Postal reform includes Alaska provisions to reduce rural rates


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The U.S. Postal Service has agreed to reform its pricing structure and operations in some parts of Alaska, according to Sen. Mark Begich.

Rates on packages heavier than 50 pounds increased by up to 50 percent Jan. 26 on some routes in rural Alaska as part of a widespread rate increase, Begich told reporters during a conference a Feb. 6 conference call from his Washington, D.C. office.

Begich said Postmaster General Patrick R. Donahoe indicated changes would be made as soon as possible to roll back rate increases in areas where the Postal Service is the only parcel courier.

“If they can determine there is competition for postal service then there can be rate issues,” Begich said. “In this case we know, and the Postmaster General absolutely without question said this was an unintended consequence of a national plan they have. They recognize that the rural areas of Alaska don’t have competition.”

He added that any future rate increases would go through a formal, public process.

The rollbacks will go into effect “as soon as (the Postal Service) can fix the dials and get the notices out,” he said.

Begich serves on the Senate Homeland Security and Governmental Affairs Committee that has oversight of the Postal Service.

He said the Bypass Mail program, which transports all kinds of goods to rural communities, would remain unchanged in the Postal Reform Act of 2013 that the committee also approved Feb. 6.

Additionally, Donahoe agreed to give Southeast Alaska mail processing procedures a makeover, according to Begich. In the future, mail staying in the Ketchikan-Prince of Wales Island area will be sorted out and not be sent to Juneau for processing in an effort to speed up delivery.

Parcels mailed from far Southeast going to the Lower 48 or other areas of Alaska will now go to Anchorage and then on to their destinations as well. In the past those parcels going Outside would go to Juneau and Seattle before the final leg of their journey.

“It’ll cut out a lot of time and waste and it’ll get the packages you’re sending outside of Alaska, or even in Alaska — outside of Southeast — much faster,” Begich said.

The Postal Reform Act also puts a one-year moratorium in place on post office closings and requires a lengthy public process if the service wishes to close an outpost after that year.

Language in the bill also prevents a post office from being closed if it is farther than “10 miles of driving distance” from the nearest other post office, Begich said. The Douglas Post Office was added to a protected list because it falls under protection parameters due to it being connected by a bridge to the post office in Juneau, he noted.

Prior, roughly 30 post offices across the state were at risk of being closed or having service reduced, he said.

The legislation is an attempt to give the struggling Postal Service increased financial flexibility. If passed in its current form, the Postal Reform Act would authorize the service to start general five-day per week delivery to street addresses — likely eliminating Saturday mail service — beginning a year or more after the bill is enacted.

On Feb. 7 the Postal Service reported a first quarter 2014 fiscal year net loss of $354 million. It marked the 19th net loss over the last 21 quarters, according to a service release.

“The Postal Service is doing its part within the bounds of the law to right-size the organization, and I am very proud of the achievements we have made to reduce costs while significantly growing our package business,” Donahoe said in a formal statement. “We cannot return the organization to long-term financial stability without passage of comprehensive postal reform legislation.”

Approximately 22,800 postal employees took advantage of a voluntary early retirement program and enabled the service to cut labor costs in 2013, according to a statement from Joseph Corbett, USPS vice president and chief financial officer.

The Postal Reform Act would also reduce the pre-funding requirement for retiree health benefits from 100 percent to 80 percent of the projected liability, according to a Congressional Research Service report.

Additionally, it allows for the Postal Service to use up to $6 billion of any possible funding surplus to repay debt obligations. As it stands and if no legislative action is taken, the Postal Service is at risk of defaulting on $5.7 billion in retiree health benefits because of a prefunding payment due on Sept. 30, 2014, the Feb. 7 release states.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

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