we'll return shortly meanwhile i want to welcome the ranking member mr cave and mr crayford the members of the subcommittee hearing witnesses and all of those attending today today's hearing is intended to discuss the postal service's recently proposed initiative to study the activities of nearly thirty two hundred postal state sions and branches across the country for consolidation purposes as well as to examine how the the postal service is cost cutting and consolidation related efforts including mail delivery route adjustments and related impacts the chair ranking member and subcommittee members will each have five minutes to make opening statements and all members will have three days is submit statements for the record this time i would like to ask unanimous consent that the congressional research service is july twenty third two thousand i'm reporting on postal retail facility closure be entered into the record here no objection so ordered ladies and gentlemen today's hearing comes on the heels of the postal service as you may have read being placed on the government accounting office is two thousand nine h list which is largely due to the services this abysmal financial condition an issue this subcommittee has followed closely but even before the postal service those high risk list alarms had already sounded regarding the postal services revenue generating problems for the first time in decades the organization reported a net loss of over two billion dollars for fiscal year two thousand and eight losses for this year may exceed seven billion dollars despite the postal service targeting of six point one billion dollars in cuts while we may be unable to pan point whether the recent economic downturn the steady diversion of mail to other mediums or a combination or both is to blame for the current troubles what we do know is that mail volume has dropped precipitously from roughly two hundred thirteen billion pieces in f y two thousand and seven to a total of two hundred three billion pieces in two thousand and eight and projections for this year in icated the volume will continue to fall by possibly twenty eight billion pieces to a total low of one hundred seventy five billion pieces the writings of the writing is on the wall and the postal service obviously has to make some tough decisions if it expects to weather this current storm these decisions may involve more across the board cuts and work well as a celebrated consolidations of facilities and operations which brings us to the subject of the days preceding making sense of it all and examination of u p s is recently propose station and branch optimization initiative although at first glance the initiative seems to this simply be the latest step in the postal service's multi pronged effort to reduce it costs by removing excess network capacity we all know that the devil is in the details and that's what we're here to find out this morning it is critically important that even in the preliminary stages of studying the consolidation of nearly thirty two hundred stations and branch locations we all have some level of understanding about the potential impact such changes could have on cost perhaps more importantly we need to understand what effect these proposed changes may have on postal customers committed employees and communities in general to that in today's oversight hearing has been convened this subcommittee is interested in having the postal service fully articulated recently proposed to the station and branch consolidation initiative today's he also is intended to take an in depth look at the postal service's efforts to achieve greater delivery efficiency through the adjustment of letter carrier ro this subcommittee looks forward to learning more about mood adjustments the em tax associated with these changes and the savings achieved from these actions it is my hope that the testimony and feedback  today's witnesses will allow us to gain that knowledge again i thank you each of you for being with us this morning and i look forward to all that is a patient i'm now happy to yield to the ranking member mr shays it's for five minutes to make his opening station thank you madam chair appreciate i appreciate it on june twenty fourth the subcommittee amended in marked up h r twenty two allowing the united states postal service to adjust required payments to future retiree health benefits the full com adopted our approach by marking up the bill on july tenth to this date it's still very disappointing that the democrats of chose not to bring up this bill to the floor with such broad bipartisan support united states postal service directly advise us at the time that the legislation while substantial would not completely resolve their financial issues but it certainly turned out to be the case just this week the g a o announced the united states postal service would be doesn't need it as quote a risk this is sobering news two thousand six the postal countability in the hands of an act was passed in part to help get the postal service off the high risk list which it did thus g a o has renewed designation should serve as another powerful reason for congress to act and act quickly in passing h r twenty two and any other legislation which will help get the postal service out of the financial swamp it now finds itself in consolidating branches is an important and complex could the consolidation can best take place on the merits for the system to work a primary reason the postal service is in trouble right now is because it lacks some of the flexibility to adapt in a changing environment the united states postal service has experienced the largest drop off in mail volume in its two hundred thirty four year history greater than the declines during the great depression a number of major mailers are in financial straits bulk mail volume and advertising mail has down this is due in part to the poor state of the economy and also the postal monopoly does not extend email and internet advertising which continues to grow the forecasts for the return of this volumes are not optimistic the postal service must right size itself to the market it serves when looking to make cuts and finding long term solutions one must evaluate the entire operation of the postal service and look forward in discussing the rearranging of delivery routes and other potential structural changes but even that is not a complete solution one of the changes being pondered is an exemption to the rate increase of two point four percent to be established quote only one justified by exceptional or extraordinary circumstances and quote but raising the price of an item will only reduce sales in my opinion not increase them especially when demand is clearly decreasing thus the rate increases appear to counter to seem to appear counter to any sound economic logic and well only serve to further complicate this the united states postal service is woeful financial circumstances i will not support nor do i believe we need a rate increase once on a postage day there are those who suggest a service is a dinosaur living in a modern world and certainly a paper based labor intensive service at a time when most americans are more and more comfortable with e mail and internet communications however the postal service remains essential vital and one of the constitutional imperative i think that in my own personal opinion i think the postal service as a whole has done a very substantial amount of work to decrease the cost associated with it not only do we need to look at cutting the cost we also need to look about how to make postal service more relevant in the modern world it is a vital to our communities it is vital to business interests and i think we all support and want to see the postal service thrive i know that's why the gentleman or representative this is today one thing that i would hope that we would explore and i'm sure with the discussion today is the difference between the rural components and the urban component because there are factors that are distinctly different in the rural areas for instance in my district than some of the urban urban issues and i want to make sure that we explore those in the discussions today with that i'll yield back thank the ranking member there other members of the committee who wish to make an opening statement mr conley i thank the chair lady and i thank chairman lynch for holding this hearing i'm afraid the postal service leadership has led to the conclusion that the only way to keep the postal service solvent in addition to passing h r twenty two is to cut back on hours and even days of operation i believe that any short term steps must be taken in the context of consideration the long term business model for the postal service short term cuts and service will have long term impacts on the utilization of the postal service we must learn how the post service intends to remain solvent during future cycles economic growth and contraction cuts in hours of service the post offices represent a major loss of service for northern virginians for example without operating in the evening most residents are not able to use their post office due to the length of commutes in our region william county had the longest commute in the united states unfortunately changes and hours have been executed in the past without coordination or even notification of elected officials this examination is particularly important in light of gio's recommendation that u s p s consider restructuring to address its current and long term financial viability efficiencies that can be derived without loss of services jobs should be considered first before employees are consumers are asked to make those sacrifices the postal service should identify all the savings that we realize through area mail processing consolidations and that work distribution center closures and make every possible effort to avoid layoffs associated with those closures i appreciate the opportunity madam chairwoman to explore these issues and look forward to hearing about the protections postal service must employ to protect their consumers and their employees in the final analysis however u s p s must move to a new business model one that takes cognizance of vigorous competition and the impacts of technology on the traditional rain snow sleet or hell model that has provided example or service to the republic for over two centuries i thank you and you condition and i appreciate the magnitude of the task that's ahead for the postal service to ensure that it continues to be postal service on july the sixteenth the postal service announced sixteen post office branches in the greater cleveland area would be reviewed for possible consolidation after reading the testimony and the g a o report for this hearing and after hearing from my constituents i have many concerns i'm concerned that final decisions regarding each branch under consideration for consolidation will be made without full community participation in important i'm concerned that people in my community in communities across the country will face a significant and unnecessary reduction in access to crucial services i have concerns about the private sector taking over services that these facilities provide because privatization of a public like the postal service would be a and i can tell us chairman of the domestic policy subcommittee the general topic of privatization is something that we're looking into i'm i just want to say that this review process has to be done at the local level and must consider the unique demands on each individual facility to ensure that the concerns of the community customers postal workers and effects on the local economy are fully considered series local concerns that i have about cleveland look what's happening in our country right now you know over the last few decades we've seen a d m d s realisation insurance redlining mortgage redlining the subprime loan fiascos of foreclosures bankruptcies high unemployment business closing even churches and schools closing and you look at the communities that are affected the most exactly the communities have the highest need for postal service start closing some of these branches are talking about creating ghost know i have concern about the finance of the post office but it's very interesting when you talk about maintaining universal postal service which is really a right in a democratic society get people say well i'm going to pay for it where was that question when the tarp came out how are you going to pay for it seven hundred billion dollars thrown away to wall street trillions of dollars given to big banks banks parking money right now at the fed fed paying banks money to not to loan money to businesses in our community how to pay for it three trillion dollars at least high going to pay for it no one really asked that question when it's postal service something everyone uses high going to pay for it's the same kind of crummy debate that's going on right now over universal health care where the insurance companies are hovering over washington like a flock of vultures just waiting to see what they can pick up from the taxpayers high going to pay for it if we are committed universality of service and we're going to take a stand on behalf of the post office we're considered if we are committed to universality of service and we're going to take a stand we have a postal retirees who the u s postal service right now is looking at cutting into their retirement benefits if we're going to take a stand on behalf of universal service then we have to do it and challenge  those who somehow believe that if if the government has to pick up an increased cost here that somehow that's anathema well we have to ask what's a government for is it just for war it's just for being a gas station for wealthy special interest groups or are we a government of the people as lincoln parade we're about to find out general recognize the gentleman from maryland mr cummings shamming i want to hear the witnesses and i was myself with my colleagues statements and with that i  the former house member as the the delegate knows but i have to sort of reflect again with my colleague from cleveland that there's a whole lot of things this town does and a whole lot of money that the federal government spends that has no nexus to work to the constitutional responsibilities postal service is one that is specifically enumerated in the constitution it's specifically a responsibility so a way of the federal government  it is not an incursion on to states or local rights it is not an expansion the on the founding fathers intention for us to maintain and enhance the postal service and so i think this is one place  that republicans and democrats should finally find the middle ground we can to we can cooperate and agree on so you back i thank the gentleman in full disclosure as well i've mentioned this on numerous occasions but i think at last count i have seventeen members in my family extended family cousins in laws goes on its sisters mom who are either actively working for the post office or all retirees so that much being said i want to welcome you give me great pleasure to welcome representative al yes it is from new jersey who was a sponsor of a piece of legislation that is calling for the committee that he has that he has sponsored and i want to recognize him for five minutes actually it is the custom of this committee to swear witnesses who are to provide testimony before so can i please ask you to stand and raise your right hand where that the testimony you're about to give to the subcommittee is the truth the whole truth and nothing but the truth let the record reflect that the gentleman has answered in the affirmative and the gentleman is recognized inform and involve the public in the closing process and i am very concerned about the fossil services reason announcement to consider closing more than three thousand retail postal offices i understand of the postal service financial problems at the one thing i know they're having problems operating but no i'm out the financial stress should really different providing a transparent closing process with significant community involvement post offices are an important part of the communities i witnessed this far san my experience with the closing of a postal service in the last station and your city with almost no notification to the pub that all public officials the reason giving given was that it was security reasons office was a few weeks later again the mobile station was removed no reason giving other than security and that was very little notification for the community because you know the post office was hard on seniors around this particular post office because i was able to involve the other two members of congress plus the two senators in this post office closing very little information can forward on the postal service regarding the reason why this post office was closing and when you think of two senators and three congressman not getting information to me that's just not the way supposed to be i don't think even the president could have saved us post office but to me it showed a lack of compassion and a lack of sensitivity to communities and we finally after many many months find out why the reason of the closing of the post office of this particular post office and it was financial this is the reason why introduce my bill basically the bill limits the effect of financial reason on close in or the post office it doesn't eliminate it but it's not the main reason for closing the post office and eliminates the dual system and makes one unify closing process right now if you have a main post office there is a process not much by congress but the main post office usually one main post office with many satellite post offices what this bill does is it increases the notification to the public and it extends the public comment from sixty to ninety days t office bill and i do hope that in the hearings that you have in the future that you recognize the finances are important but i think community what it does to an area access to people who do not have the ability to drive seniors that you take all those in consideration because like it was stated here before in the constitution  state that this is one of the service that we have to provide so i thank you for allowing me to testify here today and i do hope that in the end we can make this possible service a little more responsive thank you very much i thank the gentleman this is a real concern is that they both have issues that they're all different issues how how do you how do you see us addressing them congressman i have to admit i'm an urban person i live in a i live in a community that is one square mile i have fifty thousand people that might community you know i love to sit down with someone that is not an urban person and talk about these socialist just addressing the urban component what what  are the issues that i mean there you talk about in general in the bill about there are community issues there are the elderly have a large elderly component that we kind of list out of top your mind what what those issues are that you have to deal with in the urban component well as access seniors do not have a bit of a walk a mile away in a situation city to deal with the post office seniors do not use computers seniors do not have computers seniors that i deal with can barely pay the electric electric bill so basically it's access to the postal services which i'm sure that is also and your areas and this is the main concerns of many of the the people in the area plus the fact that it was just close one that the next that is you know that there was no plan other than say well there's a post office a model way deal with th post office do we need some sort of how are we ultimately going to make these decisions i mean i my guess is if you were to ask all four hundred thirty five members of congress nobody wants to have a post office closed in their district but yet clearly we've got to do some sort of consolidation certainly there are some criteria by which we need to consolidate some of the facilities and the number number may or may not be right what are those criteria i mean going to come to that decision should it be a brac like process two or how do you see i don't think that's such a bad idea something like that or in terms of what else can we do for the post office whether we have to i know you don't believe in giving them more money but if this is a service that it must be provided i'm not opposed at all actually think there's probably more justification for using federal funds to help on the the postal service given its constitutional designation and then probably most every other thing that we do within this government so i'm not necessarily out of hand just opposed to to supplementing with what's happening there when i'm you know i agree with you on that issue effectively about that that review process that open comment process how do you see that happening because you know the difference between thirty days or sixty days or sixty days to ninety days if the process itself doesn't allow for the dialogue to happen and true consideration of maybe some of the other factors that go into how important the post office is in that community help me understand how that how that process should work in your viewpoint why my viewpoint they should be notification through the newspapers that this is taking place they should be the local elected official should be informed that this is happening i think that they should be some sort of announcement by the post office long before that the reason i extended to ninety days is to get more participation in this process to me it's just plain wrong to go in there and close the post office like any reason why i mean there's got to be a better reason than just finances to close a post office although i have a suburban i have one thousand taliban more suburban in nature but i represent a significant part of the city of boston the city of brockton which are clearly urban and i just i just want to say i agree with the gentleman's observation that these post offices and stations and branches are intensely local institutions that are not only commercial centers they're also social  and i think we remember that when we asked the general public to grade public employees they consistently grade their postal workers them mail handlers a lot of carriers and postal supervisors and postmaster is the highest of any public employee so those relationships between the communities and the post office at that local level is intensely personal and when we see the disruption is created by closing it has very real and dramatic impact on the people that we represent so it creates a real dilemma for us and we need to figure out a way to be able to guide their community when something like this has to happen someone once said there's nothing more disruptive to the human condition than the power of a new idea people just change and unfortunately we've seen nine billion pieces of mail taken out of the system last year twenty three billion projected out of the system this year because of the economy and people moving to electronic media like e mail and electronic payment systems we clearly have to reconcile our revenues with the size of our system and so that's going to be a very delicate process i do agree with the gentleman that that whole process needs to be more inclusive with the community and what the representatives who were responsible for those areas and you know that's that's our task that's part of the responsibility of this hearing and we really appreciate your bill i do have to say that i don't know where the post office turns if they can't  right size their system based on cost it leaves them with very little opportunity they've got very limited power right now very limited flexibility and this is a challenge not for the post office alone it's for all of us as  employees for the unions it's our task is to preserve high quality affordable universal service to the postal service and we need to to bring the post office into the next the next century the next iteration and to compete with all of these these new technologies so we've got a task here preserving that otherwise  changes that that collapse we are on the verge somewhat of a collapse in terms of the finding mechanism and what that might bring it might bring a lot of changes that none of us know the customer or the unions the users the mailers none of us want and i just don't want to buy by default allow the economic forces to define what the postal service will look like in the of branch post offices it addresses the need for notification of the community and elected officials is that correct yes and that financial reason is not the only reason for closing a post office operation no let me just suggest to you that certainly in my urban area that's as much an issue as how many branches there may or may not be particularly with long commutes evening hours a very important for people to access postal services and to do their business and i would just suggest to you that we may want to think about adding that to the notification procedures to local officials in the community it may or may not be necessary but to do it without any notification is terribly disruptive and has impacts that start to rival those closer itself thank you congressman connelly gemini so we would all the comments i just said to have problems like that you need to call me that's that's when i look at for responsiveness a locust was sensitivity on luggage was some sort of compassion from the postal service but let me just say that you know i think what the gentleman is looking for here is is  that he's able to represent the people who elected him which is a very basic right and obligation right in terms of the people to be represented an obligation on the gentleman to to do his job but to do that he needs notice and he needs to know what the what the rationale the reasoning is for any proposed closing he needs a fair opportunity to address that he needs to know what the fact is that had been placed behind this decision and he needs to have and the people that he represents need to have a part in this process so that essential services are not eliminated and that the employees here the letter carriers mail handlers the clerks the postal supervisors and postmasters i treated fairly during this process and they're not just blindsided by by this and i i actually think if that type of conduct were to be the norm that you experienced it would stop it would basically stop any changes because we can't have it done that way and i simply i simply cannot be tolerated but i want to thank the gentleman for talking about legal advertisement are you yes congressman how many of your constituents i know there are some that do that but wouldn't a news release a media communication that ends up somewhere on the front page or on one of the pages that people read so much better way of informing the public than putting it back and  i was a mayor for twelve years i know exactly what you're talking about but i still say that that's just not the only reason through the new store inform the public there are some type of ads that are also expensive but i think it gets the closing the local post office that that would not carry enough of a story story to be able to allow the public to know that the media would respond to that kind of notice should the media will respond but that's a one day story maybe a two day story but how do you follow it up talking about you know i don't necessarily mean the legal notice that you're talking about a small section in the back but there are other ways of noticing it and your issue of it shall not be soley for finance what what other conditions would be required to service because it's you know it's right there at mount vernon but what is the other conditions that would be required on your bill before they close it well my particular district not other districts i have four senior citizens around this post office large senior citizen buildings they need access a post office basically they come down to walk a block or two and they are at the post office that could be a consideration access to the most needy also you have you know people doing business small businesses mom and pop shops that need some of this post office nearby time is money but you have an examples of what in your bill would also be required besides the financial you just basically say financial cannot be done so to define it i just say there is a bill already in congress that takes in consideration a number of issues before closing swear that the testimony about to get to this subcommittee is the truth the whole truth and nothing but the truth let the record reflect that all of the witnesses have answered in the affirmative as you may notice this too small boxes in front of you the practice here is to allow each witness five minutes it'll show a green light while you testimony only is being given when that light turns yellow it means you've got one minute to wrap up and when it shows read it requires you to stop speaking what i like to do is just offer a brief introduction of our director of physical infrastructure issues at the government accountability office mr jerry service sol is senior vice president of the government affairs for the direct marketing association mr  director of the national postal policy council and mr michael murphy is president of the japs olson company a printing and logistics company in st louis park minnesota thank you all for your willingness to come forward and help committee with this work and i recognize mr small five minutes in opening statement good morning mr chairman and members of the subcommittee i'm here to talk to you about the steps the united states postal service has taken to make mail delivery as efficient as possible our future operational plans to continue to improve delivery efficiency and the station and branch optimization initiative as you are well aware the financial situation the pulse of service is grave it would be far worse were not for the gress of actions we have implemented for example since two thousand and two we have reduced costs by more than one billion dollars annually these efforts are particularly impressive when you consider that our delivery network continues to grow at a rate of about one point two new delivery points each year in effect we are delivering less mail to more addresses which means we risk that receive less revenue per address service cutting costs and deliveries particularly alan ging because a substantial portion of delivery costs are fixed our carriers must deliver to each address whether there is one piece of mail or several within these constraints we've been barked upon several initiatives that have improved delivery efficiency the first initiative is the historic interim alternate route adjustment process that we have agreed to with the national association of letter carriers and else the in two thousand and eight this agreement unable dust to jointly conduct evaluations on some ninety three thousand routes and rapidly eliminate approximately twenty five hundred routes realizing that additional process improvements could be made both parties jointly agreed to a new modified agreement in april two thousand and nine the cost savings are estimated to eliminate approximately twenty five million city delivery work hours or some one billion dollars over the fiscal years two thousand and nine and two thousand and ten one consolidation activity that is underway is the review of station and branch locations in larger cities where we have a number of offices in close proximity we the review with some thirty two hundred locations that handled the most retail transactions and the most deliveries we anticipate that out of these thirty two hundred locations less than one thousand will be considered as viable candidates to study further changes in mail processing technology have reduced the amount of space needed to carry operations that many stations and branches as a consequence opportunities exist to consolidate carrier operations into fewer locations without affecting service many stations and branches were established at a time when first class mail volume growth was robust there were few means of alternate access to postal services and virtually all retail revenue came from window transactions today about twenty nine percent of retail revenue is generated through alternate access channels such as our web site u s p s dot com and automated postal centers as local management undertakes the station and branch review they will consider factors such as customer access service change standards cost saving impact on employees environmental impact real estate values and long term postal needs we are taking all of these actions to use our resources wisely and position the postal service to survive this financial crisis while continuing top quality service to the american public along this line i ask congress to support the postal service efforts to operate in the businesslike manner as we make necessary decisions as you know the postal service has alerted stakeholders that mail volume levels can no longer sustain six day a week delivery in prior testimony the postmaster general asked congress to consider allowing a change in delivery frequency at the same time the postmaster general task postal management with undertaking an internal review a five day delivery so we have sufficient information and data to share with stakeholders we are in the process of finalizing our study and have targeted the next months to share the results with our stakeholders and to begin a series of community outreach meetings we plan to share the study with employees customers mailers and members of congress moreover we will be asking the postal regulatory commission for an advisory opinion in closing i would like to thank this subcommittee and the oversight and government reform committee for their action on h r twenty two i hope in the near future the house will be able to quickly move retiree health benefit legislation and finally i would like to reiterate a commitment to continuing to make mail up grayson's as efficient as possible while maintaining our excellent levels of service to the nation thank you and i would be pleased to respond to your question literalist on july second the postal service requested a commission advisory opinion on postal service station and branch optimization a consolidation initiative the subject of this hearing docket and two thousand and nine days one was quickly established and the public notified through the federal register the internet and press release this morning the commission held a conference with persons interested in this consolidation to identify expectations for the docket and all procedural concerns with this input the commission will shortly establish the agenda for examining the initiative in addressing all the issues to ensure a wide range of public input the commission is considering holding hearings outside of the worst into d c area and what the commission is being asked to do is determine if the this consolidation initiative will generate changes in the nature of postal service on a nationwide basis and if so issue this advisory opinion that the consolidation process would result in closure decisions which will preserve levels of servants consistent with the policies of post the legislation in short that the process will in fact achieve answers to a lot of the questions that members of the committee have raised that should be addressed we're looking at that process to make sure that all these committee issues a community  a cetera are in fact taken or applied now the process has been around for several years and nearly one hundred closures have occurred some of these which have been addressed here one will occur tomorrow and washburn iowa the new initiative will significantly accelerate that process that began in may of this year with the prescreening for discontinuance of all stations and branches the report to post masters twenty four pay grade level or higher this covers approximately thirty two hundred stations that are primarily located in urban and suburban areas with this  there was some certainty in the sense the guidelines were given that are supposed to be followed by the postal service but they did not specify the number of offices to be discontinued did not quantify the potential changes in the nature of any affected postal service and its not estimated the expected financial set savings questions are being asked in the commission's docket that hopefully will clarify these facts and other aspects and criteria that will be used in the decision process commission recognizes that under the p a the postal service has the flexibility in authority to make rational adjustments to its operations and networks to meet its business needs and create cost savings and efficiencies this is especially important in these financial stressful times but the postal service must be by law accountable and transparent to all postal customers be sensitive to the needs of the community at the local level that it serves and make changes in strategic manner and its most recent report on universal postal service and postal monopoly the commission found that access to postal service is a fundamental aspect of the universal service the two thousand a commission sponsored study found that households tend to utilize their low post office extensively over half the respondents reported that a member of their household visited a post office in the last seven days and additional twenty five reported business within the last thirty days the postal service is obligated under past and current statutes to provide for thorough public notice and input into post office closure decision the statute further gives the commission authority to hear customer complaint appeals of such decisions the commission has long held that a post office is any retail location staffed by postal service employees which obviously includes stations and branches yet notification of the public's right to appeal to the commission is not part of the postal service closure process being examined questions are being submitted have been submitted on this issue in the docket and is likely to receive at their own review in the commission docket now the appeal process is simple it is a letter submitted to the commission by postal patrons in that area saying we weren't notified we weren't whatever it has to do with we the procedures weren't followed it is not a complex go to court procedure i see i'm out of paid in this hearing today i will first provide updated information on the postal service is financial condition and outlook second discussion jihad to ga as decision to place the postal service is financial condition on our high risk list this week and third discuss the need to restructure postal mail processing retail and delivery it works the postal service's financial condition has deteriorated sharply over the past year mail volume is projected to decline twenty eight billion pieces this  year leading to some sobering statistics and net loss of seven billion dollars an increase in outstanding debt by the annual statutory limit of three billion and an unprecedented one billion dollars cash or call that will threaten the service ability to make its mandated annual payment of five point four billion for future retirees health benefits the outlook for fiscal year two thousand and ten is even more challenging as a service is projecting its outstanding debt to increase to thirteen point two billion its fifteen billion dollars statutory limit the postal service urgently needs to restructure to address its current and long term financial viability this week jael added the postal service is financial condition to our list of high risk areas needing attention by congress in the executive branch we have called for a broad restructuring plan that addresses key time frames and the plan should address both short and long term challenges these include realigning postal service is to reflect changes in the use of mail better aligning costs with revenues optimizing its operations networks and workforce increasing mail volumes and revenues and retaining earnings to finance needed investments and repay debt the restructuring plan should also include a strategy for optimizing its networks to eliminate growing excess capacity maintenance backlogs and reduce costs stakeholders need to recognize that major changes urgently needed such action would also set the stage to reduce its workforce or attrition in the next four years a total of three hundred thousand employees are eligible or will be eligible for regular retirement close to half of the career workforce the postal service has taken some network and i'd like to point out several of these in the retail area as discussed today the service recently began a national initiative to consolidate some of its roughly thirty seven thousand post offices branches and stations specifically operations over thirty two hundred retail stations and branches located in urban or suburban areas are being looked at for opportunities for consolidation and decisions are expected starting this october in terms of mail processing the postal service has taken actions to close smaller facilities and consolidate other mail processing and transportation operations however only one of approximately four hundred major processing facilities has been closed with regard to delivery operations and the report being released today to the subcommittee the postal service has every three hundred fifty thousand carriers and delivery costs represent the postal service is the largest cost segment there are two efforts underway to enhance delivery efficiency one realigning city routes is expected to generate about a billion dollars in savings annually to the elimination of work hours and routes reduce space needs and more consistent delivery throughly and realignment about forty three hundred routes have been eliminated today there are some good progress a second delivery related initiative focuses on the one point five billion dollar flat sequencing system that will automatically sort large mail pieces such as catalogs and magazines into the library or on routes covered by the new machines city carriers on average were manually sort nearly five hundred fewer flat sized pieces of mail each day allowing them to spend more time delivering mail in closing while we recognize that the postal service will face resistance in realigning its networks on several fronts we believe broad restructuring is imperative to help the postal service achieve sustainable financial viability for realignment to succeed the present service must use a transparent process that's consistently applied engage with and management associations the mailing industry and political leaders  chaffetz members of the subcommittee the national postal policy council greatly appreciate the opportunity to present its views on the station and branch initiative in a nutshell our members support this initiative to help address the current financial contraction facing u s p s and in the larger context of providing the postmaster general and his team true flexibility to manage and p p c is the trade association for large business users of letter mail primarily and first class before the downturn are approximately thirty members collectively mailed about thirty nine billion pieces and contributed some nine and a half billion dollars in postage every year at the outset let me say that the acceptance of the need for meaningful change in the postal system has been growing in recent days through no fault of its talented management team or its truly dedicated working men and women the postal service is experiencing a catastrophic decline in volume volume that won't come back robustly and for years grappling with the thorny issues of managing u s p s to its actual volume has become essential for preserving a bedrock institution still essential to commerce and communications in the united states in the twenty first century so as one aspect of change we're pleased to be able to discuss this initiative for it is necessary not only in the short term but in the longer term and c is not undertaken a scientific survey of its members but the consensus view is that when the economy comes back mail will not follow there should be some recovery in standard but first class which is the most lucrative for the postal service as you know will continue its decline it at a slower rate we support the initiative because the current system of post offices and other facilities grew up haphazardly with population growth and shifts an orderly rethinking of the system is long overdue and efficiencies and services are very likely to be attained second the initiative will help streamline a system built for far more mail volume than it has or is likely to have for the foreseeable future third a carefully planned and thought through effort to close consolidate facilities should yield some cost savings for the closings and consolidations will occur largely if not exclusively in metropolitan jurisdictions and should lead we hope to a less emotional public reaction than in some smaller communities and given that there are other post offices or facilities nearby there should be continued easy access for the public fifth and most importantly n p c believes that the postmaster general and his team need to have as much flexibility to manage the system as possible to run it like a business over this decade postmaster general potter deputy p m g donaghue and their management team have demonstrated tremendous ability to drive costs out of the system they've done so while improving service and reducing the workforce without alienating the unions and management associations in fact it has been an intense cooperative effort because of that outstanding track record the senior postal management team should be granted broad latitude  system including optimizing stations and branches the urgency animating this plan and much else from u s p s is the daunting financial challenge it confronts you know very well that it's projecting one hundred seventy five billion pieces of mail this year off some thirty seven billion from its peak just two short years ago with thirteen billion dollars drop in revenues so mr chairman m p c is grateful to you ranking member chaffetz chairman towns ranking member i say and the members of the full committee are rapidly reporting out h r twenty two were particularly appreciative of the prime sponsors message me here mchugh and davis we urge h r twenty two's passage by the entire house at the earliest opportunity but regrettably u s p s is going to need further financial attention to right itself when h r twenty two was introduced last winter it seemed to give us vs enough relief unfortunately the celebrating loss of volume since has simply overwhelmed the relief offered through h r twenty two we don't pretend to have the solution many possibilities have been raised in this subcommittee and elsewhere in general we believe that any long term solution should be balanced and call on all postal stakeholders to make equivalent sacrifices to maintain the system however we feel constrained to note that one possibility and exigent rate increase would be profoundly counterproductive we know neither the postal service nor members of congress have called for such an increase but others in the postal community have raised it so let us be direct mail or simply cannot afford an increase they are doing everything they can to restrain costs as their own business is severely declined in this recession the number of layoffs in the postal based industries is at minimum in the hundreds of thousands there are also mergers and bankruptcies budgets for all items in these industries very much including postal are under tremendous pressure even a small increase may have a significant adverse reaction but an increase large enough to address u s p s losses would virtually guarantee a large volume drain postal budgets simply would not stretch to meet higher prices thank you once again for this opportunity prisoner abuse i'll be pleased to answer any questions you may have thank you a short term sadly it's now short term help that h r twenty two gives is imperative the financial condition of the post service is precarious and sadly it's not improving at this point in time post service is have to grow volume it has to become more efficient but at the same time mailers are facing the same financial conditions the twenty two percent drop in standard mail advertising it refle that fact as the economy comes back some of this mail come back but sadly we don't think all of it will come back and mailers cannot shoulder another rate increase matter fact that duplicated in the future with more advance notice and will be taken greater advantage of to try and get mail back into the system looking on the cost side we have to do everything has to be on the table as our group  mailers were willing to talk about everything to try and reduce cost the things you're looking at here today looking at the delivery route adjustments they've been going on for my entire life time my time up here is an employee in the house  one of the complaints that i always had at the committee on post office and civil service was my mail is not coming at the same time complaints from businesses as well as individuals and that is in fact has happened all the time as the demographics the geographic distribution of the american population has changed right now we have to look at it from the point of view of decreased volume decreased  revenue too to afford the root system that we currently have and the good thing is the poll service is working with the n h l see i'm looking at these route adjustments but these have been happening before sadly the economic times are forcing this to happen more rapidly at this point in time but i think from our view the pulse service is doing the right thing in working with their employee groups to try to get this right now it hurts some of our members because they're not going to get the mail at the same time they received it before but that's one of the things that we're all working together to try and keep a pulse or a strong and viable looking at the stations and branches it's our understanding that  is looking at not at rural offices they are looking at the proximity of other stations and branches to the one that they're thinking about closing looking at the retail trends at that branch looking at the impact on the employees the impact on the community which is very important they're looking at the savings the net savings if you close this facility and you have to move employees in the carriers come up and there was a more time the net savings have to be there and then the ability of other stations in branches to handle the traffic that it's being being closed so those are things that i think the set up of the pull services put together they are looking at the right things they're asking the correct questions and there's always the point of a p r c a postal regulatory commission appeal as opposed to rate commission in two thousand and six the p r c did in an opinion did say that they could if it was if this closed the only postal retail service in the community even if it wasn't a specifically a post office with a postmaster but a station branch that they had jurisdiction not everyone agrees but that ability stays and this effort by the postal service doesn't change that fact or we all need the pole service and we all have to chip in all of us have to chip in pronounce your name correctly yes yes yes because i have a whole precinct of murphy's back hall one precinct everybody's name or if you recognize the foreign minister mr chairman and members of the committee thank you for allowing me an opportunity to appear before you today to discuss some of the challenges facing the mailing industry and the postal service my name is michael murphy i'm the president of jap souls and company located in st louis park minnesota we are a family business that has been in operation for more than one hundred years our business is printing and mailing we will produce more than six hundred million pieces of mail this year for all types of customers across the country i am here today also as of the board of the mailing and fulfillment service association m f s a is the only association solely representing the mailing industry we have approximately six hundred members which are comprised of printers mailing service providers product fulfillment companies as well as suppliers to the trade needless to say the postal service is a vital partner in our businesses therefore we believe it is important that the postal service have the complete support of congress to manage its network sufficiently and to scale its infrastructure in proportion to its business needs our company and m f s a members urge the congress to allow the leaders of the postal service to do their jobs and to manage their public institution with the same goal of efficiency as that of private industry the postal services board of governors the postmaster general and the agency's senior executives must be given the latitude to make the decisions necessary to return the system to profitability those decisions include the necessary measures that are essential to control cost and in turn postage rate control we hear some suggest that many of the messages carried by the postal service can be diverted to electronic distribution to the extent that this is true it could result in hundreds of thousands of jobs lost in the industries that depend on this distribution system in just the current recession thousands of jobs have already been lost in the supply chain that relies on the mail our associations experience over the past eighteen months suggests that from just those companies that have gone out of business we have lost one thousand five hundred jobs extrapolating that to the industry as a whole we believe that the industry has lost no less than fifteen thousand permanent jobs during that same period even with the challenges we have been facing there are still more than eight million people whose employment is affected by the postal system we owe it to these people to ensure that the postal system is on firm financial footing and will be a viable public service in the future thank you thank you sir myself five minutes we are start with mr small what i would like to a all these acronyms we had a situation what the mail handlers out in atlanta or i think it was where they identified one of their stations for closure one of the examples and they gave the ploy the opportunity to relocate to oklahoma city as part of that and obviously that that that sent the employees to the roof and i don't think it was a thoughtful process and while i met that the finances here are very grave as a number of you have pointed out there is the need nevertheless to conduct ourselves with i think a thoughtful approach to this consolidation and do it in a way that causes a least bit of disruption and with all respect to these communities and to the employees that are affected and i think it's possible i think you know we've got thirty seven thousand post offices out there and i'm sure that there are some that are close to each other and that we can we can work this out but i have to ask you what are the what are the criteria that making these decisions you've got thirty two hundred that you have identified correct and there are probably you think there's probably a thousand out there are a little less than a thousand that might actually be eligible for closure less than a thousand that require further review ok well i know that the rural post offices are are off the list because people is one of those you've got somebody driving two hundred miles to a post office and i understand so we've got a hold harmless provision for those post offices that says even though they're not making enough money to sustain themselves we're going to believe in that because we've got to provide essential services yet you have a another post office an urban area maybe a poor minority area and inner city that's not as it's not generating enough revenue to sustain itself either and we're going to close that and i think  we would like the opportunity to be able to explain to our constituents what the process was it needs to be to be transparent and needs to be fair and needs to be consistent and hopefully it'll make sense and make sense economically consistent with your goals while at the same time providing providing adequate access so what is one of the one of the factors you look at in determining whether somebody is eligible and the thirty two hundred left how are they determine thank you mr chairman and as i stated and you stated we're looking at now less than a thousand offices because out of thirty two hundred the two thousand two hundred were immediately eliminated for consideration for various reasons which i'll i'll go into as part of the criteria part of the criteria is what is the proximity of nearest services what are the mailing habits and consuming habits of the american public with the postal service within those areas we've found that  we've seen close to five percent less activity at our retail units while the percent of the american public going to our website at u s p s dot com has increased customers also go to various other means of alternate access so we look at the proximity of the nearest services we look at is the radek with parking at the nearest services we look at the mailing habits of the public in that area where a station and branch is being served ok well i think my time is just about expires for us rather than i'll do a follow up later on maybe in the second round him and recognize the gentleman from utah appreciate you all for being here and sharing your comments and expertise i'd like to start with the g a o if i could how many agencies or government entities are currently on the high risk list i'm just trying to get a perspective twenty nine  a twenty nine hundred nine as an end at one point the postal service was taken off the high risk list that's correct and so just to highlight again i know you talked about this in your testimony but so the the top reasons on why the urgency i i think i understand the financial needs but is there something else above and beyond the financial peril that there are some there are two different ways we look at the high risk list one and the one we used with regard to the postal service is areas where agencies that we think are in need of broad transformation so in this case the postal service met that criteria i think the other thing is we track the financial condition over the past year we looked at those numbers deteriorating that made the case more compelling you add in the mail volume drop and it suggests that a broader look at this was needed and we did report made that decision i'd like to hear from you about the five day delivery is that something mr small mr waller that has definitively been decided your thought you're thinking about it that something that you think would happen week in week out we haven't concluded the study we should be finished with the study and the next couple of months but small is your microphone a yes or a little closer a little closer we have yet to complete the study the complete study should be completed shortly and we view it as the only viable option right now that will give me a specific date i don't have a pretty specific date but i'll provide one for the record that will be great and who's participating in that study i mean we have a lot of organizations unions whatnot of that are  here who are participating or more importantly not participating in the input that will go into that study we're working with the various stakeholders to get their feedback our customers the p and also the unions we've talked to the unions about these tough issues associated with five day live or delivery members of congress so we're making sure that we talk with all of our stakeholders to understand what potential issues they would have by going to five day delivery and those of you that represent the use of the postal service more of a customer standpoint can you give me maybe starting with mr murphy your perspective on what would happen with a five day five day deliver well we we would support five day delivery in the sense that it is a big area to control cost and we feel that that is very very important overall for the system to be paid to what's happening in the marketplace so i would rather not have it but it is one of those items that's on the table and will be valuable our membership  delivery is very important for them but i think all of them are looking at one of the tradeoffs the savings from five day delivery what what other things are going to happen to try and improve the pulse service one of the things we have to worry about is dramatic reduction in service and rising rates that really doesn't come out to a very good solution so those are things that we're looking at or when you take a look at an entire were in a similar position to gerry's members that were not so much divided i think the sentiment generally is we wouldn't want to do this we need to have six days of the livery but again what are the tradeoffs how do you how do you get to a position where you've resolved postal services difficulties so as part of a larger solution i think it could be something that could be seriously entertain and it would be if it were done it would be a sacrifice let me just give you one example we have a quite a few banks and financial institutions in our group and for them remittances flowing seven days a week are vital but it's that the longer if the if there's a day of delivery that is taken out then it takes longer for bills to get there in the first place there are changes to float and therefore to business practices natural viability to responsibilities to shareholders and so forth it's not an uncomplicated situation so our view is it's got to be part if it's done part of a larger long term solution thank you i think my time finances why was the postal service taken off the high risk in two thousand and seven a couple things factored into that at that point the postal service didn't have outstanding debt the other thing is predictable in two thousand and seven as well ask these questions this question because the only thing i can think of that is worse than collapse the constitutionally mandated postal service is for it to do what it is doing now falling apart piecemeal before our very eyes and when that happens it's the element of surprise and clear absence of planning my question really goes i suppose  hear to hear of their economies and efficiencies that one would expect from a business that has to do what many have to do now which is simply take seeing all the handwriting on the wall that i think even the average american can see right now what right sizing plan do you have i think if you look at the cost cutting and efficiency gains that we've employed this year we're on track to sable six point one billion dollars the major components of future right sizing of the network is the big issue is to provide significant systemic response to the problem and that would be five day delivery second issue we've undertaken the transformation of our b m c network are you moving toward toward a race in deficit by the laws that operate the postal service without a privatized version of much of what you do they don't deliver the mail but you have gotten into their business have you looked at those businesses to see how your competitors are fairing and whether or not there's anything they're doing that you could benefit from ok yes we're in we're in constant communication with our competitors and matter of fact we have ventures with our competitors such as fed ex with their using their air network to fly our product question i will not object and members have to understand that if you are more transparent about it if it's part of rightsizing we have to be prepared to defend what you have to do with respect the postal service having said that are there any postal post offices the district of columbia postal stations under review for closing with you that's not let any member or to be able to get an answer to i believe that a list was submitted to this committee yesterday offhand i don't i couldn't personally tell you if there are or not stations in the district of columbia but i'd be happy to provide you with a copy for the record i'd appreciate it and this is what what i think needs to happen you are also service is just too slow you're going to have to reach out to communities you're going to have to get feedback you don't have to hear all the protests transparency begets protests you are moving so slow that i think that you are not ahead of the client and forgive me for all of the postal service unless you can hasten this process with a kind of rightsizing that puts it all undertaken could prove to be counterproductive and when i listen to some of the measures we're we're looking at i'm struck by the parallel with the newspaper industry declining advertising accelerated in the recession much of some of which won't come back advertising gravitating toward on online newspapers that are free but not enough to make it a viable business model least not yet giving away newspapers free at metro stations and other places because your competition does it further accelerating the loss of paid subscribers because why would i pay for a newspaper i cannot get free consolidating offices closing bureaus you know downsizing constantly and and yet doesn't seem to have right righted the ship o state if you will in the case of some of the actions being contemplated we're looking at consolidation so there are fewer points of entry in the system which may be a very prudent thing to do but i'm struck that  the competition has points of entry all over the place not full opposite necessarily but very convenient drop off point if i want to participate in their system going to five days not six but i think that the competition is so i'm just wondering i'm not there's no implicit criticism necessarily of the steps but have we looked at the risk consequences by way of productivity cutting measures that congressman condit thanks for the question it's an interesting point in looking at this one of the things we're suggesting is that the postal service needs to articulate the point and it talks about how it can take action but part of that in terms of you mentioned say differing entry points for mail that's why it would be employed to coordinate with the folks in the mailing industry about how that would roll out so it could be done in a way that people understand what that change will what it would entail the postal regulatory commission may have a role in terms of reviewing some of those cases as well there are a lot of different pieces is going to maintaining universal service throughout the country and i understand that some distribution centers from maine to arizona from florida to alaska to do that you would require a network of processing facilities in terms of the retail side one of the things that we noticed there's thirty seven thousand facilities that thirty percent of the retail revenue is not coming through post offices it's coming from alternatives grocery store sales things of that nature in talking with the postal service about this retail initiative one of the things i was struck by is that it's somewhat of a qualitative assessment at the community level trying to ensure that if there's a senior citizen community or groups that are being served that that would be factored into that decision making so there are there are tradeoffs but the other side of it is that there is also a great decline in the amount of mail going through the system and so the then one of the bedrock principles that the postal service has been operating under is being self sustaining so factoring those things into consideration in these changes we think a plan a restructuring plan congress the administration looking at that would be an important  couple things that i like to say first in regards to the list of post office stations and branches under consideration at the meeting i mentioned this morning that occurred at the commission the postal service promised to give a list of the six hundred seventy seven facilities that are going to be studied when they file that that will go up on the p r c dot gov website immediately and that'll be available to all people in the country through that  look at who's been where cetera this issue of looking at it as a whole thing is also a concern issue we look at a process like this last time we did an advisory opinion it was on the the processing facilities and the postal services plan for looking at that and found quite a few problems that existed in the planning process not looking at how many real savings were go achieved through that process and what backlash might occur in productivity secondly in the work the commission has done so far looking at small post not sm reduction from six day to five day one of the things the commission included in its analysis was a estimate of the drop in volume that might occur because and that's about six hundred million dollar impact so looking at all these issues and not looking at it too narrowly is extremely important i thank you mr chairman i see my time is up and i would just say that if mr clay were still here i know he'd want to ask  that going beyond short term measures to return ourselves to solve and see what's the long term business model or copy that is viable but of course mr class not here to and also i want to thank all of the witnesses for appearing i think that some of us have known pretty much that we were going to be at this juncture probably for quite some time  i think we were hoping against hope that we would not really get to this point and so let me just say first of all small i don't in be mr potter yourself and of members of the staff and board of governors as you dry and wrestle with this problem and figure out what's the fairest most effective most efficient way of making sure that our postal service remain solvent recognize in the economics and the status of our economy my question is i know that there is the study underway relative to five day delivery what are the cost cut in proposals did you consider before reaching the point of sort of sablon on the reorganization  facilities plan i think if you look at our cost cutting effort somewhat unable to enable us to and cheap six point one billion dollars this year in cost savings  we've reduced overtime we minimize the use of the supplemental temporary work force we've adjusted routes both city and rural we've currently implemented a network structure change transforming the bulk mail centers into network distribution centers consolidating package and standard operations to realize economies of scale and efficiency in processing and reduced re dundon cs in transportation we've also embarked upon as we was referred to before the a m p effort where we have consolidated outgoing operations to better utilize a quip meant in certain plants as well as compressed tours to again take advantage of the unprecedented dropoff in volume and being able to provide a a more efficient means of utilizing our equipment within our plants so you can one could really say that you're down to the point where you don't have many options left you don't have many places the go i guess we'd say you you're between a rock and a hard place the last big option  is unfortunately the need to go from six to five day delivery that's the one big piece out there that would add to helping us maintain liquid relationship to what they have done and the plan that they've put together i think at this point we have looked looking over the past year some of the low hanging fruit in terms of  over time and things like that have been taking into consideration the rate adjustment process that mr small referenced we've had a report that came out today that talks about that initiative and i think it volumes continue to decline there will be additional opportunities there we still believe that there are opportunities in terms of the broader facilities and we talk about that in terms of the processing network there's some we know there's some consolidation studies that are still underway but we think that this broader plan of the economic stimulus money no every single american it does seem that it would be appropriate that while i would have voted and have voted against the stimulus money that some of those monies should have been allocated to this service which not only benefits individuals but businesses alike and i think we should explore that a little bit more if there are opportunities moving forward it could question for you about the thirty two hundred or so post offices that are close what's the estimated savings by doing that this is a bottom up dollars we won't know until the beginning of october when we continue the other two thousand or so we don't know of any understanding what the whole cost center if you look at the entire cost center of those thirty two hundred offices that includes carrier operations which of course would not be deliver a limb unaided rent ownership of facilities operations that whole cost center is worth sixteen billion dollars so if you break out the labor component certainly it's got to be some estimation what the numbers is that are not well i think i think the reason why we cannot give you an estimate until october is because we have not taken a cookie cutter approach or set targets for how many would need to be eliminated and only those that are in close proximity to provide provide ready access to the community would be under consideration and we just don't know that number until the study is fully completed and have you all taken a position on the bill h r six fifty eight that we heard testimony in panel on a yes and we don't agree with that why not due to our dire financial deteriorating situation we've had this process in place with stations and branches for years that seems to work we have to be able to react quickly and rapidly to this financial situation so if you gave an extra thirty days you think that would be unacceptable i  i believe that the rules that as they're currently applied are adequate mr her is there anything that you can add to what i was asking about previously about the elimination of some of these facilities is there any cost estimates there are several proposals that are floating around the postal service five day delivery elimination of the consolidation of routes those types of things that the g a o looked at what what is realistic in terms of actual cost savings we've seen the two estimates that have been provided the other thing that we've called for in prior testimony before this committee this committee is that a study should be  done should be made public so people can and see and understand what those assumptions are i know the p r c has one estimate for what five day delivery would result in about two billion dollars jobs extracted one point nine and and the estimate from the postal service was significantly higher about three and a half billion so once that comes out we're very interested in taking a hard look at that and i would be happy to work with that committee on that if that would be of help to your other question we also ask about and one thing that's been a bit of a source of frustration is getting estimates about what savings might be achieved we have noted in prior were parked on the retail network that there's a lot of places that are in disrepair and so there's real maintenance backlog so we think there could be cost savings there as well it's not just moving folks but there's also some of these places are really on intellect misra it looks like you want to comment on the yes that this issue is one that is already we're starting to push on in the docket is what are the exact savings and can you bounded in some way if you look at the way costs are accounted for in the postal service retail clerks which is what we're talking about here and then if you add on all the extra costs the space they take up and stuff like that talking about four point one billion for all post offices all stations and branches this is not a big cost item so if you narrow it down just to station and branches which i think it's very important that come out in this hearing that the most the commission has underway to narrow down what is really the even potential savings thank you mr chairman my time's up i would just say that while we continue to talk about cuts and elimination and we also obviously need to look at relevancy and marketing and how we make the post office more relevant in the services and i think one of the things that we need to spend more time on is the  cross functionality that can happen i was very pleased that you have co signed with me the potential of the postal service helping to conduct and do the enumeration portion of the census i think there are other creative other ideas that we can do that can inject some cash sooner rather than later and make the postal service again increasingly relevant in people's lives and we have such great real estate facilities people i mean all these assets are in place and yet i don't believe our other other elements within our own federal government are paying attention to those it's so frustrating when you have the federal government utilizing services outside when we have these services internally and so i think we need to continue to explore that and particularly the timing with the census which i think would be great asset no you'll back the remainder of my excess time thank you let me ask i mean i guess i recognize myself of five minutes  let me ask mr small hypothetical situation we talked earlier about this desire to look at going from six to five day delivery as you know the appropriations committee subcommittee has again mandated that we change six day delivery but let's let's just entertain it hypothetically suppose suppose i had a brother in law that delivered mail on saturdays right now a letter carrier what happens what happens to a lot of carrier he and others when we shift to a five day delivery cycle we certainly understand that change is difficult and are aware of changes that would occur with our employees that assignment would basically be eliminated the way carriers are structured we deliver for six days a week you have a regular carry on route for five of the six days and then you have a carrier who performs the regular carries duties on their day off we have a negotiated agreement with the national association of letter carriers for a supplemental workforce of fifteen thousand transitional employees plus and then annual attrition rate of approximately eleven thousand carriers a year very proud of the fact that we have never had to lay employees off and that we will continue to try to place any employee that is affected but there is a cushion available through the temporary work say or guarantee that there wouldn't be layoffs if we look at it or the time frame by which we would have to get this done there's a possibility that we will be able to assume some of the affected employees through the attrition of eleven thousand carriers and all the so the fifteen thousand that are temporary employees is there a hiring freeze right now yes ok let me let me ask you going back to the consolidation of facilities i know that we own the postal service owns some buildings and then in other cases we actually rent we have long term leases on options and what not when you're looking at potential closure and i know representing a city with fairly high rental space downtown those those expenses to maintain facilities like that of any considerable size it's a pretty expensive option do you have a way of balancing whether or not you close a facility based upon whether it is post office owned or at least i think it would be determined by which facility can absorb the gaining facility we have to weigh the balance the customer input and in fact access and services provided i could think about and i know you mentioned it on fox news yesterday offices that are close block away from each other and my former district i could think of three examples right now where we had stations three grouping stations within a block of each other those are the type of facilities we would look at and we'd have to determine if two facilities were consolidated into one which facility had the adequate space which facility had the adequate parking and then make the determination based on whether it's a lease or an island facility and looking ahead you know i think there's a system in finland  sweden is actually it's actually being replicated here in the united states and either columns on boxes or something like that where a person can go online and see them ale and they see what's what's potentially could be delivered and they if they want to toss it they just that they want to deliver they can click on it and if they don't want to junk mail they can get rid of it by collecting that put in the trash can  that will greatly reduce the volume of mail because people won't have to get their junk mail i don't doesn't make the mailers happy but have you looked at anything like that for the postal service going forward is that the new model should we be preparing for that i particularly do not have much my knowledge is him box but i know there are folks who are studying it within the postal service we're always looking for new  products to bring out to the market i thought i think on the panel we heard earlier about the summer sale we've also introduced a flat rate box and an advertising campaign around the flat rate box which has been  a huge success so far this summer so we're always looking at new products to be able to go to market with to enhance our safety situation thank you my time is those individuals who would have to go and then there would be an opportunity to shift of employees to other facilities the employees would be  moved in compliance with the collective bargaining agreement the other question that i have is actually from the center of selma sir you know i know that we are always trying to make sure that we take into consideration the needs of as many stakeholders as we possibly can and it seems as though we get backed up against the wall you don't have a choice you got to decide something if your members  and associates were to decide what hurt them the most would it be a five day delivery or would it be reorganization of  to mr small welcome when i had the opportunity to work together in clayton years ago and i appreciated that night your commitment to the postal service so don't take personally and question and i'm about to ask you  how does a postal service ensure community participation in the decision making process for the station and branch consolidation after pull that mike a little closer to the station and branch consolidation effort we have basically three different means of which we communicate with the public depending on the size of the community we either send a questionnaire seeking their input to their residence or we post at the local office local station for a period of time seeking their input all p o box holders get a hard copy form within their p box soliciting their feedback and we also will post community notices with the newspapers for five days to see the community input part of the process and we encourage community meetings let's talk about the community meetings do you have any knowledge of how many community meetings you may have held and let's say four four one one one no i don't have that information surely i heard i haven't heard about it and i know there's talk of consolidation there and i think it's important to have community meetings but community meetings where  said would you would you be able to let this committee know what kind of community meetings you're talking about i mean you do actually send a letter to everybody in certain zip code saying we're going to have a meeting at the gallagher post office to talk about postal consolidation and here's what it could mean to the community and we want your import here's the time in a place i'm not aware of meetings like that and if you're and i think that considering the gravity of this you owe it to your customers to do something to do something be no less than that i again i would be happy to provide the committee with a copy of the template that we send to the local districts for dissemination to the community of course each community is different and the make up is desperate so we ask the local offices to just use that as a template and tailor the feedback the surveys and the way they conduct like to have that with respect to cleave in cuyahoga county so we can get into the nitty gritty about the what you saw in terms of public input i look at this mr chairman and members of the comm here's my concern my concern is that you are actually dismantling a service infrastructure thousands and thousands a mailbox is out no one asked me about that as a member of this committee i don't know how many other members were asked about that just take mailboxes out of communities gone now if you're into marketing since you want to show a flag somewhere how does taking mail by out help up service delivery and then you're talking about closing branches so how does that help with service delivery if we're talking about universal service you're what i but there's another game going on here that really is about taking the public well of universal postal service and carving it up and handing it out to special interests and i see the slow and steady dismantling of the postal infrastructure as being an inexorable move in that direction that's all i have to say  list to me and i'm not objecting to the list as i said before indeed i think i have some understanding but i'm not sure i do remember my concern is a slow walk to collapse i certainly appreciate the need for study i do think one has to be careful to look at all all the factors i'm having a hard time understanding why we're just not seeing some of these off of the high risk with i don't think i was the service for two of them frankly i think they need to see the handwriting on the wall before their eyes as as much as possible and i don't i don't  you can't imagine the fact that this has been some tiny baby steps taken here should have removed but missed the small i need to to know now i know from your testimony at page five what you will be looking at considering such factors as customer access service standards cost savings impact on employee environmental impact real estate values all of this makes sense what i don't know from your testimony is how you chose the particular station or branches to look at for those factors firstly be happy to explain as mentioned in mr wallace testimony he talked about e a s twenty four and above offices so let me explain what i need twenty four and above offices and e a s twenty four is the lowest level potential office we're looking at typically e a s twenty four has a post post office where a postmaster is resident and the chief administrator for postal services as well as subordinate stations generally at twenty four there may be three or four stations as you get larger through twenty six and then to a p c s what we call p c s post post offices such as miami where you have fifty stations so we're looking at large groups of stations where you have  offices that are in close proximity to each other that mailing mailers habits and consumers habits have told us that they no longer go to the retail unit that there's been a decline in retail activity and that there's been an increase so these tend to be smaller stations or branches i'm sorry will these tend to be smaller stations of branches they could be larger depending on whether they have adequate space to absorb a neighboring station which is in close proximity they could be two smaller stations that where one has adequate workroom floor space to consolidate the go ahead so we won't know until a complete and thorough review is performed on all those offices on our list going on page five don't think this is rocket science and the notion that we are beginning to look at what offices are too close to one another all may have to be solved is what i mean by slow walking the postal service to collapse and what i mean about spacing the right sizing model earlier rather than later and mr hurd that's what i mean when i say that you can take them off the list all you want to but i can't imagine why they haven't been on the high risk list for for ten years and i don't think dumbing down the list by taking them off and that's what it does is or as i'm concerned to say that something in the in the extreme position of the postal service that we've seen now for years has not been at high risk makes me wonder what in the world is at a high risk i can think of no major entity in the united states at hi thank you well i think this panel has suffered enough and i want to thank you seriously i want to thank you for your willingness to come before the committee to help us with our work and there are as always there are several hearings going are the same time so i would just caution you that there may be members who would like to submit questions in writing and if that is the case i would ask you to respond within seven days if you could thank you very much have a good day at this time i would like to welcome our third i know we are expecting votes of around twelve thirty so we might be able to get everyone seated in begin with the introductions at least  good afternoon it is the custom of this committee to swear all witnesses who are to offer testimony would you please rise and raise your right hand do you solemnly swear that the testimony you are about to give this  committee is the truth the whole truth and nothing but the truth but the records show that all all the witnesses have answered in the affirmative i'd like to briefly i think all of you are aware of the the lighting system here green means you're free to give your five minute address yellow light indicates you've got a wrap up you've got about a minute left and then a red light and  case you should cease offering testimony let me offer some brief introductions although many of the members on this panel have been frequent  witnesses began mr william viruses the president of the american postal workers union mr john haggerty is president of the national postal mail handlers union and mr lewis adkins is executive vice president of the national association of postal supervisors and asked a friend a landel is the new president of the national association of lot of carriers welcome don cantrell is the president of the national rural letter carriers association and mr mark strong as executive vice president of the national league of postmasters of the united states i welcome all i welcome you to make an opening statement you have five minutes return to previous heights until their recently posted executives have asserted that new client in volume was caused by the conversion of hard copy mailed to electronic communications i have last been skeptical of that claim that individual consumers increase use of email and the internet has placed the postal service in jeopardy it is imperative the postal decision makers correctly identify the cause of the reduction in volume and the to increase or decrease i have concluded that the decline in hardcopy in communications been less affected by electronic conversion than that then by the nation's economic downturn the facts are it is important to no our nation's mail volume was highest in two thousand and six when the use of electronic communication was already widespread we must also keep in mind that the mail stream is and will continue to be dominated by business related communications which is especially a sensitive to the economic environment analysts generally separate merriment to household mail and non household mail and review the interactions between these groups in two thousand and six of the two hundred thirteen billion mail pieces one hundred ninety billion involve non non household communications only two point nine percent or nineteen four point four billion pieces in bulk constituted household towers sold mail the business community has explored other means of communications and will continue to do so but these marketing decisions go far beyond the evolution of personal communications today there is no general agreement among novices about the future of commercial messages television radio newspaper e mail and online advertising all receiv of the prospects for growth and there is no conclusive that the evidence that the posters will fail to be as competitive in the future as it was in two thousand and six one respected analysis analysts magn predicts that between now and two thousand and fourteen mail will grow two percent annually yet postal management is betting that mail will cease to be relevant i disagree now has unique advantages over other commercial messaging including targeting attention and retention i predict that hard copy mail will be competitive far into the future i admit i have no crystal ball but neither do the general or the board of governors if they are wrong and i am right the initiative presently underway will leave the postal service ill equipped with mail volume does return station a branch closing and five day delivery schemes unquestionably have a negative effect on the postal monopoly and will impede the posters ability to compete these are acts of surrender when the outcome of the battle is still in doubt nonetheless the posters must respond to the recent declines in melbourne and i commit the cooperation of my union in sensible and effective that bridge regrettably the rest are alleged major reform in two thousand and six has been a major contributor to the posters current financial predicament major mellor association management association the postmaster general the board of governors some labor organ organizations and some members of congress has moved their support a force the post serves to make payments of fourteen billion dollars over the last two years for future retiree health care liabilities that will support is the legislation sharing the responsibility for the post service current financial debacle and the drastic actions undertaken in response i have been consulted by postal management on the subject affecting service and the impact on my members on the closing the station and branches i reminded postal management that the a p w u s p s collective bargaining agreement which remains in force through november twentieth of next year includes the following the parties agree that all the existing retail operations will remain within the installation to which they are part and our future retail operations established within the jurisdiction of an installation job become a part of that installation i personally negotiated that language and know what its intent was at the time  minutes good morning and thank you chairman lanch ranking member chafe it's in the other members of the subcommittee for inviting me to testify here today let me take this opportunity to thank you and all members of the subcommittee for your diligent efforts on h r tw two we look forward to working with you as that legislation and the recently introduced senate bill s fifteen zero seven work their way through the legislative process as requested my testimony today will focus on the current  of the postal service dealing with the closing and consolidation of facilities in the realigning stations and branches i will also discuss the impact of such decisions on the flow of current and future mail and the resulting impact on mail ha postal customers and communities as you know mail handlers work primarily at the large processing facilities at the same time however we represent approximately one thousand mail handlers who are situated at the larger stations and branches while they may be employed at smaller facilities some of these mail handlers actually are assigned to a larger facility as part of their postal installation as we have previously discussed the postal service is proceeding to realign its network of mail processing plants by conducting area mail processing studies i will not repeat prior testimony here but i think i should note that as i have said in prior testimony our concern is a that the process is accomplished uniformly and within the established guidelines and be that the future postal network is not cut too severely such that the postal service will not be prepared to provide universal service and low cost service when mail volumes recover  solution to a rational closing and consolidation approach is to review such changes on a case by case basis following a careful analysis of the facts presented in each situation where the proposal makes economic logistical sense where service standards will not be negatively affected where major mailers in the area will not be inconvenienced and were on the go she added requirements with the unions have been complied with then the mail handlers union will not simply oppose a closing of or consolidation simply for the sake of opposition conversely the postal service should not be closing in consolidating facilities just so the aging agency can say that it is closing in consolidating the impact on mail handlers is very depending on the circumstances but some of the affected employees have had their hours of work or work location drastically altered thereby sera sera severely disrupting their family life employees have had to scramble to make all when a child care arrangements to get their kids to school or their spouses have had to adjust their work schedules to juggle the various responsibilities many employees have been faced with the almost impossible task of either moving their families hundreds of miles away to remain employed by the postal service or to give up their postal careers altogether and i think you highlighted that in your opening statement mr chairman aligning the situation that we talked about at the last hearing where employees were offered jobs some of them four hundred miles away from the current duty station the impact on the customers will also vary depending on the circumstances our concern is that would make we may end up losing business because a major customer decides it's just as easy to use a competitor and they abandon the postal service altogether we also need to factor in the individual customers who need and deserve access to postal services the impact on communities should also be factored into any final decisions on consolidation what will be the impact of a large plant is closed and the employees then are moved to another plant to work in some other community how about local businesses like restaurants and other retail establishments who used to cater to this large factory that employed so many people many of the other topics on which the subcommittee is seeking input really need to be answered by the postal service before we can weigh in on them but as always i would be happy to answer any questions that you might have and again thank you for inviting me to testify national association postal supervisors we are recognized by the united states postal service as representing over thirty five thousand current they're retiring management employees or the postal service i am honored by invitation to appear before you are going to provide  organization through back on the cell service plan to examine the potential calls or our consolidation the many postal station the branches that comprise a national retail network over the years the public service has continued to make min adjustments in the in the rotation of this retail operation turn prove the efficiency of the mail service and his service to the american public the scale of the changes has been relatively small in comparison to what lies before us but now the office of consolidating up to thirty one hundred facilities across the country some in your own congressional districts where significant impacts our customers and your constituents we have concerning the reservations about on the line review process and its right to results  consequences i wish to share your concerns with you right now the postal service of your of approximately thirty one hundred customer service operations is focused on area located primarily in urban centers large several cities are highly developed suburban communities no matter where you go across the country postal service retail operations or any business and get to the communities they serve business their share the general location with the postal service benefits from the postal service retail presence in the community and organization from the lamest support the fish and sea operation of the postal service but the scope of the postal service reveals an potential consolidation can impact nearly ten percent of facilities and there in urban areas enjoy the convenience to walk into their local post office to conduct a poster related business if the person service plans are implemented discussing who will face a distance to the nearest post office that will be greater than the current one a person is not likely to be able to walk the other they who are less likely to connect to the internet where i'm more heavily on their local post office retail unit and will feel a greater loss of convenience and connection to the post local post office in addition the financial savings from consolidation may not be as large as first appear in a facilitator say both delivery and retail the relocation of a care unit to another facility will mean that a person in the building devoted to carrier floor space will become vacant and only the curbside portion of the building devoted to retail operation will continue to be years so the post office determined that it properties where the postal service own the real estate that houses carries and retail operation consolidation the closure of delivery all retail operations at those properties may also be problematic when the sale of that property is attempt meet today's depressed commercial real estate values the closing of the local post office will also result in additional vacancy storefront in an already deeply depressed local economy our organization support the effort and close as many as three one hundred retail are delivering on its significance saving may turn out to be a mirage and that customers may suffer we cannot continue to different disenfranchise cuts in the postal service who live in urban areas lynch ranking member sheva chin other distinguished members of the subcommittee ms norton my name is fred reland i'm the president of the national association of letter carriers which represents more than three hundred thousand active and retired letter carriers nationwide thank you for inviting me to testify i have seen the postal service thrive and i've seen it struggle through some very difficult times but i've never seen a crisis like the one we are facing now volume is expected to drop by ferdie billion pieces its year the worst decline since the one nine hundred thirty s when you couple the economic crisis with the grossly unfair policy advanced by the previous administration to require the postal service to prefund a massive seventy five year liability for future retiree health benefits over just a ten year period it should come as no surprise that the postal service faces a crisis of its own the postal service is responding with service cuts and downsizing its branches station optimization program and a five day delivery study a part of that response as congress reviews these developments that should ensure that the postal service does not make structural decisions that will do more harm than good over the long run downsizing to meet depression level demand without considering the long term impacts on the ability of the postal service to meet new demands when the economy recovers would be short sighted short term savings that undermine the postal services capacity to offer new services and to take advantage of future growth opportunities would be self defeating and he will see as a long history of working with the postal service to improve efficiency and to adjust to change and we have continued that tradition in this crisis we developed a special expedited rata just been processed to help the postal service adjust to the fluctuating mail volume these adjustments along with the initiatives for flat sequencing systems have reduced the number of city carriers by more than eleven thousand during the past year we will save the postal service billions of dollars over time looking ahead it will be just as important to boost postal revenues as it will be to reduce costs we believe the uses of our unmatched delivery network could be expanded to provide a whole range of valuable services like the one proposed by the leaders on the subcommittee to use letter carriers to conduct the next census that's why we must be careful with branch and station consolidations and reject drastic proposals like the elimination of saturday delivery the cost of lost opportunities from service cuts and other operational changes must be recognized the postal service and its employees are doing all that they can to respond to this crisis but congress can also help to both minimize the short term pain of the recession for the postal service its employees and customers and to maximize the long term potential of the postal service they can do so by reforming the retiree health prefunding provisions in the law the current schedule of prefunding payments is an affordable and on reasonable moreover the actuarial methods adopted by o p m to implement the prefunding policy discriminate against the postal service and significantly increase its costs well both h r twenty two and the legislation developed by the office of the management and budget offer similar short term relief for the postal service and while we have given our support to both proposals they simply do not provide a long term solution comprehensive reform is needed to address the postal service's financial situation and future viability overhauling the prefunding policy and reforming the o p s policies with respect to the postal service must be a part of this reform of the postal service is to continue to provide affordable universal postal service the postal service is the nation's oldest and most trusted government agency it would be a tragedy to sacrifice its future by ability because of unfair and questionable policy decisions made by o p m that are fossilized into current law because c b o t scoring rules prevent their reconsideration my members hope that this subcommittee in the full house representatives will not let this happen i want to thank you for this opportunity to testify it's my first time i hope it's not my last time and i would be happy to answer any questions i know that you have to worry about this being your last time carriers are members work in rules suburban and urban areas throughout the united states and function as a post office on wheels because rule letter carriers offer postal customers all of the services performed over the counter at a post office mr chairman first and foremost i'd like to thank you and representative john mchugh and danny davis for your leadership on h r twenty two i'd also like to thank the chairman of the full committee representative and towns for his dedication in getting this important legislation passed at the full committee level while h r twenty two a lot solve all of the postal services problems during this financial crisis it is a step in the right direction we are living in a challenging time our country is in a deep recession and the postal service is a bellwether of the nation's economic wellbeing mail volume is down eleven point nine percent in the first half of this year and the postal service it is expecting to lose approximately seven billion dollars the kind of mail volume has hit the rule carrier craft exterior extremely hard rule carrier pay is based on the evaluative compensation system which is unique not just to the postal service but to american industry in general and our evaluated compensation system each rule carrier is paid an annual salary based upon an estimated amount of time it will take to deliver the mail on his or her individual route th the individual route is based upon an annual mail count whereby over thirty separate elements are counted times are measured the most recent mail counter earlier this year was devastating to our members for the second straight year our members have been hit hard in the pocketbook the average rule route lost just over two hours of valuation per route which equates to more than thirty four hundred dollars a year in annual salary as a results of this year's mail count rule routes were reevaluated and adjusted prior to the two thousand and mail count over forty two thousand real carriers delivered on routes mailed to now the twelve days each pay period after the mail count the number of real carriers who deliver discount a route dropped to just over twenty seven thousand meanwhile the number of carries who delivered eleven out of the twelve days each pay period and still others who deliver twelve out of the twelve days each pay period increased significantly in order to avoid significant salary reductions thousands of rule carriers opted to work an extra day just to keep the same salary they were making prior to the mail count the annual mail count directly affects real carrier salaries and schedule but there are other concerns we have about our very livelihood at the post office or postal service were to consolidate the operations of retail stations and band branches into nearby postal facilities that would only compound what for real carries over the last several years become a serious problem if post offices begin to disappear our carriers will have to travel greater distance to working our customers will increasingly feel isolated from the postal service  these economic times paying close attention to customer service is a key and we would expect the pile of public outcry if post offices stationed in ranches across the country are closed customers especially in rural areas will be particularly inconvenienced and some will unfortunately decided to simply not worth doing business with the postal service we will be sending the wrong message if a cough is across the country begin to close or doors our customers and communities need to know that the postal service is here to stay i'd like to say a few words about the postal service the interest in reducing postal service delivery days instituting five day delivery would likely mean further salary decreases for thousands of carriers not to mention massive job losses it could mean salary cuts and layoffs for workers employed by businesses in the mailing community if five day delivery were implemented are evaluated compensation system which is often praised by the postal service for its sufficiency would need to be reengineered and the rule craft could lose fifty thousand rule carrier so she had jobs mr chairman that has fifty thousand jobs added to the national unemployment rate of almost  percent and that's just from one of the four postal unions mr chairman i know the times and finances are tough right now but in my opinion moving from six to five day delivery would not serve the postal sir would not save the postal service it would only hurt the business model and make other delivery options more attractive to our customers is so desperately needs to attract and retrain retain this would be a terrible  course to chart and as many observers have noted could very well do much more harm than good thank you for allowing me the opportunity to testify before the subcommittee today i'd be happy to answer any and you have your full members may have association representing the interests of tens of thousand of postmasters throughout the united states my name is mark strong and i am the executive vice president of the league more importantly i'm a level twenty four postmaster in sun city arizona an unincorporated area in the phoenix metropolitan area i have served in that capacity since one thousand nine hundred two the league would like to thank the subcommittee and the full committee for reporting h r twenty two without amendment the action has operated as a catalyst and started legislative ball rolling with your permission mr chairman i would like to request that my written testimony be entered into a record and proceed to briefly summarize my testimony not objection a post office and it station branches has a primary responsibility in a given year graphic area for collection delivery and some processing in addition post offices and their station branch and finance units serve a vital function as a network to access points retail sales points and final delivery points for post office box holders a key element of our customer base the league strongly supports consolidation of collection delivery and processing functions where appropriate we are quite concerned however that panic consolidations could lead to consolidating functions in a way that would cost rather than say the postal service money or negatively effect service there's often a good reason why carriers are dispersed throughout a community at station of branches and this reason has to do with urban congestion and traffic rather than mail volume looking at my communities if the carriers from one of my branches were consolidated to another branch or my main post office the heavy traffic in the phoenix metropolitan area would add almost an hour additional time per day to each carrier out i would have to compensate for that time or suffer or service would suffer and to compensate for that is expensive this has to be taken into account there are also questions of suspicion sufficient space in a given facility to take new carriers into that facility it is in my case i don't have any to spare in terms of space i have been adding in my post office almost eight hundred delivery per month for years which means i have been adding carriers that number has decrease significantly over the past few years and it is now at about eighty new delivery points per year per month however last month there were more building permits issued in my area area than there were issued in prior quelled months put together thus i anticipate that my eighty new deliveries points per month will start to grow quite rapidly in the not too distant future i have to start thinking about that now which puts me in an expansion mode not a contraction mo while the leg supports the notion of consolidating carrier function it has more fundamental concerns about consolidating retail functions service has to be our prime consideration looking to the future without good service we have nothing to offer having many retail outlets in the communities allows us to provide better service and closing any significant number of them will hurt surface service and we can't do that the strongest argument for caution is consolidating retail facilities lies in the area of post office boxes today the reality of carrier delivery is that businesses tend to get their mail very late in the day far too late to process and deposit checks the data every seed has businesses have complained about this for years we have told them that the answer to their problem is to rent post office boxes where mail is available no later than eleven a m by reading a post office box small business can pick up their mail process their checks and deposit them the very same day at the local bank with a minimum of hassle this is a widespread practice in the quick act yes two checks that post office boxes provide plays a central role in the financial help to hundreds of thousands of small businesses across the country removing quick access could have a devastating effect on our business customers and their float time means money for our customers and it is up to us to serve them not to have them serve us there is also a fundamental question of how we can consolidate one set of boxes from one post office into another generally there is simply int isn't sufficient room in the second post office to accept the boxes from the first unless more boxes are built in the second office building more boxes would tend to create traffic problems in the second post office since most of these post offices are constructed with a formula for parking that took into account the number of existing boxes we are the postal service and service does not mean forcing a customer to drive five miles in urban traffic to pick up one piece of mail to encounter a five minute wait to park and then a twenty minute wait inside in conclusion i do not want to suggest that no consolidation of carrier and retail functions could occur intelligent consolidation is always a good idea however efficiency service and the needs of the local small business and our customers must come first and that determination should be a local one basically on the the house floor there are fifteen votes and it could involve about an hour and a half least delay the problem is that what will happen is that the two hour two o'clock hearings begin shortly after that series of votes so what i'm going to suggest is while the ranking member and i i have have them back in ten days in order to get the questions and answers on the record if that is not an objection from you then i would like to help that way the other opportunity would be to bifurcate the hearing and call you  just wanted to make sure mr chairman that the congressional research service is c r s report post office and retail postal facility closures overview and issues for congress dated july twenty third two thousand and nine was in the record if it has not already been included i'd ask unanimous consent to have it included in the record without objection right here is not only the consolidation of the facilities stations and branches are also trying to get a sense of what is involved and what the impact of by the postal service to participate and to have your input how has that all gone mr landover as thank you with respect to the consolidation we haven't been approached regarding the adjustment or routes but we have involved in the joint process of adjusting the routes anyway due to the fluctuating volume we've been working with the postal service for a couple of years to find a more efficient way to jointly adjust our routes which of course has been the cessna dated by the drop in volume traditionally we've had volume growth as we started our studies from our collective bargaining agreement we had to pretty much stop in our tracks and find a way to adjust to the falling volume the idea of course is the efficiency and have an eight hours work for eight hours pay so we've been working together we're in our second and third rounds to do that to adjust to the volume we're doing to this year i could tell you with any consolidation to do a car it would just be an extension of what we're doing to adjust the routes obviously it would affect travel time to get to and from the route if you're going from the from a distance different station but the idea would be to jointly get on top of it as it happens and keep everything adjusted to the volume and the location and the adjustments that have to be made  career status and that reduced the number but contracts they were entitled to a leave replacement for each route which makes a little more difficult for them to put a freeze on on hard yeah well let me ask you the same basic same question i know that  the rural post offices are exempt i think from this closure process that that's not entirely true because we're experiencing in especially in the i know in the west concent minnesota areas and up through michigan that we've seen carriers move from one office to another and because we had several calls complain that i don't know the office was necessarily close but ours the delivery function was consolidated and are driving considerably longer just to get to work and then to go back drive that same distance to go out and deliver the route so it's we're not completely immune to it although we haven't seen me admit ask about some of the more urban offices that we have  and what kind of effect we would have as far as adjustment i want to address that just a little bit sure we have been in that process since our existence because we're evaluated and when we're evaluated each year depending on the the volume of mail whether it's going up or down our routes are adjusted accordingly we don't actually have cap on how large the routes can grow which would and when we exceed that they would be adjusted we don't have much of a  bottom and then that's why in my testimony we have a lot of carriers now working all twelve days during a papered because a route of drop below forty hours we don't have a guarantee it's by the actual volume and the what the count  that the route would be so we will have some thirty six thirty seven hour routes and we've we've gone through those adjustments for years and years so it's really not anything new for us what is new is because of the is we're seeing more consolidation of routes even in the rule of more rule areas where the the routes have grown so small that it just makes sense when someone retires to consolidate ok i think my time has expired opportunities i want to take this opportunity to command the employer represented the unions before us because clear that you have done what you could and what you  experience layoffs straight out layoffs or if you've been able to so far it's this downsizing whatever you want to call it has occurred without notices of layoffs in the traditional sense only employees there are exposed to the possibility of layoffs our employees have less than six years of continuous serve have any of those been no there are also other legal impediments to lay off because you must m risk procedures with the layoff procedures because the employees when that's a six years of service who are veterans has a special process that must be used in order to effectuate layout so it's a would be a very complicated tennessee who's offered a job in you know say oklahoma city that's one hundred four miles away and that is they have a choice either quit their job at the post service or little so in effect they may be laid off the second instance is with our part time flexible employees who have no fixed schedules and no guarantee of work hours in many areas of the country now they're only working four hours a paper which is two hours a week while they are in effect laid off the reason i  glad to have this on the record is because i am most concerned about some kind of orderly process i expressed earlier the kind of surprise precipitous layoffs or for that matter precipitous transfer same difference as far as i'm concerned i have closely at this five day week largely because it's one of the few things i think the public is going to throw their hands up bad you can bet if some of those post offices or branches in the district of columbia have to be close i'm going to be besieged with people saying oh please whatever you do don't close out that that postal service i was interested the people have already acclimated themselves to the possibility you did not want to see that happen i agree with mr barak that watch out for calling the decline and fall all together post office constitutional post office nobody up here this evening post office kind of legions out here that nothing else i know ahead nevertheless just as you warn about structural changes there are structural changes occurring to you and yet very little of what we've heard at least until today involve structural responses right back mr haggerty went through a list that interested me because he said case by case basis facts and situation economic and logistical sense negative negatively affect employees negotiated requirements complied with every member that's on take time and should take time and i just think the union and union involvement and what ever whatever happens early is going to be necessary and i've got to ask you once again the five day week given the fact that it's going to be hard just to lay people off some of these people are leaving because they're aging table for the general public i'd like to like to say that you know obviously it has affected my members but this isn't about my members or anybody else's members it's about the institution it's about the postal service obligates going to be h one way or the other and the question is can can there be some kind of a sense is how to get hurt the least mr rolando and i'm going to be looking for advice sure from people on the ground with those of the things like people who saw no one every day except the pope the post man i heard all the great allegiance they had i saw how hard the work was and when you're construct and when you've got some hard choices here i would rather have employe d by hand than to have what we're seeing the post office do now they come each time with what we've got to do with us as if they couldn't have seen that three years ago or four or four or five years ago so that's what i'm putting to you with that one is not something we can agree upon and it's going to be hard for me you know to understand what it is that we can get some kind of consensus on to happen in time to save what is the core and root of service what i think we need to do i believe again that that's a short sighted response to the five day delivery i think they're going down a totally dark road to respond to the crisis what we need to do is expand the business you can look at it going from the greater the daemon damage and the more management is empowered to make the decisions so i would like to see the kind of collaboration that you have already begun to try to save the postal service i don't think it can be saved except with implore you to lab ration you've got in place such a strong collective bargaining system they don't have to come to you when you can delay the thing and the question is how to preserve what you think is in the best interest of all of