Hallmark Concerned Postal Service Plans Could Lead to 3-Day Delivery
Posted on July 10, 2010
Hallmark President and CEO Donald J. Hall, Jr. recently testified before Joint Senate and House Subcommittees about the United State Postal Service's plans to continue raising rates and eliminate Saturday mail delivery. Hall is critical of these plans.
Hall says these plans could drive mail volume away and lead to Postal Service becoming only a 4-day or 3-day delivery service.
"As you know, the Postal Service has proposed a dual strategy of reducing service and further reducing rates. I would argue that there is no other business in America that would pursue such a strategy to achieve its long-term viability. In the past, pricing increase could make up this shortfall. In this environment whether it is for greeting cards, magazines, advertising, catalogs or bill paying, all segments will tell you that the Postal Service cannot price its way to solvency by raising rates. Rate increase at this time will only serve to drive more volume away, increasing costs for mail remaining in the system. This, in turn, will lead to more volume losses creating a vicious cycle that some have described as a "death cycle."
Similarly, eliminating Saturday mail service will further drive volume away, and ultimately result in less volume and revenue. I am concerned that going down this path does not address the critical issues and we will soon be talking about 4-day or 3-day delivery. Such a Postal Service would no longer "bind the nation together" as required by law -- of rich and poor, city and country. Rather, it will add to cynical feelings the general public has about government, and it will further erode the value consumers ascribe to the mail as it becomes less and less timely and less relevant."
Preach it, Brother Hall! We couldn't agree more. Congress needs to shut down this insane idea of the Post Office only delivering the mail a few days a week. It's absurd. It won't impact just greeting card companies like Hallmark but all small businesses and consumers.
Congress needs to change the federal law that says that the postal service has to prepay pension liabilities (which no other corporation does) and put someone in charge that will make cuts to the administration-heavy agency. Then the postal service can be back in the black.
You can read Hall's full statement here (PDF file).