Post office closures are top public concern about USPS

While Congress considers legislation that might be introduced this year to address financial problems in the US Postal Service, the top concern among the general public at the moment is the potential closure of their post offices. With predictions that the USPS will run out of cash mid-way through 2011 on present trends, closures and consolidation have been among the proposals for helping to set USPS finances back onto an even keel.

Lawmakers are currently preparing to re-introduce bills into the new session of Congress, and will also be considering other cost-cutting proposals such as allowing the USPS to move from a six- to a five-day delivery week.

A change to pension pre-funding arrangements is being pushed by mailers and unions as the key issue to address – the USPS was moderately profitable from 2004 to 2006 before the rules on paying into pension and health benefit funds were changed by the 2006 federal postal act, PAEA.

But as regulators stated in their meeting this week, the “hot topic” among the general public’s questions during the last month was potential post office, station and branch closures.

The move to consolidate 2,000 facilities could save the Postal Service $250 million a year over the next two years as the USPS seeks to engage with customers through other means than just “bricks and mortar” post offices.

The USPS confirmed to Post&Parcel last week that only 19% of its 38,000 post offices were currently covering their costs.

Postal Regulatory Commission chairman Ruth Goldway said in the meeting on Wednesday that figures in recent reports that 16,000 post offices were being considered for closure were incorrect.

She had met with USPS delivery and post office operations vice president Dean Granholm, she said, “which led us to believe that there are not 16,000 post offices but 1,600 small post offices being considered for closure, and that there are not 2,000 stations and branches being considered for closure.”

A clarifying statement would be issued in the “not too distant future” on the numbers, she added. The USPS is expected to issue its thoughts on closures towards the end of March as part of a statement on its structural redesign.

Rural communities

The concern among many lawmakers at the moment is for the impacts of post office closures on rural communities in America, in terms of service levels and employment.

West Virginia congressman Nick Rahall wrote to the Commission last month demanding a full review of the Postal Service consolidation plans, and yesterday spoke out against the addition of more facilities to the USPS list of Area Mail Processing centers being studied for possible consolidation.

He said the latest list raised the “disturbing scenario” of West Virginia’s mail processing and distribution being moved out of state entirely.

“The disruption and delay of mail service in rural communities cannot be allowed to continue. Smaller towns deserve the same level of mail and delivery service as big cities,” said congressman Rahall.

Postmaster general Pat Donahoe has been meeting lawmakers to discuss the issue of rural postal facilities, including a meeting with North Dakota senator Ken Conrad earlier this week.

Senator Conrad said he had urged Donahoe to gather input from the potentially affected communities and study the impact a closing would have on these areas.

“In many cases, the post office is the bedrock of a community. Shutting it down could have a ripple effect, impacting the local economy and closing off the community to the outside world,” the senator said.

The responsibility of the USPS towards rural communities is highlighted among “fundamental questions for the future of the post office” posed by the USPS inspector general on Wednesday in a white paper looking at the USPS financial difficulties.

The paper points to the role of the Postal Service in connecting far-flung areas to the rest of the nation, such as in Alaska, where “mail is the primary means used to transport groceries, merchandise, and many other necessities”.

“In some rural communities, Post Offices are the focal point of the town and the last remaining business. They provide a place for residents to connect to one another, but they may not be needed to provide universal postal service,” said the paper, asking whether the USPS should still be responsible for continuing to finance such facilities.