USPS informs staff after decision on 223 mail plant closures

The US Postal Service is in the process of informing employees at more than 200 of its mail processing plants across the United States that their facilities will close. Following a five-month review of the USPS mail processing network, which currently comprises 461 Area Mail Processing (AMP) plants, the Postal Service said today that 223 are set to have operations consolidated into other plants.

A further six plants are on hold for further study, with 35 reviewed plants set to survive the axe.

As plants close or partially close, not every job will be lost, but USPS is looking to cut 35,000 jobs from the current 151,000 roles in mail processing. USPS has already cut 34% of its workforce since 2000.

The struggling Postal Service is currently looking to reduce its overall operating costs by $20bn a year by 2015, and is hoping that downsizing its mail processing network to more efficiently handle a considerably smaller mail volume will help save around $2.1bn a year.

Speaking to employees yesterday, US Postmaster General Patrick Donahoe said: “We have too much unused capacity in the mail processing network and we’ve got to make these changes to take some pressure off our finances – if we don’t – we’re sitting there with billions of dollars in costs against a very inefficient network and that will not help this organization in the long run.”

The Postmaster General added: “As we go forward with this change it is going to be difficult but we must do this inorder to keep the Postal Service healthy financially going into the future.”

Notification process

Although the Postal Service promised Congress a moratorium on mail plant closures until May 15, in the hope of postal reform legislation being passed, the moratorium did not prevent closure reviews from continuing.

USPS said today that it will not be closing plants prior to May 15.

However, it said it is now beginning a “lengthy” notification process to inform staff about the closures so that the consolidation plans can be implemented during the summer and autumn of 2012.

Union contracts require a 90-day notice period for the jobs that will be lost.

USPS is also waiting on a regulatory review of associated changes to First Class Mail standards. It wants to turn First Class Mail into a 2-3 day service, abandoning overnight delivery for most mail, in order to maximise the efficiency of its restructured network.

The Postal Regulatory Commission is expecting to complete its review by mid-July.

First Class Mail, which makes up just over 40% of US mail volumes but contributes more than 60% of mail revenues, has seen its volumes shrinking 25% since 2006 thanks to competition from electronic communications.

Growth in parcel services and Standard Mail at USPS has not helped counter the loss of First Class Mail revenues, leaving USPS $13bn in debt with a legal borrowing limit of $15bn and forecasts of making more than $14bn in additional losses each year going forward.

Congress

Members of the US Congress, who have spent many months calling for each other to take action to save the ailing US Postal Service, were reacting angrily today about closures planned for their local areas.

Senator Susan Collins, one of the leading figures pushing postal reform within Congress, today described plans to close a plant in her home state of Maine as “ill-conceived”.

“This plan makes no sense at all and should be abandoned,” she said. “The closure of this plant would lead to job losses and lengthy delivery delays that will drive still more postal customers to use electronic mail or to seek other alternative means of delivery.”

Senator Bernie Sanders, the Vermont Independent seen as being close to the unions, said today of the consolidation plan: “The plan announced today by the U.S. Postal Service is deeply flawed and Congress must change it. I expect comprehensive postal reform legislation to be on the floor of the Senate within the next few weeks.”

Sanders, who has been lobbying for Congress to save USPS by handing over pension surplus money and abandoning future healthcare liability pre-funding, instead of allowing network cuts, wants an “entrepreneurial commission” to find new revenue opportunities for USPS.

He said today: “At a time when the Postal Service is competing against the instantaneous delivery of information from email and the Internet, slowing down mail delivery service will result in less business and less revenue, and will bring about a death spiral for this institution which is so vitally important for all Americans.”

Senator Thomas Carper, another postal reform driver within Congress, saw his home state of Delaware avoiding the loss of its mail processing plant today.

He expressed relief at the Hares Corner plant being spared, but pointed out that if nothing is done to save the Postal Service, it would be insolvent within a year.

“A collapse of the Postal Service would be devastating, bringing more pain to communities across the country and wreaking havoc on our already fragile economy. That is why Congress and the Administration must act quickly to address the Postal Service’s significant financial problems,” he said.

Carper added his belief that his 21st Century Postal Service Act would be considered by the full Senate in “early spring”, adding: “I hope that Congress will pass a final bill for the President to sign into law soon thereafter”.