The U.S. Postal Service is nearing planned cuts to shut more than 260 mail processing centers nationwide as part of a billion-dollar cost-cutting effort that will slow delivery of first-class mail. The move comes as the U.S. Postal Service lacks financial relief in sight.
U.S. Postal Service now a cash-strapped agency
In a statement given to a business magazine Thursday, U.S. Postal Service, the cash-strapped agency said that it had completed an assessment of closings to mail processing centers it had proposed last fall. Derived from community input and other factors, the post office said, it will move forward with consolidations involving virtually all of the 252 facilities on the list, and up to 12 new locations, beginning in mid-May.
Among the 264 facilities on the list, approximately 41 won't be closed or consolidated right away as the post office conducts additional reviews. The consolidations are expected to result in nearly 35,000 jobs being lost, which the U.S. Postal Service hopes to achieve mainly through slow destruction. The cash-strapped agency described the move as a necessary cost-saving measure because of declining mail volume as people and businesses continue switching to the Internet in place of letters and paper bills.
The U.S. Postal Service told an supply chain magazine that the steps that were taken by the agency would put the Postal Service on a strong financial footing for decades to come.
U.S. Postal Service’s cost-reduction techniques
U.S. Postal Service is seeking to close or consolidate more than half of its nearly 500 mail processing centers. The expected $3 billion reductions are part of a wide-ranging effort by the Postal Service to quickly trim costs.
The mail processing centers fusions would save $2.1 billion and are a part of the agency's broader effort to save $20 billion in the next three years. The U.S. Postal Service is in debt due to declining supreme mail volumes and apparently a congressional rule to prefund retirement health care benefits.
The cash-strapped agency claims closing the Pasco Processing & Distribution Center on Court Street will save the cash-strapped agency $800,000 a year, reports a news agency.
Because the combination of several mail processing centers typically would lengthen the distance mail travels from post office to processing center, for the first time in 40 years, the U.S. Postal Service also would lower delivery standards for first-class mail that will eliminate the chance for stamped letters to arrive the next day.
The U.S. Postal Service’s mail processing centers consolidations are the latest in an array of controversial cost-cutting measures under consideration. These include slashing Saturday service, delaying delivery of some first-class mail, closing post offices and hiking the price of a first-class stamp by a nickel to 50 cents.
It was only last week that the U.S. Postal Service warned it might lose as much as $18.2 billion a year by 2015 if Congress didn’t grant it new flexibility to eliminate Saturday delivery and raise the price of a postage stamp by as much as 5 cents. At the request of Congress, the cash-strapped agency agreed to wait until mid-May to begin closures so lawmakers would have time to stabilize its finances first.