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Postal Service poised to begin controversial plant closures next week

The U.S. Postal Service next week plans to begin a new round of plant closings and consolidations that will affect dozens of mail-processing centers, despite calls from more than half the members of the outgoing Senate to postpone the changes.

Earlier this month, 30 senators, all but one of them Democrats, issued a letter to Postmaster General Patrick Donahoe urging USPS not to move forward with its “network rationalization” program until the agency has completed its analyses of potential impacts.

USPS spokeswoman Sarah Ninivaggi said the agency plans to respond to the senators’ letter, but she did not provide a timeline.

All told, the Postal Service plans to close 82 mail processing centers nationwide next year, starting on Jan. 10.

USPS officials have said the consolidation plan will help the financially struggling agency save money and adjust to dwindling demand for first-class mail, one of its core services. But critics say the program will slow down delivery times and harm the agency’s brand.

In October, the USPS inspector general released a report saying the Postal Service was leaving communities in the dark about the impacts of the changes. Auditors found incomplete impact studies for all of the 95 mail-processing facilities that are due to absorb operations from other centers.

The Postal Service said it could not complete the statutorily required analyses because it had not yet finalized its new processing guidelines, which will scale back delivery standards starting on Monday. The agency does not plan to update its impact studies before the consolidation plan begins, Ninivaggi said.

Despite the inspector general’s findings, the Postal Service insisted this week that it had fulfilled its obligations with the impact reports.

Ninivaggi said the agency has been transparent and that it began notifying customers of the consolidation plans in 2011. “The Postal Service is committed to providing the level of customer service that our customers expect and deserve, and we have met the requirements to notify and inform customers in advance of the transitions,” she said.

In their letter, the senators criticized USPS’s initial studies, saying the language in the reports was “so vague and uninformative as to be meaningless to the public.” They asked the agency to postpone its plans to accommodate further analyses.

“USPS gains little by deciding to continue the consolidation process on its current, arbitrary timeline,” the letter said.

But the Postal Service, which has lost billions of dollars each year since 2006, has shown no appetite for delays. Ninivaggi said the agency will begin its network rationalization program, estimated to save $750 million annually, on Jan. 10, as originally scheduled.

Already, the Postal Service has consolidated 350 mail-processing facilities and taken other steps to reduce costs since 2006. In the past three years alone, the agency closed 143 plants and eliminated about 3,800 routes, in addition to reducing hours at more than 9,700 offices and trimming its workforce by 3,000 employees.

USPS said in its annual report to Congress this month that the past three years of changes “resulted in negligible service impact, required no employee layoffs and generated annual cost savings of approximately $865 million.”

The next phase of consolidation will increase delivery times and eliminate overnight delivery for “a large portion of First-Class Mail and periodicals,” according to the inspector general’s report.

A Postal Service fact sheet says the changes will only nominally increase the average delivery time for first-class mail, from 2.14 days to 2.25 days. Ninivaggi said the agency based its estimate on “extensive modeling and real-time info from last year’s consolidations.”

Sen. Claire McCaskill (D-Mo.), who helped draft the letter to Donahoe, said there is more at stake than just delivery times. She said in a statement on Tuesday that the Postal Service could lose one of its biggest advantages: Its reach into virtually every American community.

“I grew up in small-town Missouri, and I know personally that our postal facilities are more than brick and mortar — they’re the lifeblood of communities across the country,” McCaskill said. “Any CEO will tell you that voluntarily giving up your competitive advantage and lowering standards isn’t a recipe for success.”

Much of the Postal Service’s financial troubles in recent years stem from declines in mail volume, which have decreased by more than 27 percent since 2006. Nonetheless, some of the agency’s largest expenditures are beyond its control, including a congressional mandate to prefund retiree health benefits to the tune of about $5 billion a year.

In a sign of hope for the postal network, USPS has seen rapid growth in its package business, increasing revenues in that area by 18 percent since 2012. Still, the agency has been unable to make a profit for several years.

Donahoe has asked Congress to remove or restructure the eight-year-old prefunding requirement, something that postal unions have pushed for as well. But an agreement on comprehensive postal legislation has proven elusive for several years, with lawmakers from both parties opposing bipartisan plans that would involve service cuts such as an end to Saturday mail delivery.