In the last reported quarter, the USPS lost more than $2.2 billion, and it expects to run out of money in September -- hence, the possible closures. Most of the post offices at risk are in rural areas, which makes sense. Rural post offices are expensive relative to the number of people they serve, and rural delivery routes are longer because of the number of homes and businesses which must be served in sparsely populated areas.UPDATE, 12:30 p.m.: Around midday Tuesday, the USPS formally announced its proposal to examine about 3,700 of its 32,000 post offices for closure. The Postal Service also proposed a retail-replacement option for affected communities.
In the press release, Postmaster General Patrick Donahoe said: "Today, more than 35 percent of the Postal Service's retail revenue comes from expanded access locations such as grocery stores, drug stores, office supply stores, retail chains, self-service kiosks, ATMs and usps.com, open 24/7. Our customers' habits have made it clear that they no longer require a physical post office to conduct most of their postal business."
The commission has considered several ways to cut costs. One is to eliminate Saturday delivery. Another is to close some post offices.
Some measure of cost cutting at the Postal Service is almost inevitable. The federal government is unlikely to underwrite $10 billion in losses per year, particularly as Congress and the White House work to reduce the overall federal budget deficit, in many cases through austerity measures. The Postal Service is about to get smaller, and it probably should: Many of the functions it once dominated have been undermined by faxes, online data transfer and e-mail, and overnight services provided by UPS (UPS) and Fedex (FDX), among others.
The only issue is where the cuts will fall -- and how deep they'll be.
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