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Posted at 05:33 PM ET, 04/25/2012

Senate OKs Postal Service overhaul bill: What’s at stake for small businesses?


The Senate proposal would prevent the U.S. Postal Service from cutting Saturday delivery for two years. (David Paul Morris - BLOOMBERG)
The Senate has approved a plan to overhaul the government’s efforts to rescue the United States Postal Service, but the cost of the measure may make it a tough sell in the House.

On Wednesday, Senators voted 62 to 37 to approve the bill, which would give the deeply indebted agency nearly $11 billion toward buyouts and early retirement incentives for thousands of workers, simplify the process for closing post offices and mail distribution centers, and establish several new service standards.

The Senate proposal offers an alternative to what many consider more costly changes, like eliminating Saturday service, delaying the delivery of first-class mail and ultimately shuttering hundreds of offices resulting in the loss of thousands of jobs. But the bill faces a number of hurdles in the opposite chamber, particularly when House Republicans note the $33.6 billion price tag attached to the measure.

Small business owners have long been enormously reliant on the Postal Service, in many cases to both deliver the goods and materials they need to run their companies as well as ship their products out to their customers. A number of them recently shared with us exactly what they have at stake when it comes to the future of the agency.

Nancy Aber Goshow, founder and managing partner of Goshow Architects, on the importance of saving Saturday service:

In order for us to adapt to the five-day delivery schedule, we would need to schedule billing more strategically, adjusting our billing cycle to accommodate the reduced service, and encourage other companies and government agencies to increase their digital scope in this area. As a woman-owned small business, we feel strongly that further cutbacks in delivery service would seriously jeopardize our accounts payable, receivables and cash flow.

Jenifer Caplan, president of Footzyrolls, on the effect of increased shipping rates:

An increase in rates would go directly to affect our profitability. We are constantly looking for ways to cut costs and this would just increase them, though I hope not to the point where we would have to start looking at the alternative. The real issue is that we are competing with companies like Zappos and Amazon that ship so many items they get the best rates and can offer free shipping and absorb the loss as an operating cost. As a small business owner, I do not have that luxury and I actually have to charge for shipping and my customers never want to pay shipping. An increase in pricing would make it even more difficult to compete with the big guys out there.

Tim Smith, owner of Papa Jazz Record Shoppe in Columbia, S.C., on potential problems on the receiving end.

Shipping to our customers is not our only concern. Many of the products we receive are sent to us via USPS. If our customer suppliers have to pay more to send us their products on a Saturday (often the only time people have for these matters), that will increase our purchasing costs. This extra cost must then be passed on to our customers, which will decrease our sales.

Gloria Larkin, president of TargetGov, on alternatives to working with the Postal Service:

Our business will adapt, and we will use other services to deliver our products if the post office no longer offers what we need to support our customers. Moreover, if the U.S. Postal Service customer service continues to decline, using other sources to provide better, more responsive service will be a welcome, if somewhat expensive, change.

How would your business be affected by the proposed changes to the U.S. Postal Service? How should the government’s rescue efforts be structured? Please share your take with us in the comments below.

Follow On Small Business and J.D. Harrison .

By  |  05:33 PM ET, 04/25/2012

Tags:  small business, postal service

 
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