Postal Service to Pay Less, Pick Air Carriers Based on Performance

Starting next year, the Postal Service will pick airlines to carry the mail based on performance, and they will be paid slightly less than they are now.

Commercial airlines carry large volumes of mail, with each airline awarded a share of the work. The contracts that govern this arrangement expire in March.

Postal officials said this week that they are instituting a system to rate the on-time performance of airlines carrying mail and will steer their business to the best performers.

In addition, the average rate offered for shipping the mail will be 28.5 cents a pound starting with the new contract. That is a drop from the current 31.4 cents a pound, a change that is expected to save the post office $80 million a year.

Chris Chiames, a spokesman for the Air Transport Assn., said the airlines are “disappointed with the proposal put forth by the Postal Service and hope to be able to work something out so that carriers can continue to carry the mail and not do so at a loss.”

The Postal Service said that since 1985, rates for air transport of general cargo have been declining, while the rate charged for mail has risen. The new rates will restore the balance between the two, postal officials said.

Airlines receive about $700 million a year for carrying mail, about 1.5% of their gross revenues. Mail represents 35% of the cargo carried by airlines but 42% of the revenue from cargo, according to Postal Service figures.