UPDATE: Postmaster gives direct message about mail's future

By Cami Joner, Columbian retail & real estate reporter

Published:

Updated: August 21, 2012, 7:34 PM

 
photoU.S. Postmaster General Patrick Donahoe waits to speak at a convention at the Hilton Vancouver Washington on Tuesday.

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photoA group of retired and off-duty letter carriers, along with other community members, gathered outside the Hilton Vancouver Washington on Tuesday morning to protest cuts to the U.S. Postal Service.

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U.S. Postmaster General Patrick Donahoe, who swept into Vancouver on Tuesday to promote a service that predates the American Revolution, said he just wants to run an agency that is fiscally sound.

But Donahoe, a 37-year veteran employee of the U.S. Postal Service and its 73rd postmaster general, has plenty of detractors, and some of them were outside the Hilton as he spoke to hundreds in the hotel’s ballroom. Charged with transforming the cash-strapped agency into a profitable enterprise, Donahoe has tightened the purse strings with hiring freezes, post office closures and a host of well-publicized, cost-cutting proposals such as eliminating the Saturday mail delivery and shutting down processing centers. He is looking for billions of dollars in savings.

“It’s an institution that’s being dismantled right before our eyes,” charged James Cook, president of the Portland-area letter carriers’ union, which represents about 1,400 mail delivery workers.

Cook attended Donahue’s talk as about 50 union members and supporters marched outside the speech venue, passing out “wanted” posters with an image of Donahoe as the postmaster spoke inside to firms that depend on the mailing industry. The fliers charged Donahoe with the “willful destruction of mail service,” among other charges.

Tight security downtown

Donahoe’s visit prompted high security measures, with Vancouver police on the scene and procedures that included a required press escort into the conference.

“My friends outside are upset by the downsizing,” Donahoe said of the demonstration.

But after losing more than 30 percent of its mail delivery volume, “you have to face facts,” Donahoe told an audience of about 250 business representatives from the Greater Portland Postal Customer Council’s annual Mailer’s Conference and Expo.

“Like any other business, we have to work to get debt free and make money,” said Donahoe, who was appointed Postmaster General in 2010. That’s a challenge as the Internet continues to shrink postal business, he said.

The Postal Service’s challenges, he said, are similar to those facing newspapers, insurance companies and banks.

“When you take a look at the postal industry, you see the same problems,” forcing drastic measures, Donahoe told his audience of mail-dependent companies such as paper, printing and big mailing firms.

The economic slump and persistent fear of spending haven’t helped with the struggle, said Donahoe, even though a bump in national business investment and payroll have historically translated to more postal service business. The uptick has been slower in this recovery, and it’s offset by the fact that more companies — and customers — are making the switch to online bill-paying programs.

Overall business has dropped for his quasi-public corporation, which in five years saw its delivery volume drop nearly 25 percent, from 213 billion pieces of mail in 2006 to 160 billion pieces in 2011.

On the brighter side, Internet e-commerce business increased postal revenue from package delivery by 9.5 percent this year, compared with the same period last year, Donahoe said.

He also talked up the value of direct-mail markets. “Standard mail is the best way to reach your customer,” Donahoe said. “You can advertise on Facebook, but I don’t see how you can trace the number of “Likes” to (return on investment).”

He urged his audience to “educate Congress,” in the hopes it will reverse its mandate that USPS continue Saturday mail service. Donahoe estimates an end to Saturday delivery would save his agency $2.7 billion a year.

Congress also holds control of the postal service mandate to pre-fund the health benefits of current employees for the next 75 years, a measure that could cost the agency an estimated $5.5 billion a year. Two legally required payments for future postal retirees’ health benefits — $5.5 billion due this month, and another $5.6 billion due in September — will be left unpaid, the mail agency has said.

At least one Vancouver letter carrier who participated in Tuesday’s demonstration said he agreed with Donahoe’s plea to reduce or refinance the $5.5 billion benefits payment.

“That hamstrings us right off the bat. It needs to be restructured or go away,” said Mike Blaisey, a Vancouver letter carrier who marched with Tuesday’s protesters. “That’s something I believe the whole postal service would agree on.”

But Blaisey said Donahoe’s policies should focus on growing the business side of the U.S. Postal Service instead of cost-cutting measures, expected to cost about 100,000 workers their jobs across the nation. To make matters worse, Blaisey predicted Donahoe’s drastic measures would alienate rural citizens and others who depend on the U.S. mail.

“Our main concern is not only protecting workers but protecting our customers,” he said, adding that some rely on the mail to send and receive prescription medicine, packaging and time-sensitive billings.

“That’s what it’s all about, the American people,” Blaisey said.

Columbian staff writer Paul Suarez contributed to this story.