USPS: Postal Service Proposes End To Overnight Mail Delivery, Cuts To Processing Centers

WASHINGTON -- The financially troubled Postal Service said Thursday it may close more than 250 mail processing facilities across the country and plans to reduce service standards for first-class mail in an effort to cut costs.

The steps are part of a broad effort to cut costs for the agency that lost $8.5 billion last year and is facing ever more red ink this year as the Internet siphons off the lucrative first-class mail and the stagnant economy holds down the growth of advertising mail. Over the last five years mail volume has declined by more than 43 billion items..

"We are radically realigning the way we process and deliver the mail," said Postmaster General Patrick Donahoe. "With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic."

Postal officials said 252 mail processing facilities across the country will be reviewed over the next three months for possible closing. Currently there are 487 such offices. That's in addition to about 3,700 local post offices also being reviewed for closure. Closing the mail-processing facilities could affect 35,000 workers.

In addition, the agency said it plans to reduce current delivery standards for first-class mail. Such mail is now supposed to be delivered in one-to-three days depending on how far it has to go. That will be changed to two-to-three days, meaning mailers could no longer expect next-day delivery in their local community.

Officials said that could have some impact on commercial mailers but individual customers are not likely to notice the change. They promised to work with businesses to help solve any problems the change might cause.

The closings and service changes could save the post office as much as $3 billion annually and are part of an effort to reduce annual costs by $6.5 billion. Other savings are being sought through requests that Congress allow the post office to eliminate mail delivery on Saturdays and change or eliminate an annual $5.5 billion payment the post office is required to make into a fund to cover future retiree medical benefits.

Last year the Postal Service had revenue of $67 billion and expenses of $75 billion.

"Cutting costs is essential to saving the Postal Service and the 8 million private sector workers whose jobs rely on it," said Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, an industry trade group. "The Coalition welcomes this important step and looks forward to the details. But what's needed even more are fundamental reforms only Congress can make."

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Comments

[D Johnson]

08:43 AM on 09/21/2011

I think this is a back door union busting measure. When they decided to make the post office pre-fund their FUTURE retiree pension and health benefits, they began orchestrating the demise of the institution. There is stong accounting evidence that it has been over paid anyway! Make no mistake FedEx and UPS are salivating at getting all this business should the post office be allowed to go under- and they definately won't do it for the current cost of a stamp!! Postal workers are a part of the middle class that does things like send their kids to college.

[had410]

10:00 AM on 09/22/2011

This commercial explains what has happened to the postal service.
http://www.youtube.com/watch?v=Wgf2HoHbQbk

[rndfetz]

09:19 AM on 09/18/2011

Just got my husbands Postal Record magazine yesterday. What was not said in the press conference was that the 35,000 jobs was just the first step. There will at least 120,000 job cuts, reduced benefits and cut barganing rights before this is over with.

[PZarin]

08:48 PM on 09/17/2011

Allow me to give you one more little known fact concerning USPS...The United States Postal Service DOES NOT have its own planes like FED-EX and UPS! We have to rely on airlines and carriers to take our over night!!! Congress won't allow us to have them!!! Voted against them in the early 70's! I am sure if you have been to an airport..you have seen a FED-EX plane...a UPS plane but NEVER...NEVER a United States Postal Service plane!!! They don't exist. :(

[SharaLynn84]

08:24 PM on 09/18/2011

Correct. I think moving fast to get planes could have saved them. As paper mail is decreasing, boxed mail is increasing as people increasingly find ways to save money off of sites like Ebay and Amazon. FEDEX and UPS have a corner on the market when it comes to boxed mail.
The only paper mail that I get is generally adds and credit card offers (at least 3 per day) . Bills are all paperless. I feel sorry for those whose jobs will be affected by this... both my grandmother and aunt are amongst their ranks... but the post office cannot support such a large staff when there service just clearly isn't as useful as it was in the past.

[StJames]

10:59 AM on 09/17/2011

All of us who support the Postal Service because we have found the service superior to that offered by UPS or FedEx should bury our congress critters under snail mail.... Chris Matthews has often said that congress finds it easier to ignore emails than canvas bags full of letters stacked in the hallways of their office buildings. I will be writing today...just bought a book of stamps yesterday for that purpose. ;-)

[La Elle]

10:41 AM on 09/17/2011

USPS would have been dead 10 years ago if it hadn't been for Ebay and internet commerce. Just like any other business, the USPS needs to update it's business model and get with the times if they want to survive.

[Sisa]

11:00 PM on 09/16/2011

 Allow me to enlighten you. The postal service has been off the tax base since 1972, furthermore the federal government has shorted them THIER share of tax based retiree benefits to the tune of $75 billion dollars. In addition congress has forced the pre pay on them to cover the next 75 yrs in advance. That account is currently at $44 billion dollars and can now cover all USPs employee benifits for the next 20 yrs. Also the USPS has over paid their CSRS and FERS pension plans by $7 billion dollars.  That is roughly $125 BILLION dollars of postal revenue.  The fact is this money is in a joint account which covers all federal workers. The other agencies have not contributed their fair share to maintain this account at the required legal level and have been riding on the coat tails of the USPS.  Congress does not want this fact known or the fact that they have issued the USPS T- bills or IOU's for these accounts. They will not let the USPS touch the money because it is part of the federal budget... This is how they staved off default during the debt ceiling debacle bybissue these T-bill IOU's.  

[Sisa]

11:09 PM on 09/16/2011

Heres an analogy. Every payday you set aside some money and put it into your savings account... You are laid up sick for a while and run low on cash... You go to the bank and tell the teller you would like to transfer some money from your savings to your checking account.. The teller hands you back your slip and tells you this is no charity we spent your money... But here's an IOU... come back next year... And oh by the way your deposit into savings is due tomorrow.

[caborose]

08:41 PM on 09/16/2011

The following is a great article about why "they" are trying to do in the USPS....it is about UNIONS!

http://wallstreetpit.com/83868-latest-in-deficit-terrorism-postal-service-default

[localwonk]

06:56 PM on 09/16/2011

I'll tell you what the USPS is posturing for and it's to have Congress bailout their pension liabilities. Right now the Postal Service has nearly reached it's $15B borrowing limit and needs to make a payment of $5.5B into their defined benefit pension. This is a classic object lesson on what unions and their benefits do to a business. The purpose of the Postal Service is no longer to service the nation's postal needs and to do so in a creative and innovative manner, but rather to pay for the lavish union liabilities they accumulated over the years. While it makes sense to many folks to get a pension that is X number of years of service equals Y percentage of final income - it unrealistic. The USPS can't earn enough money to pay salaries to the tens of thousands of retirees it has. The Postal Service knows it cannot survive with these pension liabilities and will cost cut themselves into default so that Congress bails them out. That's why GM & Chrysler went into bankruptcy (get out of pension liabilities) and many of the airlines also did that as well.

If the government does release them out of their pension liabilities they will become profitable in the first year regardless of the downturn in mail volume, e-mail, etc.

[Sisa]

10:49 PM on 09/16/2011

Wow allow me to enlighten you. The postal service has been off the tax base since 1972, furthermore the federal government has shorted them THIER share of tax bas retiree benefits to the tune of $75 billion dollars. In addition congress has forced the pre pay on them to cover the next 75 yrs in advance. That account is currently at $44 billion dollars and can now cover all USPs employee benifits for the next 20 yrs. Also the USPS has over paid their CSRS and FERS pension plans by $7 billion dollars. So that around $125 billion of non taxpayer postal revenue that the govern has pretty much taken and issued them an IOU for.

[ccalde1961]

09:12 PM on 09/17/2011

And all the employees that have paid into the pensions and have destroyed their bodies doing jobs because they were promised a pension when they retire, what are they suppose to do, just kill themselves when they are too old or disabled to work anymore? Why is it people like YOU always bring up car company loans but never mention the foreign owned banks that created the whole mess to begin with in order to get bailout money they didn't need and make massive profits on. BTW the new employees coming into the big 3 recieve 1/2 pay, get no health or pension benefits~ that should make people like you happy. Reward the college boys that mismanaged everyting and punish the guy busting his arse doing the all the real work.

[localwonk]

05:47 AM on 09/18/2011

It's cause and effect. I guarantee you that if the new workers are in fact getting no health benefits it is to subsidize the continued benefits of those who do. Besides, how can it be that new workers are getting such a raw deal? Obama's in charge of the automakers who received bailout money. Obama's in the corner for the unions, isn't he? Socialism always leads to this kind of mess because the model they create is unsustainable. Why is the UAW accepting these terms anyway? They became a major shareholder after the 2009 bailouts, remember? You're complaining and insinuating evil greedy corporate leaders but if such conditions are true none of that could come to pass without the express approval of the UAW and Obama.

[seriousstudent]

06:07 PM on 09/16/2011

I can tell you for a fact since I have two postal relatives, that they have been over funding the medical account since the 1970's. If they let them refund this amout or if they do not fund it for the next few years the PO will be fine.

they made money last year - not lost money. This was one california senator who is trying to bust up the PO stating they lost money. They did not. Check out the facts- don't belive the lies. More bushisms and cronnies making money if the PO goes private.

[FiredUpRTG]

04:41 PM on 09/16/2011

Fire some of the political appointee bosses who do nothing. Get rid of 3rd & 4th class mail — it costs more to process than the postage. Start a secure e-mail service and charge a monthly fee.

[Itsafact]

05:47 PM on 09/16/2011

You are totally out of the loop. Do you even KNOW the issues? No, I don't think so. The problem is that Congress mandates the pre-funding of a retirement (75 years' worth). That is the problem. Without this, the USPS would have plenty of money. Get informed.

[FiredUpRTG]

08:00 AM on 09/17/2011

I doubt those retirement folks are getting $1 million parachutes. The employees used to pay into a plan in lieu of paying into social security. The average worker will get no more than $30,000 a year.

How much do you think a retired person living in the US should get back on their retirement?

Of course, that plan is no longer in effect, and as the years have gone by, incoming employees have less and less comfortable benefits. People hired now are temps, working for >$12/hr until they burn out.

But the executives from years of political appointments are still there, incompetent and doing nothing for their dollar.

I stand by my solutions. The Fed should release the post office money that is being held; it was earned by and belongs to the USPS.

It's obvious the appointees ignored the signs of changing times and now the USPS is 20 years behind.

[Ronster1954]

02:02 PM on 09/16/2011

What is not disclosed is that most of the USPS deficit is actually the result of Congress imposing a ridiculous mandate.

The USPS is required to fully fund its retiree benefits for the next 75 years, and it must do so by the year 2016. This costs the agency nearly $6 billion dollars a year. In effect, this is a fiscal death spiral; they must take out a loan to pay for a future that becomes less likely to happen the more money they borrow. The argument can be made that even after removing this mandate the USPS would still run a deficit of close to $2 billion a year. While this is still an enormous cost, the burden is not placed directly on taxpayers. As an independent government agency, the USPS is expected to be fully self-financing and receives essentially no tax dollars. Recognizing the need to address their financial losses themselves, the USPS has put forth a plan that would cut nearly 120,000 employees, close 3,700 locations and end Saturday delivery. Such drastic measures demonstrate the agency’s ability for internal reform, and suggest that privatization is unnecessary to restore its financial balance.

[rndfetz]

02:08 PM on 09/16/2011

Nice to hear from someone who knows what the hell they are talking about.

[Ronster1954]

03:41 PM on 09/16/2011

Research and just retired from management in the USPS......

[Itsafact]

02:52 PM on 09/16/2011

Gee, where did YOU come from? I mean, you actually state facts and not ranting rhetoric that goes nowhere but down the drain. However, I found out last night here that most people on these boards don't want facts (or have not the ability to understand them), they just rant on ceaselessly with misinformation and other garbage. They believe what they want to believe and there is no convincing them (or confusing them) with hard facts and data.

[Louie Rey]

01:07 PM on 09/16/2011

Just another casualty of the computer age. Pretty soon the onlu businesses that will exist are the ones making computers. I think that the ideal vision of this technical society is that no one interacts on a personal level with another human being. Just sit in your home in front of your computer and live your life while never stepping outside. Progress is great up to a point then in many ways it becomes counter productive. It's kind of sad when you think about it.

[caborose]

08:43 PM on 09/16/2011

No, this is a man made casualty! Congress did it again!

[Louie Rey]

10:35 AM on 09/19/2011

Very funny. Have a nice day.

[Yorksgal]

01:04 PM on 09/16/2011

Many people believe this only affects them and their junk mail. Actually, it affects a lot of businesses that do rely on the excellent service the USPS provides.

Are you able to send a letter for 44 cents across country via UPS or Fed-Ex? What about all those cards that people love to receive in the mail. What about all those people who live in out of the way places where UPS and Fed-Ex won't deliver to?

There is no need for the USPS to be in the dire straits it finds itself - it is thanks to politicians who had no business poking their noses in the post office affairs. Those same politicians could reverse their ridiculous order about pensions and USPS would be more than fine. But those same politicians spread the lies that the post office is tax payer funded and run poorly, so one has to wonder who is paying them to spread those lies.

[Ronster1954]

02:04 PM on 09/16/2011

It can effect over 8 million that are employed in connection with entire mailing industry

[Yorksgal]

02:09 PM on 09/16/2011

Thank you Ronster - I did forget the knock on affect. This is so disgraceful - Ben Franklin must be spinning in his grave.

[rndfetz]

02:11 PM on 09/16/2011

Brava, another intellagent post. We are on a roll here! Thank you!

[Kelly Laura]

12:59 PM on 09/16/2011

all companies need to restructure only normal. But most companies have not overpaid $50-75 billion to civil service retirement system or $6.9 billion to federal employees retirement system.If I overpay I would want my money back. No companies are mandated to pay another $5.5 billion annually to a future retirees health fund. HR BILL 2309 takes even more from post office, creates a committee(yeah, grow govt. cost $20million more) to close shops, lay off workers, lower pay, benefits just to hurt the working class. Write to your reps in congress to OPPOSE HR BILL 2309. Tell them to come up with a bill to pay back overpayments on a yearly basis to cover usps debts(last year $9 billion debt, a drop in bucket compared to our overpayments) and to stop the $5.5 billion mandate. HR BILL 2309 is just a bill to hurt working class. Of course they need to restructure, but it's not the fault of the workers. From what I hear they have 1 supervisor per 9 employees....hmmmm...They could restructure without hurting the working class, but Congress has it's agenda and thats that! They are only govt entity that doesn't cost taxpayers. Stop with the overpayments and mandates,save the postal system!

[rndfetz]

12:29 PM on 09/16/2011

I think perhaps our "wonderfull" Postmaster General should consider a pay cut for himself as well as all others who do nothing but bring in the big money. The carriers sure as hell don't bring in the big bucks and if Sat delivery is done away with, my husband, who is a T6 is going to take a pay cut of $12,000. a year, min.

[Pete Wood]

12:34 PM on 09/16/2011

if he has a job at all. Yea, over $700,000 year for the PMG is rediculous. Do not forget all 28 DEPUTY whatevers at HQ that make over $180,000

[Itsafact]

02:54 PM on 09/16/2011

So is not spelling correctly when you have spell check. Try "ridiculous." The PMG is responsible for a great many things and hence, makes the salary he does. And it's Deputy Postmasters, not Deputy Whatevers.

[Itsafact]

02:47 PM on 09/16/2011

Are you kidding about carriers not bringing in big bucks? I'm being facetious, of course. Last night many posters here had them making salaries that were in the fantasy realm and stating they shouldn't make any more than $7-14/hourly. Some claimed their salaries allowed them to live in upscale houses, drive upscale cars, and live a life of luxury. I suspect those people were making paltry salaries themselves. LOL! Whenever I countered with the truth (and information about the Congressional mandate of the pre-funded retirement program and mandates on what days they HAVE to deliver) many posters formed an angry and illiterate mob. It was insane and I was rather disheartened to find so many who just sit here spewing garbage and venom.

[Pete Wood]

05:05 PM on 09/18/2011

THIS COMES FREOM SOMEONE WHO THINKS THAT THE PMG SHOULD MAKE MORE THAN THE PRESIDENT. ENOUGH SAID