The United States Postal Service is losing $25 million dollars per day due to its broken business model, Postmaster General Patrick Donahoe said Wednesday.
During a congressional hearing, Donahoe informed the House Oversight and Government Reform Committee that the USPS is “currently operating with a broken business model.”
“Since the economic recession of 2008, we have been experiencing a significant imbalance between revenues and costs," Donahoe said at the hearing. "This imbalance will only get worse in the coming decade unless laws that govern the postal service are changed.”
In order to curtail its massive losses, the USPS will require the flexibility to implement a five-day delivery system, Donahoe told the committee. According to the Postmaster General, such a reform would allow the USPS to “develop and price products quickly” and “to quickly realign our mail processing, delivery and retail networks.”
The Postmaster General also claims that the plan would prevent the USPS from becoming "a significant burden to the taxpayer."
Donahoe’s plan to cut Saturday delivery services has met with resistance within the postal service itself. Fredric V. Rolando, president of the National Association of Letter Carriers, submitted written testimony Wednesday in which he claimed that Donahoe “wants to degrade its last-mile delivery network by cutting Saturday delivery.”
Last July, 7,000 NALC delegates unanimously passed a “motion of no confidence” in Donahoe’s leadership, the Washington Post reports.
“[B]ecause we are convinced that the business strategy the Postmaster General [PMG] is following is doomed to failure,” Rolando’s statement read. “We have called for the PMG’s resignation. We respectfully think you should too.”
The USPS’s plan to end Saturday delivery in August was canceled last week. However, Donahoe sees the cancellation as a delay rather than a permanent step.
“Our customers require certainty -- especially about something as fundamental as our delivery schedule,” he said. “And so, we announced that we would delay implementation of our new schedule until we gained legislation giving us the ability to move forward.”