U.S. Postal Service, letter carriers reach tentative contract

WASHINGTON -- The Postal Service has reached a tentative five-year contract agreement with one of its largest unions, the National Association of Letter Carriers.

The last few contracts between the post office and letter carriers were settled by arbitration when the two sides could not reach agreement.

The new contract will be retroactive to last November, when the previous contract expired. The contract, which calls for raises totaling 7.1 percent over the term of the deal, plus cost-of-living increases, now goes to the 238,000 city letter carriers for ratification.

Currently letter carriers earn between $32,156 and $43,660 annually depending on grade and length of service.

"I am pleased that the U.S. Postal Service and the NALC have been able to reach a fair settlement -- one that meets the interests of the employees, the Postal Service as an institution, the general public and the mailing community," union president Vincent R. Sombrotto said.

Postal Vice President for Labor Relations Anthony J. Vegliante said, "This is the first negotiated agreement with the NALC since 1987 and should assist us in our continuing efforts to improve the labor-management relationship. The economic provisions of the five-year tentative agreement should help provide long-term financial stability to the Postal Service."

Agreement with unions

The settlement is the last to be completed with the post office's four major unions.

The agency reached an agreement with the Mail Handlers in November. Contracts with the American Postal Workers Union and the Rural Letter Carriers were settled by arbitration.

Labor is by far the post office's largest expense. Having these contracts settled will make it easier for managers to plan for the future of the financially strapped agency.

The post office lost $1.6 billion last year -- before the added costs of the terrorism and anthrax attacks -- and has halted construction and cut staff by 12,000 in an effort to reduce costs. A postal rate increase, boosting the price of a first class stamp 3 cents to 37 cents, takes effect June 30.

The new letter carriers contract also calls for streamlining of grievance and arbitration procedures to limit the number of unresolved issues at the local level and reduce the time in handling such disputes. The deal sets up an alternate dispute resolution process jointly administered by the union and management.

The agreement provides a 1.8 percent wage increase retroactive to Nov. 17; a 1.5 percent increase in November 2002; 1.2 percent in November 2003; 1.3 percent in November 2004; and 1.3 percent in November 2005.

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On the Net:

U.S. Postal Service: http://www.usps.com

National Association of Letter Carriers: http://www.nalc.org