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USPS To Announce Service Cuts

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Getty/Alex Wong

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WASHINGTON (AP) — The Postal Service is considering closing more than 1 in 10 of its retail outlets.

The financially-troubled agency announced Tuesday that it will study 3,653 local offices, branches and stations for possible closing. But many of those may be replaced by Village Post Offices in which postal services are offered in local stores, libraries or government offices.

“It’s no secret that the Postal Service is looking to change the way we do a lot of things,” Postmaster General Patrick Donahoe said at a briefing. “We do feel that we are still relevant to the American public and the economy, but we have to make some tough choices.”

Currently the post office operates 31,871 retail outlets across the country, down from 38,000 a decade ago, but in recent years business has declined sharply as first-class mail moved to the Internet. In addition, the recession resulted in a decline in advertising mail, and the agency lost $8 billion last year.

Most of the offices that face review are in rural areas and have low volumes of business. As many as 3,000 post offices have only two hours of business a day even though they are open longer, said postal vice president Dean Granholm.

Coming under review doesn’t necessarily mean an office will close. The post office announced in January it was reviewing 1,400 offices for closing. So far 280 have been closed and 200 have finished the review process and will remain open.

Once an office is selected for a review, people served by that office will have 60 days to file their comments. If an office is to be closed, they will be able to appeal to the independent Postal Regulatory Commission.

“Today’s announcement is a step in the right direction. There are, however, many difficult decisions ahead that must be made to improve operations, reduce costs, and return the Postal Service to financial solvency,” commented Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, which has jurisdiction over the Postal Service.

The post office “must consolidate facilities and streamline operations in the way that countless private sector companies have done to remain viable in the face of new markets, new technology and changing customer needs,” said Issa.

Sen. Tom Carper, D-Del., who heads the Senate subcommittee that oversees the post office, added that the “announcement underscores the serious nature of the Postal Service’s financial situation … Closing a significant number of post offices that are losing money or are no longer necessary to meet the current demand for Postal Service products and services is a difficult but necessary step in the broader effort to save the Postal Service from total collapse.”

Others agreed change is needed.

“This is bitter medicine, but changed times call for a changed Postal Service. With mail volumes declining at a dizzying rate, we need a Postal Service that is leaner, more efficient and less expensive,” said Art Sackler, chairman of the Coalition for a 21st Century Postal Service, a mailing industry group. “The closure of a post office can be difficult, but these avenues must be explored to ensure that the Postal Service and the 8 million private sector jobs that rely on it are able to survive, and that the economy as a whole doesn’t take yet another disruptive blow.”

The vast majority of sales in post offices are stamp purchases, officials said, and that can easily be handled at the new Village Post Offices. In addition, those offices would accept flat-rate packages and some could provide post office box service. For passports or other more complex services customers would have to go to a remaining regular post office.

Already some 70,000 locations such as supermarkets and department stores sell stamps.

Over the last four years the Postal Service, which does not receive tax funds for its operations, has cut its staff by about 130,000 and reduced costs by $12 billion in an effort to cope with the loss of first class mail to the Internet and the decline in advertising mail caused by the recession. For example, about half of all bill payments are made by Internet now, up from 5 percent a decade ago.

Postal officials have also sought permission from Congress to reduce mail delivery to five-days-a-week and to ease the requirement that they pay $5.5 billion annually into a fund to pre-pay future retiree medical benefits.

Without the $5.5 billion annual pre-payment — which is not required of any other government agency — the post office would have made a profit over the past four years. However, because of the complex way federal finances are structured, the payment is counted as income to the government and eliminating it would make the federal deficit appear to be $5.5 billion larger.

The agency has also suspended payments into its pension fund and eliminated bonuses and performance awards for managers and executives.

Of the 1,400 offices announced for review in January, 620 are still in the review process and 300 will move to the new review list.

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The list of offices being studied can be found at http://about.usps.com/news/electronic-press-kits/expandedaccess/statelist.htm

Copyright 2011 The Associated Press

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