The USPS issued a proposal to relocate the bypass mail hubs from larger rural communities like Bethel, to much smaller villages such as Anaktuvuk Pass.

The problem is many of the small villages on the Postal Service list don't have the infrastructure to accommodate the aircraft used to move the mail.

“This is huge. If this proposal is implemented, our direct cost of doing business would increase dramatically,” said Wilfred “Boyuck” Ryan, president of Arctic Transportation Services, which is contracted to carry bypass mail. “We would have to build up the infrastructure, and move assets into the villages to participate.”

Bypass mail is any shipment that does not go through the post office. Mail and other cargo is moved directly from warehouse or retail store directly to the air carrier — thus by-passing the post office — to be flown to recipients. The postal service subsidizes the cost of the shipments. Annual costs are about $100 million.

Carriers worry the proposal will dampen passenger services to rural communities and hurt the industry's safety record.

“There are always carriers out there that will be willing to meet our needs,” said Steve Deaton, a USPS mail specialist. “Entrepreneurs who can find a way to make things work.”

Bypassing the hubs

In 1970, Sen. Ted Stevens, R-Alaska, secured legislation for bypass mail, a system unique to Alaska, where shipments weighing at least 1,000 pounds are stamped as airmail but never touched by postal workers and delivered at less expensive parcel post rates.

The program was overhauled in 2002, limiting the number of companies that could carry the mail.

The USPS now tenders mainline mail to Alaska Airlines, Everts Air Cargo, Northern Air Cargo and Lynden to move the shipments from Anchorage or Fairbanks to rural hubs in Bethel, Nome, Kotzebue and Dillingham. Shipments are wrapped in plastic on pallets, separated at the hubs and flown by smaller aircraft as Bush bypass mail.

The USPS now wants to bypass the larger hubs, and instead name 14 villages as hub communities for mainline bypass mail.

Villages included in the proposal are Anaktuvuk Pass, Holy Cross, Kiana, Point Hope, Sand Point, Shishmaref, Togiak, Eagle, Hooper Bay, Pilot Point, Red Devil, Tanana, Wainwright and Savoonga. Chevak also asked to be listed as a hub.

USPS officials said the move would cut $7 million a year from the $100 million annual cost of bypass mail. Mail is subsidized at a lower rate when it is flown to a mainline hub, at 40 cents a pound, verses $1 a pound to smaller areas.

But many of the villages on the proposed list have short runways and can't accommodate the aircraft used to carry the mail. Many airports don't have fuel service or hangars, facilities for maintenance or places to store the mail once it's delivered.

“While this will create jobs in the villages, and offers some business opportunities for the villages, they are probably going to really sock it to us for fuel and other expenses,” said Ryan, originally from Unalakleet on the Norton Sound.

Alaska air carriers are worried their expenses will go up and their mail revenues will go down. Carriers are reviewing the proposal and will try to accommodate the Postal Service. Currently, moving the mail comprises a big chunk of their business revenue. Moving the bypass mail from rural hubs to villages accounts for 45 percent of Arctic Transportation Services' revenue, Ryan said. Northern Air Cargo said bypass mail accounts for 65 percent of its annual revenue stream.

Seating and safety concerns

If the proposal passes, villages will receive flights from Anchorage and Fairbanks. But how the move might affect village passenger service is still unknown.

Creating the hubs in smaller villages could have a negative effect on places like Bethel, as it would mean fewer flights to and from the village. Bethel would also lose mail flights to Chevak, Scammon Bay, Newtok, Toksook Bay, Tununak, Mekyoruk and Hooper Bay. Since shipping mail plays a large part in deferring expenses to village flights, remaining flights would be more costly.

The more remote areas may also have a harder time accessing health and social services because of fewer flights, officials said.

But one of the biggest concerns is safety. In the early days of the program, nearly anyone with a plane and a commercial license could carry mail. Accident and fatality rates were among the worst in the world. The hub system was employed in large part to improve safety.

Industry insiders say the proposed village hub system will force carriers to revert back to small planes, which will lead to higher accident rates.

“This goes against the intent of the Rural Services Improvement Act, and will force mail onto smaller aircraft,” said Ryan. “This will take service back the way it was in the 1970s when there were mail-only carriers.”

Sen. Stevens championed the Rural Services Improvement Act, referred to as RSIA, to essentially force mail carriers to advance to a higher, stricter aviation standard, known as Part 121. The act requires that airlines carrying mail also carry passengers using aircraft with at least 10 seats.

Companies flying under Part 121 regulations have fewer accidents.

“The biggest concern up front is about safety,” said Ryan, who is president of the Alaska Air Carriers Association.

“We have strong safety concerns about this proposal,” said Jim LaBelle, field chief for the National Transportation Safety Board in Alaska. “Because of the locations, there will be a degradation in the type of aircraft used that do not have enhanced Instrument Flight Rule equipment, or infrastructure that exists in the current rural hubs. You will also see the loss of two-pilot twin turbo-prop aircraft that will be replaced with single engine piston airplanes being flown by a single pilot.”

In December 1995, the National Transportation Safety Board issued a safety letter stating the postal service was one of the major factors that pushed pilots into making unsafe flights in areas that had poor infrastructure, rugged terrain and offered no weather observations.

Alaska air carriers are currently working to evaluate and respond to the proposal. The USPS held several meetings in Anchorage and Fairbanks in October, and additional meetings were scheduled for November in the villages.

The USPS has until Oct. 1, 2008, to decide whether it will implement the changes.