[Updated] USPS confirms that mail plant closures are on hold until 2016

[Updated] USPS confirms that mail plant closures are on hold until 2016

The US Postal Service has put plans to close dozens of mail processing plants later this year on hold until 2016, it has confirmed this morning. The federal agency had been intending to close 82 sorting facilities this year, as part of a second phase of its long-running network consolidation strategy, which aims to save hundreds of millions a year in operating costs.

The Postal Service did close 141 facilities in 2012 and 2013, holding out the second phase of the plan in case the US Congress continued to fail to enact crucial postal reforms to help stem the financial crisis at USPS.

Those postal reforms have not come, after four years of trying, with the result that until last week the second phase was set to go ahead this year.

Last week it emerged that the Postal Service has informed major customers via its RIBBS system that remaining closures scheduled for later this year, about 68 plants, are now listed as “TBD” (to be determined).

Three facilities in North Carolina, Houston and New York appear to still be scheduled for closure.

Some employees have been told that closures have now been put on hold until April 2016. Union officials have suggested some closures could be on hold until October 2016, but are waiting for clarifications from USPS.

[updated 1.31pm BST] USPS spokesperson Sue Brennan told Post&Parcel today: “The Postal Service has decided to defer most of the plant consolidations that were scheduled to take place this summer as the final stage of its Network Rationalization Initiative.

“The Network Rationalization Initiative is the multi-phase, multi-year effort announced in 2011 to balance mail processing infrastructure costs against current and anticipated mail volumes and successfully right-size the postal processing network.

“The decision to defer the next phase of the initiative was based upon operational considerations, and was made to ensure that the Postal Service will continue to provide prompt, reliable and predictable service consistent with the published service standards.

“The planned consolidation activities will resume in 2016. The Postal Service will continue to implement network efficiencies and pursue service performance improvements as it has always done,” added the USPS spokesperson.

Rationalisation

The Postal Service has implemented a moratorium on mail processing plants before, in 2011-12, in the hope that Congress would take the time to pass needed postal reforms. On that occasion Congress failed to pass the legislation, and plant closings continued. The second phase closures were also put back, to 2015, to give Congress more time — again, with no payback from Capitol Hill.

The USPS network rationalisation programme has aimed to downsize processing infrastructure in response to the declining mail volumes at the Postal Service. The Postal Service delivered 211.7bn mail pieces in 2005, but by 2014 the number had fallen 27% to just 155.4bn.

Although the US Postmaster General has changed since the programme was started, new USPS chief Megan Brennan was intimately familiar with the plans under her previous role as chief operating officer.

The USPS network is being re-designed to consolidate volumes within a smaller number of area hubs, rather than sorting volumes more locally, so that mail can be more efficiently processed in larger machines.

The consequence for mail services from the network redesign was that First Class Mail would lose most of its overnight service, switching from a one-to-three day service to a two-to-three day service.

However, Congress has been hearing concerns from customers and communities regarding the impact of the changes on Postal Service delivery standards, with the community newspaper industry last week telling the Senate that mail plant closures were “99%” behind problems seen in rural mail services.

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