The Postal Regulatory Commission heard testimony Monday from businesses that oppose an end to mail delivery on Saturdays, a move the postal service says would save more than $3 billion annually.
Among them, CVS Caremark Co. said a five-day delivery service would impede the growth of mail-order pharmaceuticals and keep vital medications from patients. Kenneth Czarnecki, CVS Caremark senior vice president of Mail Pharmacy Operations, said that by eliminating a day of delivery, the Postal Service would allow competitors to drastically raise their rates for Saturday delivery. Customers would have to absorb those costs.
“Mail order pharmacies and other merchants will have no choice but to shift these costs to patients,” Czarnecki said. Cutting Saturday delivery could delay about 300,000 orders, the company has said.
Under the five-day plan, letter carriers would stop deliveries on Saturdays as well as pickups from blue collection boxes. Mail would be accepted at post offices on Saturdays but wouldn’t be processed until after the weekend. Express mail and remittance mail services would continue seven days a week.
If approved by the regulatory commission and Congress, the plan would be implemented by next summer. Congress currently mandates delivery to all U.S. addresses six days a week.
CVS is the same mail pharmacy that never guarantees delivery and always passes on the cost of expedited delivery to the customer anyway. So what is the difference? Why does CVS care? And why should everyone pay to support the USPS because a CVS/Caremark patient didn’t order their 90-day supply of pills early enough? Mail pharmacy medications should reduce urgency and the chance of missing doses, not increase it due to one missing day of postal carrier service. CVS is just out in front of the USPS issue so they can claim they tried while gouging their customers. The other carriers (Medco, United, ESI) will follow suit.
This sounds like cvs whats to raise there rates and blame it on the postal service ,It will not make any diffrence just order sooner
The post office doesn’t cost us anything. They borrow just like all other big businesses during a down turn. My problem is with everyone cutting service to save money – are people so eager to save a buck that we won’t support companies that try to do a good job and therefore have to charge more? If so, we deserve what we get.
The postal service is a not for profit entity. They are also not required to offer a financial statement. The numbers they show us are faulty in this way: According to the latest figures from Quarter II Fiscal Year 2010 ending March 31, 2010 :
A link for reference: http://www.usps.com/financials/_pdf/Quarter_II_FY10_10Q_Final.pdf
On page 3 of the PDF, they note operating expenses of $18,250,000 which an amount of this marked as “OTHER” makes up $2,272,000. What is “OTHER”? Flip over to page 27 of the PDF, and “OTHER” is broken down. Depreciation and
Amortization makes up $597,000,000 of this number. Depreciation is the process by which a company gradually records the loss in value of a fixed asset. The purpose of recording depreciation as an expense over a period is to spread the initial purchase price of the fixed asset over its useful life. Each time a company prepares its financial statements, it records a depreciation expense to allocate the loss in value of the machines, equipment or cars it has purchased. However, unlike other expenses, depreciation expense is a “non-cash” charge. This simply means that no money is actually paid at the time in which the expense is incurred. Amortization is the schedule of depreciation. So for cash flow purposes, INCOME minus EXPENSES does not show that this money was deducted but never spent. If we add this number back in, it will show for the 3 months ending March 31,2010 that the loss is $987,000,000 instead of $1,584,000,000. Yes, that is alot of money. However, if we look at the mail volume of the post office during that time, the USPS delivered FIRST CLASS MAIL alone: 19,999,000,000 pieces of FIRST CLASS MAIL. If we were to split the NET LOSS over each piece of FIRST CLASS MAIL, we would have: $987,000,000 divided by 19,999,000,000 pieces of FIRST CLASS MAIL would equal 4.9 cents per first class mail. If the cost were spread over entire mail volume it would equal 2.3 cents per each piece of mail handled by the postal service.
The Postal Service should remember their last name: Service. They are not a company that sells stamps and boxes. They provide a service. And like most service companies, the big expense is labor. If you look in the post office, there are 2 types of mail carriers: CITY & RURAL. The city carriers drive the white trucks and have 5 rows of mail to case and deliver. The Rural carriers usually drive their own cars and have 6 rows of mail to deliver. The other difference is that Rural Carriers are paid evaluated time, and the City Carriers are paid by the hour. They deliver 5 rows of mail instead of six that the rural carriers do, and take longer to do it. Why? One factor is that City Carriers provide to the door delivery. Every to the door delivery means that the city carrier drives to the house, rolls up the windows, curbs the wheels, sets the parking brake, locks the door, walks to the house and delivers the mail, and then walks back to the truck, unlocks the door, drives a few homes down and repeats the process. They cannot leave the mail unattended, so it is locked up at every address. These guys are getting paid by the hour. They deliver less mail than the rural carriers because of all of this out of the truck time. They should only be leaving the truck for a signature of for something that will not fit in a curbside box. If we quit to the door delivery, we would save 17% of labor because we would be delivering more mail in less time.
Instead of cutting service and cutting out Saturday Delivery, lets do the smart thing and run the Postal Service like a business. Lets keep Saturday delivery.
Brian Jordan
Conway, SC