(July 3, 2014) The U.S. Postal Service said this week that it would begin shuttering dozens of mail processing centers next year, a move it said was necessary because of congressional inaction on postal reform.
The USPS, which has lost more than $28 billion since the start of fiscal 2011, says that a new round of processing consolidation centers will save the agency roughly $750 million a year.
According to the plan released Monday, the agency will consolidate as many as 82 facilities starting in January, a process it says will be completed in time for the 2015 holiday season.
That’s on top of the 141 centers that have been shuttered over the last couple of years, which the agency says has already produced $865 million a year in savings.
Postmaster General Patrick Donahoe and other postal officials have long said that the agency was saddled with too many processing centers, given the dramatic drop in first-class mail volume in recent years.
At the same time, the USPS is also shipping an ever-growing number of packages, due in large part to the rise in online shopping.
The agency says the newest round of consolidations won’t lead to any layoffs, with a spokesman insisting that “every effort will be made” to find new jobs for employees at the shuttered processing facilities and that the agency will continue to rely on retirements to pare down its workforce.
In a release, the agency also made clear that the congressional negotiations over revamping the Postal Service — which have gone on for years without a breakthrough — played a role in their decision to move forward with the consolidations, as did its efforts to increase stamp prices.
“The uncertainty regarding legislative reform and review of postal rates in the courts continues to delay needed capital investments in network operations and undermine the future financial viability of the Postal Service,” the agency said in the release.
The USPS has turned to a number of cost-cutting measures in recent years, including shortening hours at certain local post offices.
But Congress would need to strike a deal on some of the most contentious issues when it comes to the Postal Service’s future, including Saturday delivery and the agency’s required prepayments for future retirees’ healthcare.
Postal unions were quick to criticize the consolidations, which will lead to delays in mail delivery that labor groups say will reduce confidence in the postal system.
“This is a direct assault on service to the people of the country, on postal workers and on the Postal Service’s own network,” said Mark Dimondstein, the president of the American Postal Workers Union.
“We need a Postmaster General who will champion the Postal Service,” he added, insisting that ”Donahoe is on a rampage to destroy it.”
Historically, many lawmakers, especially Democrats, have also been cool to the idea of closing mail processing centers, given the lost jobs and slower delivery times.
Senate Homeland Security Committee Chairman Tom Carper (D-Del.), one of the key lawmakers working on postal reform, said it was no surprise that the USPS moved ahead with the consolidations, given the problems congressional negotiators are having.
But Carper also warned the agency that customers around the country already believe the Postal Service is falling short when it comes to delivering the mail.
“Closing more mail processing centers will only make these existing problems worse and hurt the Postal Service’s efforts to generate new mail volume and remain competitive in the growing package delivery market,” Carper said in a statement.