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Washington, DC.

The subcommittees met at 2:05 p.m., pursuant to call, in room 311, Cannon House Office Building, Hon. Robert Garcia (chairman of the Subcommittee on Postal Operations and Services) presiding. Mr. ACKERMAN [presiding]. The committee meeting is called to order.

I would like to announce that both Congressman Garcia and Congressman Leland are unavoidably delayed and are expected to be here. Chairman Ford, the chairman of the full committee, will be coming a little bit later on today. So I guess it is up to me at my first appearance at the subcommittee as a freshman to assume a good comfortable chair. I guess that is a good initiation, right?

I would like to welcome you to the joint hearing of the Subcommittee on Postal Personnel and Modernization and the Subcommittee on Postal Operations and Services. We are here today to examine the status of the U.S. Postal Service. Without a doubt, this is an important period for the Postal Service. Currently, the Postal Service is undergoing many critical changes which will have significant impact on its future operations.

I would like to welcome here today our Postmaster General, which may mark, I believe, his final appearance before this committee in that capacity. So with no further ado, let me introduce for testimony our Postmaster General, William Bolger.



Mr. BOLGER. Thank you, Mr. Chairman.

Mr. Chairman, this is the sixth year this committee has given me the opportunity to come talk to you about my favorite subject: the Nation's Postal Service. Today may be my last opportunity, so I intend to make the most of it by speaking frankly about what I think works well and what needs attention.

You should not be surprised to observe that much of what I have to say is not so far different from what you have heard me say before.


A telling point about our postal system, I think, is that no matter the circumstances of the particular day or the issues of the hour when I have been up here to see you, I have been able to bring pretty much the same basic message: That the Postal Service is now strong-but cannot afford to feel secure.

This same theme summarizes my remarks to you again this year. For this is as it must be in the Postal Service. To provide our service, we have to stay strong as an institution, fully able to perform well the vital public job we have been assigned.

And to keep fit for that job, we must never be complacent. Weall of us who have a stake in the postal system-must keep applying the tools available, with foresight, to stay sharp in the face of growing competition and to keep giving our customers services they seek at prices that are reasonable.

Experience has now proved that the job can indeed be done if all concerned pitch in and do what is needed. There were times in the past when doubts about even the viability of the postal system might have been understandable. No more.

Nothing makes the point better than the booming response we have received from the mailing public this year. Mail volume is headed toward an unprecedented leap of some 12 billion pieces more than last year-better than a 10-percent jump.

I have been around long enough to remember when the postal system simply could not have accommodated a surge of this magnitude without significantly affecting service.

But now we can, and have. Postal managers across the country have now adjusted to this unanticipated growth in workload in fine shape and are moving the mail on time. We are meeting the nextday delivery goal for stamped, First-Class Mail 96 percent of the time.

These record mail volumes tell us that our customers find a lot to like in what the Postal Service has been doing. Probably most of all, they like the way that postage rates have been kept in line for long periods of time.

As you know, our eight Governors have before them a recommended decision from the Postal Rate Commission on new rates. I have recused myself from this case and will not be participating in their deliberations.

We have made excellent progress in extending the period of stability between necessary rate adjustments. For the future, I believe the Postal Service needs to continue to work on bettering its record of rate stability.

We are in a tough, competitive marketplace, with alternates or substitutes available for most of our services. The future of this institution depends on keeping our service up and our rates down.

In providing service, I believe the Postal Service should stick to what it knows best, which is the hard copy delivery business. Just as important is to keep that business as up-to-date and productive as possible to take advantage of new private communications technologies just as we use the latest in transportation services to do the best job we can for the mailing public.

Right now we are working on adjustments in the E-COM Program so that this service can be provided to the public in a different and, we believe, better form. Even with these changes in the

works, E-COM volumes have been holding up roughly at about 450,000 pieces per week on a seasonably adjusted basis.

During my tenure as Postmaster General, we have, I hope succeeded in putting to rest fears about wholesale closings of post offices or reductions in 6-day delivery. They are not in the works because these services are needed to do our job.

Under current law, the Postal Service pays its own way now. This is an historic and, I believe, irreversible break from a past filled with deficits that were permitted to burden the taxpayers.

While achieving this turnaround and keeping postage rates increasingly stable, we have also avoided mortgaging the future. The Postal Service has not borrowed during my tenure as Postmaster General.

During the past 61⁄2 years, we have both covered our expenses and made up a portion of the losses suffered in the initial transition after postal reorganization.

Like any progress, better financial performance and rate stability are not achieved automatically, and they carry no future guarantees. These results have had to be earned, and will have to be earned anew every single year.

Many efforts at all levels of the Postal Service are responsible for the continuing progress being made. Greater cooperation between the Postal Service and its customers through presorting and increased modernization of mail-sorting equipment are two critical elements. I did not originate these ideas but have accelerated emphasis on both of them.

Over the last 6 years, mailing at presort rates has soared from about 3 billion pieces to nearly 50 billion pieces annually. By participating in this type of good business practice to mutual advantage, mailers and the Postal Service have succeeded in shaving postage charges amounting in the aggregate to billions of dollars. The Postal Service is now well into a critical chapter in the modernization of its operations with an intensive investment in automation. We are committing more than $700 million for automated equipment to increase the efficency and productivity of mail sorting while improving accuracy and consistency of service.

Entering the second phase of the automation program, we recently ordered 406 additional optical character readers for delivery beginning in the fall of next year. We were pleased with the bid accepted, which came in substantially below estimate.

With the ZIP+4 Code, the benefits of automation and the benefits of cooperative mail preparation incentives for mailers will combine to maximize the efficiencies and savings from the new equipment.

Mailer use of the ZIP+4 Code has accelerated to a present annualized rate of more than 3 billion pieces per year. Existing commitments from hundreds of other business mailers will continue to build the momentum of this program.

The Postal Service is committed to ZIP+4 and automation has a bright promise for increasing productivity and continuing rate stability in the postal system of the 1990's. Maximum effort will continue to be devoted to spreading the word of the savings and other significant benefits from the Code and providing business mailers the help they need to take full advantage of it.

Through our All Services effort, the Postal Service has begun the work of improving service at the single most important level-the point of contact with each individual customer. It is critical to the long-term vitality of the postal system that we make sure that the public knows what services we have and how to use them, and that we provide those services courteously.

We must show our respect for the public day after day, again and again, through the service which all of the people in our organization render to our customers.

We view All Services as a continuing commitment to quality service and to public satisfaction and respect.

It isn't so much what we accomplished yesterday or last year that counts. It is what we are doing now, for today and in preparation for tomorrow.

So I believe that the Postal Service is strong today, and is concentrating on the hard work required to preserve and renew that strength.

It is still not an easy task. Success is never guaranteed. In most of the areas I have mentioned, we have had problems and adjustments, controversy and compromise, gains and setbacks.

I promised to be frank and I must tell you that I am disappointed with the results of collective bargaining efforts this year. I still hope that a settlement can be worked out by the participantspostal management and our major unions.

My disappointment does not reflect any lack of confidence in the process of impartial arbitration. An arbitrator, I am sure, would do the best he or she can to resolve the matter properly.

But an arbitrator does not have to live with the result. The postal system-the people who work in it, and the people who use it-do.

Wages and benefits still account for some 85 percent of postal costs. They are key to our revenue needs and therefore to postage rates.

I don't believe that Congress intended for any one individual to be saddled with the burden of such a fateful choice for the future of this vital institution and the people who depend on it.

What must have been intended was for the people within the system to tackle the hard job of shaping their own destiny, with proper regard for the economic realities of the marketplace in which the Postal Service labors for its support.

Ultimately, the Postal Service and its employees cannot count on an outsider to look out for their interests. They must address these issues themselves.

It may be that over the long haul, one saving grace will come from the commitment to building a more direct employee involvement process into the fabric of the postal system. This joint effort with three of the national postal unions, and with nonbargaining employees, now has more than 150 functioning groups in facilities around the country. But the process of achieving fundamental change will be tedious and the pace gradual.

I am pleased that one of the achievements of the Postal Service during my tenure as Postmaster General has been an improvement in safety consciousness and commitment at all levels of the organi

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