Cuts to First-Class Mail to Slow Delivery in 2012

Cuts to first-class mail to slow delivery in 2012WASHINGTON (AP) - The cash-strapped U.S. Postal Service said Monday it is seeking to move quickly to close 252 mail processing centers and slow first-class delivery next spring, citing steadily declining mail volume.

The cuts are part of $3 billion in reductions aimed at helping the agency avert bankruptcy next year. It would virtually eliminate the chance for stamped letters to arrive the next day, a change in first-class delivery standards that have been in place since 1971.

The plant closures are expected to result in the elimination of roughly 28,000 jobs nationwide.

At a news briefing, postal vice president David Williams stressed the move was necessary to cut costs as more people turn to the Internet for email communications and bill payment. After reaching a peak of 98 million in 2006, first-class mail volume is now at 78 million. It is projected to drop by roughly half by 2020.

"Are we writing off first class mail? No," Williams said. "Customers are making their choices, and what we are doing is responding to the current market conditions and placing the postal service on a path to allow us to respond to future changes."

The cuts, now being finalized, would close 252 out of 461 mail processing centers across the country starting next April. Because the consolidations typically would lengthen the distance mail travels from post office to processing center, the agency also would lower delivery standards.

Currently, first-class mail is supposed to be delivered to homes and businesses within the continental U.S. in one day to three days. That will lengthen to two days to three days, meaning mailers no longer could expect next-day delivery in surrounding communities. Periodicals could take between two days and nine days.

Williams said in certain narrow situations first-class mail might be delivered the next day - if, for example, newspapers, magazines or other bulk mailers are able to meet new tighter deadlines and drop off shipments directly at the processing centers that remain open.

But in the vast majority of cases, everyday users of first-class mail will see delays of one or two days, including those who pay bills by check, send birthday cards, write letters, or receive prescription drugs or Netflix DVDs by mail.

After five years in the red, the post office faces imminent default this month on a $5.5 billion annual payment to the Treasury for retiree health benefits. It is projected to have a record loss of $14.1 billion next year. The Postal Service has said the agency must make cuts of $20 billion by 2015 to be profitable.

It already has announced a 1-cent increase in first-class mail to 45 cents beginning Jan. 22.
Separate bills that have passed House and Senate committees would give the Postal Service more authority and liquidity to stave off immediate bankruptcy. But prospects are somewhat dim for final congressional action on those bills anytime soon, especially if the measures are seen in an election year as promoting layoffs and cuts to neighborhood post offices.

On Monday, the Postal Service said it welcomed congressional changes that would give it more authority to reduce delivery to five days a week, raise stamp prices and reduce health care and other labor costs. But the Postal Service said it was opposed to provisions in both the House and Senate measures that would require additional layers of review before it could close post offices and processing centers.

"Speed is very important to the Postal Service in our ability to capture savings," Williams said.

Maine Sen. Susan Collins, the top Republican on the Senate committee that oversees the post office, believes the agency is taking the wrong approach. She says service cuts will only push more consumers to online bill payment or private carriers such as UPS (UPS) or FedEx (FDX), leading to lower revenue in the future.


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What is slower than snail mail? Get rid of third class.

December 08 2011 at 8:34 PM Report abuse +1 rate up rate down Reply
Garrett Burke

The Post Office needs to do a few things...

1) Reduce labor costs! If that means getting rid of the union, do it

2) Re-brand itself. Advertise. Don't get rid of Saturday mail, it's an advantage UPS/FedEx don't have (unless you want to pay lots of money). First Class Mail is cheap and you can send 13oz or less for half the price or less of FedEx/UPS. I send thousands of 8oz packages First Class for $2.60 each, delivered in 1-3 days depending on distance. Even Flat Rate Priority is usually cheaper than FedEx/UPS at about $5. For larger/heavier items FedEx/UPS may be cheaper but USPS could adjust their pricing in these cases. Express Mail Flat Rate is cheap. Under $18 for Next Day ($13 if you are an eBay seller), not much more for medium sized packages. Coming from someone who ships THOUSANDS of packages a year, they are just as reliable than UPS/FedEx.

3) Improve speed of lines in the Post Office. Educate people on how to print postage at home instead of coming to P.O. to mail something and wasting their fellow citizens time, or on the self service postage printer in the lobby. Incorporate this into advertising. Hire employees who actually have fear of losing their job if they aren't fast and efficient (ex: not Union)

4) Improve problem resolution (redirecting packages, insurance claims, missing mail)

5) Stop using such enormous buildings for every location. The rent / building cost has to be astronomical and it's not as accessible compared to being in a strip mall type location with other businesses. Follow UPS/FedEx strategy of having smaller branches in strip malls and 1 large hub per metro area (or maybe 2 for larger areas)

December 05 2011 at 3:29 PM Report abuse +2 rate up rate down Reply

Cut employment of Postal Supervisors. Cut pensions by the reductiion in service. Make junk mailers and not for profits pay full postage!

December 05 2011 at 3:15 PM Report abuse +3 rate up rate down Reply

This is like a chlld saying "if you don't give me more candy I will not make good grades".
Good-by USPS

December 05 2011 at 2:32 PM Report abuse +3 rate up rate down Reply