US regulators savage post office closure plan

US regulators have criticised plans by the US Postal Service to close thousands of post offices. The Postal Regulatory Commission issued its Advisory Opinion last week, stating that the USPS initiative dubbed the Retail Access Optimisation Initiative hardly lived up to its name.

“The primary Commission finding is that notwithstanding its name, the Retail Access Optimization Initiative is not designed to optimize the retail network,” said the Commission. 

The USPS is in the process of reviewing around 3,600 post offices for possible closure, although earlier this month it promised Congress that no facility would actually be closed before May 2012.

The regulator’s verdict was that USPS did not currently collect the right information about all its facilities to determine which should be closed under its plan, which aims to cut retail operating costs by around $200m a year, while providing alternative access to postal customers in the affected areas through partner-run postal counters.

The Commission said given the data limitations, it was unable to determine how much money the USPS plans were likely to save.

Ruth Goldway, the Commission chairman, explained: “The Commission was unanimous in expressing its concern that the Postal Service’s plan did not and could not, because of lack of data and analysis, determine the facilities most likely to serve the greatest number, reduce the greatest costs, or enhance the potential for growth or stability in the system. 

“We agree that the Postal Service access network should be right-sized but found that the RAOI was not the proper approach to meet that goal.” 

The Commission, which currently has four Presidentially-appointed members and a vacant seat, does generally support the downsizing of the post office network to respond to a fall in customer demand and greater use of online postal services.

Its Advisory Opinion cannot prevent the USPS from moving forward with its plan, but in a personal addition to the document, Goldway said she believed if USPS did not follow the Commission’s recommendations, it could risk breaching US postal law.

Opinion

Along with the problems in the reviewing of existing post offices for closure, the Commission also cast doubt on the effectiveness of alternative arrangements for communities that lose their post office.

Many USPS alternatives only offered “limited” ranges of postal services, it said, also suggesting that the Postal  Service use more modern techniques to determine where alternative access points should be made available.

And, the Commission said it was not sufficient for the Postal Service to have only plans to establish alternative retail facilities at some point in the future when seeking to close a post office.

“Alternative access must be a presently available, viable and adequate substitute for existing access,” said the Opinion.

Goldway said public appeals filed in more than 160 post office closures before the current initiative had all seen concerns expressed by local communities about losing postal service access.

“With real, practical alternatives available, these communities would be far less likely to feel the loss of a neighborhood post office and would join with the Postal Service in the move to efficient alternatives,” said the Commission chairman.

The Commission did say new post office review procedures recently introduced were a “significant improvement” over the prvious post office closure system, but warned that they did not include post-review checks to ensure the process was working properly.

Although the PRC verdict cannot prevent the USPS carrying out its plans, its recommendations can influence the final shape of the plans.

About The Author

Ian Taylor

Ian Taylor is the Editor of Triangle’s Mail & Express Review Magazine and the www.postandparcel.info portal. Ian has been a business journalist for almost 30 years, editing and writing for a wide range of magazines and newspapers with a particular focus on the transport and logistics industries.

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