Last Thursday, the USPS announced the location of hundreds of post offices it will study for possible closing. It also proposed cutting Saturday mail delivery and raising the price of mailing a first-class letter from its current 44 cents. But in a last ditch effort to cut billions from its payroll, USPS has proposed shutting down more than half its mail processing centers. Although the proposal could end up saving USPS the money it needs for its very survival, the closure of processing centers would effectively add a day or more to the time it takes to deliver many first-class letters.
The agency, which is self-supporting from mailing revenues, and lost $8.5 billion last year due to the emergence of email and online bill paying, has informed Congress it can not make a $5.5 billion payment due September 30th to a federal retiree health care trust fund. Lawmakers have been looking at ways to provide assistance to the USPS, including giving the agency an extension on the outstanding payment.
Postmaster General Patrick Donahoe said last week that the closing of mail processing centers could save $3 billion a year, primarily in labor costs. But postal consumers will now have to add a day or 2 whenever mailing or expecting a first class letter. Also, any labor cuts within the postal service could mean an increase in U.S. unemployment numbers, since those postal workers would be forced to find work elsewhere.
