U.S. Postal Service looking to close offices, drop one delivery day
The U.S. Postal Service has already reached agreement with the bargaining units for letter processing staff to offer early retirement/severance to 30,000 employees. Now it is negotiating with the letter carriers union. Photo courtesy of USPS.
The U.S. Postal Service announced in August that it would post a third-quarter loss (April 1 – June 30) of $2.4 billion, even after cutting $6 billion in costs, much of that coming from an offer of early retirement/ severance to thousands of employees, freezing salaries, and leaving thousands of vacancies unfilled.
The U.S. Postal Service also recently asked the U.S. Senate Subcommittee on Federal Financial Management to approve dropping mail delivery from 6 days a week to 5. [See video]
Today, [Sept. 2, 2009] the U.S. Postal Service announced a ” hit list” of more than 400 postal stations nationwide that may be closed after Oct. 2, 2009.
Eastern Connecticut has been spared in this round of closures. In fact, only three on the list are in Connecticut – in West Haven, East Haven and Bridgeport. [The complete list as of Sept. 2, 2009 is available at this link: http://www.usps.com/communications/newsroom/welcome.htm?from=home_newsandannounce&page=morenews ]
Email and texting vs ‘snail mail’
The USPS blames the bulk of its revenue loss on the increasing reliance on electronic devices for communication and the country’s lingering recession.
“Ongoing electronic diversion and the widespread economic recession continued to reduce mail volume, resulting in a $1.6 billion decrease in revenue for the quarter,” the USPS states in an Aug. 5, 2009 press release.
To match dwindling mail volume, the USPS has slashed employee hours.
“Work hours were reduced by 88 million hours in the first three quarters of fiscal 2009,” the release states.
USPS Chief Financial Officer and Executive Vice President Joseph Corbett said, “We are on pace to meet our goal of reducing work hours by more than 100 million [equivalent to 57,000 full-time positions] for the entire year.”
Even so, the USPS is now projecting a total net revenue loss of more than $7 billion at fiscal year-end. It has incurred net losses in 11 of the last 12 fiscal quarters. And it projects a possible $700 million cash shortfall as of Sept. 30, 2009.
Early retirements
The USPS also negotiated “targeted staffing reductions” for employees represented by the American Postal Workers Union (APWU) and the National Postal Mail Handlers Union (NPMHU) – the majority of the targeted staff work in mail processing facilities, which are increasingly becoming computerized/automated.
(To see the process in action, view the video at this link: http://www.usngondemand.net/video/26/USPS-Remote-Encoding-Centers )
These employees were given financial incentives to retire or resign. About 30,000 employees are eligible. If everyone takes advantage of the offer, it would save the USPS about $500 million next year, the release states.
The USPS says that because the number of addresses in the U.S. grows by 1.5 million each year, letter carriers represented by the National Association of Letter Carriers and the National Rural Letter Carriers’ Association were not extended the offer. But other talks are in the works.
Pre-funded retiree benefits
To try to save the ship, the USPS has appealed to Congress to grant it some relief from legislation passed in 2006 – before the junk mail hit the fan.
“The organization’s financial situation is compounded by its obligation to pay $5.4 billion to $5.8 billion annually to pre-fund retiree health benefits. This requirement, established in the Postal Accountability and Enhancement Act of 2006, is an obligation that no other government agency has to pay,” the release states.
20 billion fewer pieces of mail
As for the drop in mail volume, it continues to escalate.
Volume declined by nearly 20 billion pieces in 2009, compared to the first three quarters of last year.
Mail volume dropped 7 billion pieces this quarter alone (April 1 – June 30, 2009) compared to the same period last year. (Mail volume for this quarter totaled 41.6 billion pieces.)
The release states that this is the largest consecutive three-quarter drop in total volume since 1971.
For those who have an interest in and aptitude for accounting, you can review the USPS third-quarter financial report (Postal Service Form 10-Q report) at: http://www.usps.com/financials/ Click on Form 10-Q under Quarter Reports.
Other cost-cutting measures
Here are some of the other cost-cutting strategies USPS is pursuing:
- Halting construction of new postal facilities (except where there are health/safety concerns);
- Closing six district offices;
- Negotiating an agreement with the National Association of Letter Carriers that adjusts letter carrier routes to reflect diminished volume;
- Selling unused and under-utilized postal facilities;
- Adjusting post office hours to better reflect customer use;
- Consolidating mail processing operations; and
- Freezing salaries of all USPS officers and executives.
USPS not exactly disappearing
The USPS operates about 37,000 post offices, stations, branches, contract and community post offices (i.e. located in a store).
There also are about 56,000 other locations – including supermarkets, drug stores, and other retailers – that sell stamps and/or offer other postal services.
Nearly 18,000 automated teller machines (ATMs) also dispense sheets of stamps.
And, postage can be purchased and printed on personal computers at usps.com.
Today’s announcement of potential closings is part of the “Station and Branch Optimization and Consolidation” initiative currently being reviewed by the Postal Regulatory Commission (PRC). The postal service is required to file the names of facilities under review with the PRC.
This filing doesn’t represent a final decision on consolidation. “No final actions will be taken regarding consolidation as a result of this initiative until after Oct. 2, 2009,” the release states.
Posted Sept. 2, 2009
This is a link to a video clip of the U.S. Postal Service asking to reduce mail delivery from 6 to 5 days a week (Testimony of Postmaster General John E. Potter before U.S. Senate Subcommittee on Federal Financial Management)
http://www.usngondemand.net/video/17/Postal-Service-Seeks-Legislative-Relief
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