The U.S. Postal service plans to close nearly half of the nation’s mail processing centers beginning May 15th. The move, which follows a five-month study on 264 of the country’s 461 centers, puts more than 35,000 workers’ jobs at stake. 24/7 Wall St. has identified the nine states where the USPS plans to close the most mail centers.
The plan is USPS’s latest attempt to stem mounting losses. At the current rate, the postal service’s debt is projected to reach $18 billion by 2015. The mail center consolidations are part of a plan to save $2 billion per year and $20 billion by 2015.
While it is still not clear exactly how these changes will affect delivery, a recent plan currently under consideration would make overnight delivery for first class mail impossible in many locations.
The USPS is the first to point out that mail volume has declined precipitously because of electronic mail and the downturn in the economy. This places the postal service in an untenable position as it relies on revenue from mail service instead of tax dollars.
First-class stamped mail has declined more than 50% in the past 10 years, from 52 billion deliveries in 2002 to 26 billion in 2011. According to an email from USPS representative Sue Brennan, the drop in mail has resulted in significant excess capacity. She wrote, “We have an infrastructure that has expanded over decades designed to handle hundreds of billions of pieces of mail and mail volume is no longer increasing. 2006 was our peak year. We need to right-size our infrastructure.”
According to the plan, neighboring facilities will absorb the functions of the 223 targeted centers. The USPS maintains that the 35,000 jobs will be lost through attrition, though employees will be relocated to other facilities initially. When not available, the employees will be offered other work, such as being post office clerks or mail carriers. In some cases, workers could be relocated to different states.
Nine states will see eight or more processing facilities closed, according to 24/7 Wall St. Almost half of the 223 plants scheduled to be shuttered are located in the these nine states. For the most part, these states, which include California, New York and Texas, have the largest populations in the country.
If these measures are allowed to go through, some states will certainly be affected more than others. While unemployment in the U.S. has declined over the past year, it remains high in several states — a number of which are set to lose the most processing facilities. Five of the nine states set to lose the most centers have unemployment rates above the national average of 8.3%. California and Illinois have some of the worst unemployment numbers in the country, and these cuts will only hurt their regional economies even further.
These are the nine states where the U.S. Postal Service wants to close the most mail centers, according to 24/7 Wall St.: