The revenue-hungry U.S. Postal Service is losing business and money because it "overcharges" one of its biggest customers, the United States Government, up to 13 cents for each heavy envelope it delivers.
Ironically, a growing number of government agencies are switching part of their mailing business to the United Parcel Service. UPS is a major private industry competitor of the federal mail-moving corporation.
Through a quirk in rate-setting methods, the Postal Service generally charges federal customers more than the standard rate for envelopes that weigh five ounces or more. The taxpayers ultimately foot the higher bill, whether agencies use the higher federal-charged rate or the less expensive, but still costly, United Parcel Service fee.
Because it uses a weighted average to determine fees to federal agencies, the Postal Service often bills government offices more per piece than the 80-cent minimum rate charged by the private firm for handling the same item. The result is that agencies do not get the 67-cent-per-five-ounce rate charged other postal customers.
Two major federal mailers -- the Internal Revenue Service and Government Printing Office -- have already shifted part of their business to United Parcel Service.
GPO sells around 58 million items annually. Eighty-five percent are handled by mail. Its federal postage bill has remained almost constant at $12 million. But the amount it pays the private firm (now $350,000 a year) is increasing.
IRS mails income tax forms at a cheap bulk rate. But for other items and documents to the public it often finds industry less expensive than government for delivery.
Postal officials say they are aware of the "overcharge" problem. They hope soon to come up with a new pricing system for large envelopes that will lure government agencies back to use government delivery methods.
Meantime, the loss of business although relatively slight now, has worried postal service brass. They have invested more than a billion dollars in large package-sorting factories and machinery. Despite this, the United Parcel Service has "skimmed" much of its business both because of better or equal rates and better delivery times. This has cost the postal service revenue, left it with a larger proportion of less-desirable (costly) parcels to carry and threatened thousands of postal jobs.
More Troubles: As if the U.S. Postal Service didn't have enough problems with service, inflation and automation, the leaders of its bigger unions now want the resignation of Postmaster General William Bolger.
At the wrap-up meeting of the American Postal Workers Union board yesterday, leaders of the 300,000 member union said Bolger should resign because of continuing payroll flaps short-changing workers. APWU President Emmet Andrews said computer errors and accounting problems since early last year have resulted in employes being short-changed, or being paid late, by as much as $100 million. The AFL-CIO union's board voted unanimously to ask the Postal Service Board of Governors to fire Bolger, a career man who heads the Postal Service.
The payroll problems -- as pointed out here a couple of months ago -- resulted from a change in payroll procedures ordered by Congress. It required the USPS to double the amount of paperwork and time used to compute regular and premium pay.
As a result, many workers checks have been delayed. In some post offices, employes have been paid in cash or by money order, getting 80 cents on the dollar to make up for tax and retirement deductions. Andrews said postal officials have repeatedly set deadlines for clearing up the problem, and repeatedly missed them. He said many workers are "frantic" now with tax-time approaching, because they do not have documents showing what they earned, and what taxes have been withheld from their pay.
Bolger replied to the APWU charges by acknowledging "some problems" in the payroll system. But he accused the union of exaggerating the situation "apparently in an effort to bring pressure on management to rehire" workers fired during an illegal wildcat strike last summer. Bolger said less than "three quarters of 1 percent" of the USPS's biweekly $436 million payroll had been affected by the problem. And, he said, he isn't planning to resign.