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October 21, 2011

The National Association of Letter Carriers, the labor union representing more than 280,000 current and retired postal employees, has hired Ron Bloom, a restructuring expert who was involved with the restructure of the U.S. automobile and steel industries, along with Lazard, the financial advisory and asset management company, to develop a strategy to reinvigorate the U.S. postal service.

The union has retained Mr. Boom and Lazard to explore and expand on the various solutions to deal with the postal service’s fiscal crisis including long-range business strategies. The union’s decision comes as the U.S. postal service, confronted with a financial deficit of almost $10 billion for the current fiscal year, is facing critical issues going forward. With almost 600,000 employees, the postal service has huge labor costs that are not sustainable with the rapid decline of first-class mail, the major source of its revenue. In just over the last five years, mail volume for first class mail has declined 25%, including a 36% in individual letters.

Although the postal service’s executives are proposing major cutbacks to its workforce (estimates are as high as 220,000 jobs), postal locations and delivery days (elimination of Saturday delivery), the union is indicating that it wants to shift the discussion toward growth strategies that include using the postal service’s vast network of retail outlets, letter carriers and vehicles as an asset which could do more than deliver mail. This could include exploring new business lines that including performing municipal services like license renewals, voter registration, and installing weather or air quality monitors. Although current U.S. law limits the postal services’ ability to diversify, there is considerable debate growing within the Congress to change this. 10-21-2011.

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