Massive new USPS mail processing plant set to open soon in Portland, Oregon

By Bill McAllister – March 7, 2018
Sometime later this year, Postmaster General Megan J. Brennan is likely to head to Oregon for an unusual dedication. What she will be formally opening will be one of the largest mail-processing plants the United States Postal Service has created in an era of declining letter volume.

The new plant, near Portland International Airport, has the second largest work room of any USPS plant — big enough, the engineers say, to hold two Nimitz-class aircraft carriers, 12 soccer fields or 48 Boeing 737-800s.

Only the New Jersey International Mail Processing Facility has a larger work room, according to the engineer who oversaw the Portland facility.

It is unbelievably large, said Joseph Cogan, president of American Postal Workers Union Local 128.

What will make the multi-million dollar new facility special to many postal officials in Washington, D.C., is not the size, nor the decades of wrangling between Portland officials and the Postal Service that preceded its construction.

Nor is it the novel way postal and Portland officials arranged for its financing.

What will make this new facility noteworthy of national attention is a massive package-sorting machine that Cogan says will take eight months to install.

It is called the Enhanced Package Processing System (EPPS).

It should be able to process 30,000 packages an hour compared to compared to 5,000 packages an hour by other machines, according to a project engineer.

If it works as expected, the machine could be a solution to a growing postal problem.

Packages are a lot more expensive than letters to handle and have become the one segment of the mail that is growing rapidly, faster than postal revenues.

The new Portland facility will handle mail for Oregon and a large part of Washington state, just as the current three-story post office in downtown Portland does.

Postal officials in Washington declined to discuss the plant with Linn’s, saying postal workers had not been briefed on the facility.

Portland officials lobbied for decades for its construction.

Cogan recalls reporting for work at the downtown post office 34 years ago and being warned not to get comfy in the facility.

It was supposed to be destined for a quick replacement, he said.

Construction on the new plant is scheduled to end March 24. When it is opened, workers will operate 52 letter-sorting machines, 92 truck loading docks and a large vehicle maintenance facility, according to several officials.

The remarkable story of how Portland got the new $92.6 million building at a time when the Postal Service has been shuttering processing facilities across the country has been well chronicled in The Oregonian newspaper and local media.

The saga offers a fascinating insight into how the federal agency has been able to finance a major project in a time of declining letter volume and while running multi-million dollar deficits.

While Portland officials have eyed the 13.4-acre site of the current main post office in the city’s business district since the 1980s, their formal bid for the site did not begin until 1995. First-class mail volume was growing, and it cost only 32¢ to send a first-class letter then.

Portland Mayor Vera Katz initiated the city’s efforts in the spring of 1995 with a letter urging the federal agency to vacate its downtown processing plant and move to another location, allowing the city to “realize the vision of the River District” by selling the postal site to developers.

The Postal Service was not interested initially, according to the records of the Portland Development Commission.

City officials persisted, arguing that the postal site could give the city “a once in a generation” chance to remake its central business district.

“Portland is a lot about plans,” said Lisa Abuaf, development manager for Prosper Portland, a city agency. “We have long range plans that we stick to.”

In 2001, the commission issued a plan for what it termed the “Pearl District” calling on the city to “reduce the dominance of the Post Office and integrate it into the fabric of the city.”

It also urged the city to “reestablish a partnership with the U.S. Postal Service to redevelop and re-use portions of the site” and “encourage the relocation of the regional distribution facility.”

That clearly gave Portland officials a new role to play, but the Postal Service didn’t change quickly.

It was not until 2016 that the city, with the help of Trammell Crow Co., a Dallas-based developer, devised a scheme for a new facility on a 47-acre parcel that once had been a golf course.

Under the plan, Portland would pay the Postal Service $88 million for its downtown facility and the Postal Service would pay $69 million for the new site 5½ miles away near the airport.

Trammell Crow is a subsidiary of CBRE Group, an even larger developer. CBRE holds an exclusive contract for sale of “any and all USPS owned properties.”

The Oregonian said CBRE was not involved in the Oregon transaction.

The postal deal, described as Portland’s most expensive redevelopment project, was not complete until a Nov. 22, 2016, ceremony at which postal officials marked the transfer of their downtown land to the city.

“This is one of those historic moves that really makes sense for us as a city,” Mayor Charlie Hales said at the ceremony.

“With this transfer of property, Portland will be able to enact its vision of a revitalized Central City and all that it entails,” agreed Postal Facilities Vice President Tom Samra.

In signing the sales agreement, the city agreed to lease the post office property back to the Postal Service at a nominal cost until the new facility is available. The Postal Service agreed to put a retail facility back in the downtown.


Related: COO Delivers Operations Update 2-27-2018

Also see: USPS Selects Lockheed Martin to provide Enhanced Package Processing System

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