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Goldway says “problems” in USPS rural post office plan could hit revenue

Thursday, January 31st, 2013

The chairman of the US postal regulator has suggested that the US Postal Service rethink plans to cut opening hours at profitable rural post offices in order to save money.

Ruth Goldway said by including “thriving” post offices on its list of outlets that will have window service hours shortened, USPS was “more likely to hurt revenue than to save costs”.

The head of the five-member Presidentially-appointed Postal Regulatory Commission said on Tuesday that there were “certain problems” in the Postal Service plan to cut costs from its rural post offices, which needed addressing.

POStPlan

Financially struggling USPS decided last summer to reduce opening hours at more than 13,000 of 17,000 rural post offices as an alternative to closing 3,700 outlets outright, in order to save money from its retail network.

The so-called “POStPlan” promised to shut underperforming rural post offices, and consult local communities about each outlet concerned – with the idea that some communities might choose to have a post office closed entirely so that a nearby post office could have longer opening hours, rather than both outlets having window service cut to as little as two hours per day.

During the consultation process this autumn, AdvoCare, a local non-profit group in Great Cacapon, West Virginia, challenged plans to cut its local post office from eight-hour daily service to six hours.

USPS estimates were that the post office was generally seeing activity for only 4.6 hours per day. A survey of local residents came back with 96% in favour of cutting window service hours at the post office in order to save money.

AdvoCare sent a formal complaint to the regulator suggesting that local residents had been “confused” by the fact that USPS had called its consultation a “discontinuation study” – inferring that the local residents were of the opinion that their post office would be closed if they did not agree to have operating hours curtailed.

The non-profit also accused USPS of unfairly discriminating against small post offices, by using size rather than profitability as grounds to curtail service hours.

“Problems”

“The Postal Service may wish to review the list of 17,000 POStPlan offices and preserve those which are thriving”

AdvoCare’s complaint was dismissed by the Postal Regulatory Commission on Tuesday, with the regulator stating its belief that USPS was playing by the rules, in that it has the powers to provide fewer services in different areas in order to run a more efficient network.

However, as the complaint was dismissed, the Commission’s chairman, Ruth Goldway, said the case had highlighted “certain problems with the POStPlan that should be reviewed and addressed by the Postal Service”.

“Complainants wonder why an active, well-attended post office with a positive cash flow would be included in the POStPlan,” said Goldway.

“This question is understandable, and the Postal Service may wish to review the list of 17,000 POStPlan offices in order to find and preserve those post offices which are thriving and for which a reduction in hours would seem more likely to hurt revenue than to save costs.”

In a concurring opinion attached to the dismissal of the AdvoCare complaint, Goldway also described the Postal Service’s use of the term “discontinuance study” in its community engagement activities as “confusing”.

“We have heard from other communities in the context of post office closing appeals that the Service seems to have made its mind up before engaging in a discontinuance study, which, in the USPS Handbook, presumes an open mind and the chance that a decision to keep a post office open is possible,” said the Commission chairman.

Goldway said the use of the term “discontinuation study” was different in the context of the POStPlan, because a decision has been made in advance of consulting with the community – to keep the post office open, but with shorter opening hours.

The PRC chairman called on USPS to ensure that when dealing with communities, it is clearer in explaining what is going on.

Responding to the comments from the regulator, a spokesperson from the Postal Service told Post&Parcel yesterday: “The Postal Service is reviewing the PRC’s decision and Chairman Goldway’s concurring opinion. We will continue to evaluate Post Plan for the duration of its implementation.”

Source: Post&Parcel/PRC/USPS

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