VOL. 126 | NO. 237 | Tuesday, December 6, 2011
USPS Cuts to Slow First-Class Postal Delivery
HOPE YEN | Associated Press
WASHINGTON (AP) – The cash-strapped U.S. Postal Service said Monday, Dec. 5, it is seeking to move quickly to close 252 mail processing centers and slow first-class delivery next spring, citing steadily declining mail volume.
One Memphis processing center, Jet Cove TN Annex, is on the list of locations being studied for possible closure, according to USPS.
The cuts are part of $3 billion in reductions aimed at helping the agency avert bankruptcy next year. It would virtually eliminate the chance for stamped letters to arrive the next day, a change in first-class delivery standards that have been in place since 1971.
The plant closures are expected to result in the elimination of roughly 28,000 jobs nationwide.
At a news briefing, postal vice president David Williams stressed the move was necessary to cut costs as more people turn to the Internet for email communications and bill payment. After reaching a peak of 98 million in 2006, first-class mail volume is now at 78 million. It is projected to drop by roughly half by 2020.
“Are we writing off first class mail? No,” Williams said. “Customers are making their choices, and what we are doing is responding to the current market conditions and placing the postal service on a path to allow us to respond to future changes.”
The cuts, now being finalized, would close 252 out of 461 mail processing centers across the country starting next April. Because the consolidations typically would lengthen the distance mail travels from post office to processing center, the agency also would lower delivery standards.
The Memphis site, Jet Cove TN Annex, is at 3300 Jet Cove southeast of the intersection of Knight Arnold and Tchulahoma roads and north of Winchester Road in the 38118 ZIP code.
The Postal Service initially announced in September it was studying the possibility of closing the processing centers and published a notice in the Federal Register seeking comments. Within 30 days, the plan elicited nearly 4,400 public comments, mostly in opposition.
Among those opposed were ESPN The Magazine and Crain Communications, which prints some 27 trade and consumer publications. Both said delays to first-class delivery could ruin the value of their news, timed for weekend sports events or the Monday start of the work week.
Currently, first-class mail is supposed to be delivered to homes and businesses within the continental U.S. in one day to three days. That will lengthen to two days to three days, meaning mailers no longer could expect next-day delivery in surrounding communities. Periodicals could take between two days and nine days.
Williams said in certain narrow situations first-class mail might be delivered the next day – if, for example, newspapers, magazines or other bulk mailers are able to meet new tighter deadlines and drop off shipments directly at the processing centers that remain open.
But in the vast majority of cases, everyday users of first-class mail will see delays of one or two days, including those who pay bills by check, send birthday cards, write letters or receive prescription drugs or Netflix DVDs by mail.
After five years in the red, the post office faces imminent default this month on a $5.5 billion annual payment to the Treasury for retiree health benefits. It is projected to have a record loss of $14.1 billion next year. The Postal Service has said the agency must make cuts of $20 billion by 2015 to be profitable.
It already has announced a 1-cent increase in first-class mail to 45 cents beginning Jan. 22.
Separate bills that have passed U.S. House and Senate committees would give the Postal Service more authority and liquidity to stave off immediate bankruptcy. But prospects are somewhat dim for final congressional action on those bills anytime soon, especially if the measures are seen in an election year as promoting layoffs and cuts to neighborhood post offices.
On Monday, the Postal Service said it welcomed congressional changes that would give it more authority to reduce delivery to five days a week, raise stamp prices and reduce health care and other labor costs. But the Postal Service said it was opposed to provisions in both the House and Senate measures that would require additional layers of review before it could close post offices and processing centers.
“Speed is very important to the Postal Service in our ability to capture savings,” Williams said.
Maine Sen. Susan Collins, the top Republican on the Senate committee that oversees the post office, believes the agency is taking the wrong approach. She says service cuts will only push more consumers to online bill payment or private carriers such as UPS or FedEx.
Collins urged passage of a bill that would refund nearly $7 billion the Postal Service overpaid into a federal retirement fund, encourage a restructuring of health benefits and reduce the agency’s annual payments into a retiree health account.
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