Cuts to first-class mail to slow delivery in 2012

HOPE YEN

Asso­ci­ated Press

WASHINGTON — 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 or FedEx, lead­ing to lower rev­enue in the future.

Posted by AP News on Dec 5 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.