The U.S. Postal Service said Wednesday it is abandoning plans to close thousands of post offices and instead will drastically reduce hours at most of its rural outposts, a change that will affect about a third of the country’s retail mail network.
Postal officials, bowing to community and congressional pressure to keep rural service afloat as the debt-ridden agency cuts costs, said they will offer early retirement incentives to tens of thousands of postmasters. The result will be a dramatic change for customers: Window hours will drop from the current eight to as few as two a day.
Postmaster General Patrick R. Donahoe said the latest plan will save $500 million a year in labor costs, up from an estimated $200 million he said almost a year ago would be saved by closing 3,700 post offices in rural, suburban and urban areas.
“When we announced those closures, what people said to us was, ‘Keep our post office open,’” Donahoe said at a briefing on the plan. “As we sat and talked to people, we learned a lot. We have to have shorter hours. But if we can shrink the labor cost, we can keep the buildings open.”
The post offices will be staffed by part-time workers, either career employees or hourly contract staff who will take the place of postmasters. Most would receive reduced benefits or none at all.
In the last year, officials studied roughly 17,000 rural post offices in the network, a majority of which lose money. They concluded that 13,000 of them — scattered across the country —should operate on a reduced schedule, staying open anywhere from two to six hours a day.
Customers still will have all-day access to their mailboxes in post office lobbies.
The latest cost-cutting strategy does not come close to filling the Postal Service’s multi-billion dollar shortfall. Financial results for the first quarter of 2012 are due Thursday, and the financial hemorrhaging is expected to continue.
In addition to closing post offices, officials have proposed consolidating about 250 mail processing centers; eliminating Saturday delivery; slowing delivery; exploring new lines of business that are now prohibited and reducing workers’ benefits. Donahoe said Wednesday the agency plans to move forward with plans to close the mail-processing facilities.
Others plans are in limbo while Congress debates how to step in.
The Senate passed legislation that would give the agency $11 billion it overpaid into one of its pension funds, among other changes. Senators restricted the closure of post offices, bowing to concerns of rural lawmakers who vigorously fought plans to close offices in their districts.
The House has not acted on its version of the bill, which demands more cost savings.
In a statement, Rep. Darrell Issa (R-Calif.) the House bill’s sponsor, said postal officials need to make deeper cuts to the post office network and look beyond rural post offices to suburban and urban ones.
“The smallest 10,000 post offices collectively cost USPS less than $600 million dollars to operate each year,” Issa, chairman of the House Oversight and Government Reform Committee, said in a statement.
“That is less than one-eighth of the $5 billion USPS spends each year to operate its network of 32,000 post offices. To achieve real savings creating long-term solvency, the Postal Service needs to focus on consolidation in more populated areas where the greatest opportunities for cost reduction exist.”
Here’s a list of post offices whose hours would be affected.