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U.S. Postmaster General Patrick Donahoe on the decision to cut Saturday mail and the future of growth for the mail industry.
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-- -- -- In the US.
Postal Service -- -- announcing plans to -- Saturday mail service and joining us now.
Postmaster general Patrick Donahoe.
Thank you for being with us are well there's been huge outcry instantly -- there is any time you guys talk about cutting anything congressman coming out saying they're appalled they want Saturday delivery.
The postal office unions coming out saying this a terrible decision so my first question sir.
Is do you have the authority to do this on your owner unique.
Congressional approval.
-- we think that we have the authority to do an -- on right now if there's a disagreement about that.
We've got -- a few more weeks before any kind of continuing resolution legislatively would be done let's work -- out.
The Postal Service needs to move to a five day delivery schedule and six -- packaged as we've lost way too much money.
It's a correct business decision that's responsible and its common sense.
Less than half of business mailers even say they want Saturday service at all -- -- continue to deliver packages on -- that -- why -- we get deeper cut.
Are you failing to make deep enough cuts here.
We're not -- the package business -- Postal Service is growing at a very brisk rate.
14% up over last two years are 22 of our ten largest customers right now are UPS and FedEx we deliver last mile for them.
EBay and Amazon are also in the top ten that's the growth area that's the future that's -- going to be.
OK and meanwhile your regular mail volume I believe was down tonight 25%.
And less than a decade.
You've got I count maybe forty billion dollars in losses and the just the past have six years or so.
-- or compensation expense which runs a good kind of 4050 billion a year it's that only 15%.
-- a time when your business has fallen even more.
Instead of closing Saturday service.
Why not reduced pension costs and benefits and pay.
Here's where are with all this from from wage perspective we've negotiated -- -- traded contracts with our unions.
They've either received no increases -- small increases we've substantially increased.
The percentage of not for employees in that -- 20% across the board much better than any other company any other unionized companies face so they've given back.
From a standpoint of the losses they are tied to our requirement to pre -- for retiree health benefits.
-- on record I don't pursue with congress to get congress' approval to move all the federal system into a competitive health care sensible save a seven.
Billion dollars a year that's for the savings.
I see if they'll let you do that of course -- unions might have a a problem of that to gone on to the market sort of giving it could shear packages you have the Postal Service.
Now we need are at a Wall Street guys they get a better package OK -- -- Wall Street guys who have looked at the Postal Service as a business who basically say you know what the biggest.
A portion of what they deliver is junk mail no one wants why don't they raise prices triple prices to businesses for bailing out that junk mail and -- of that stuff out and make more money.
Mail is the most direct way to get in front of a customer's -- period and their end of discussion is as the most track of -- -- It wouldn't be used -- that wasn't effective.
People get a two and three and 4% return on mail it -- digital it beats TV it beats revenue it's the most direct way to get in front of a customer size.
That's why it's still there we think that tying -- in with digital going forward so you can use mail to get you to a website is even more growth opportunities.
Okay peace -- detailed lot cheaper to deliver digital that's for sure one last things -- when that we ought to go quick.
Why not just spin off the post office as a private company I think there's about I bankers would -- in love -- carve it up and do some things to it.
How about just -- and entirely private stay off.
Here's here's the way you have to look at the supposed to service -- federal government.
Universal service of the universal price the problem want that you face is is that we would never be able to provide.
Any title level service when you get out into the rural areas and even in some of the urban areas if you.
Sick with a model that you go a -- percent.
The pay for service like we do now.
It in the private sector you'd have to make some tough decisions we take -- tax money we don't want tax money that we.
Need to be it affordable terms of bringing -- -- the system recover that universal's.
The FB -- deregulate phone system -- take all that rural stuff.
And carbon put into a separate company that specializes that really hard to deliver stuff all right thank you so much for being right here postmaster general Patrick Don well good luck and get -- -- -- -- -- Thank you.
