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Federal Eye
Posted at 01:36 PM ET, 09/15/2011

Postal Service proposal might slow deliveries


The United States Post Office in Philadelphia’s Old City neighborhood. (Alex Brandon/ASSOCIATED PRESS)

Updated 1:20 p.m. ET

The U.S. Postal Service has yet another plan to save money — but it might make snail mail slower.

Eye Opener

The nation’s mail delivery service — facing mounting financial losses that may top $10 billion by month’s end — announced plans Thursday to close hundreds of facilities that sort the mail as part of a long-term plan to cut $20 billion, slash hundreds of thousands of jobs and permanently reshape itself as a leaner organization.

“The sobering reality is that first-class mail volume lost will not return,” said USPS Chief Operating Officer Megan J. Brennan. “People are communicating and paying bills electronically, and we project a continued decline.”

In the past decade, deliveries of first-class mail — its most popular and profitable mode of delivery — have plummeted nearly 50 percent.

Postal officials said Thursday they no longer need a coast-to-coast delivery network originally established to process first-class mail overnight, preparing envelopes, catalogs and packages that only travel a few ZIP codes away for delivery the next morning.

USPS plans to review the fate of 252 of its 487 mail-processing facilities in the next three months in hopes of shrinking the number of plants to fewer than 200 by 2013.

The changes would result in the elimination of 35,000 mail-processing jobs, part of a broader plan to cut 150,000 positions by 2015.

Locally, the Postal Service said it will study the fates of four facilities in Maryland — including one in Gaithersburg — and four in Virginia. Customers will have an opportunity to meet with postal officials in a public setting before final decisions are made, Brennan said.

Feasibility studies of the processing plants are in addition to an ongoing review of 3,700 post offices across the country that also could be closed, and part of the push to eliminate $20 billion in the next four years with the help of Congress.

Lawmakers are considering four competing legislative proposals that would generally grant USPS the flexibility to end Saturday mail deliveries, close post offices based on market conditions and recalculate how much it pays annually into federal retirement, health-care and workers compensation accounts. Though USPS is a self-funding entity that doesn’t collect taxpayer dollars, it is the largest contributor to those accounts.

On Thursday, Rep. Darrell Issa (R-Calif.), co-author of one proposal, said closing processing plants “cannot forestall the Postal Service’s financial collapse by itself.” His bill would establish a financial control board to help overhaul postal finances.

Representatives of postal workers expressed more skepticism Thursday.

Despite Brennan’s assurances that closing processing plants should be seamless, “I can’t imagine that the change will go unnoticed,” said James F. Killackey III, executive vice president of the National Association of Postal Supervisors.

Killackey, a former USPS official, suggested that business that rely on overnight first-class mail deliveries to nearby customers might instead have to expect at least two days for that envelope to arrive. Or turn instead to UPS or FedEx.

Cliff Guffey, president of the American Postal Workers Union, said the new plans would jeopardize the Postal Service’s unrivaled delivery network, arguably its greatest asset.

“Degrading service is not the answer,” Guffey said. “The Postal Service should be looking for ways to strengthen service and increase its relevance in the age of digital communication.”

Postmaster General Patrick R. Donahoe said he is exploring ways to enter the digital delivery realm — but also warned that first-class postage prices may rise again next year.

Despite the difficulties, “We are not going out of business,” Donahoe said. “What we’re trying to do is get our finances in order so we can stay in business and be around for a long, long time.”

Follow Ed O’Keefe on Twitter: @edatpost

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This post has b een updated since it was first published.

By  |  01:36 PM ET, 09/15/2011

Categories:  Eye Opener, Postal Service

 
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