairman, we estimate the typical family will pay less than $1 a month extra.
Recognizing the difficult position of the Postal Service, financially and otherwise, both Congress and the Comptroller General of the United States have asked us to develop a comprehensive Transformation Plan to serve as a long-term blueprint for this organization's future.
In the last week, perhaps more than ever, we have seen how the nation depends on its Postal Service, to keep people in touch and to help drive the economy. This Transformation Plan will help us to identify short- and long-term actions that protect our ability to do this.
We are working with a wide range of postal stakeholders and pursuing a three-phase approach to developing the plan. Each of these phases is being developed on parallel tracks.
In phase one, we will continue to identify and implement the actions that are available to us now to manage more effectively and serve the American people better. In phase two, we will identify the moderate legislative changes that provide us with better tools to meet the business and consumer needs of our customers in today's world. In the third phase, we are working to identify the options for long-term comprehensive changes that will define and support the role of the Postal Service well into the 21st century.
Development of this Transformation Plan is one of my highest priorities. You will receive our discussion document at the end of this month and our plan at the end of this year.
There is general agreement that the 31-year-old law that created the Postal Service does not provide us with the tools necessary to protect affordable, universal service. I look forward to the committee's input in our continuing efforts to build a strong and healthy future for America’s Postal Service.
With your help, I believe our post offices can continue to play a vital role in keeping America connected. I can't say often enough how proud I am of our employees. When I was in New York with those employees most affected by last week's events, I thanked clerks, mailhandlers, supervisors, and letter carriers for coming to work. One letter carrier, whom I cannot forget, looked at me, and said, "I have to be here because my customers need me to be here."
That, Mr. Chairman, says a great deal about our men and women.
Thank you for this opportunity, I look forward to working with you and the committee in the future. I would be pleased to respond to any questions you may have.
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