The U.S. Postal Service on Monday delivered on its promise. The cash-strapped agency, which has been hemorrhaging red ink for years, plans to save billions by closing about half of its 461 mail processing facilities and eliminating as many as 120,000 jobs by 2015.
Closing the processing centers would save the postal service an estimated $2.1 billion annually and trim at least 28,000 jobs. To reduce costs by $20 billion, more than 90,000 additional jobs would be lost.
Closing the processing facilities would lengthen the distance a piece of mail travels between its initial drop-off point and its final destination, meaning slower delivery of letters, newspapers, magazines, DVD rentals and mail-order prescriptions.
For the average American, that means a birthday card mailed to Aunt Lucy, who lives 35 miles away, would take two to three days to arrive.
The postal service has elected to take the path of a number of industries and businesses: If revenue has slipped, cut services and personnel, and hope the customers don’t notice.
Independent reporting for Pine Bluff & Jefferson County since 1879.
If enacted, the changes would start in March at the earliest.
First-class mail deliveries topped out at 104 billion pieces a decade ago, then dropped to 73.5 billion pieces delivered in 2010. The number is expected to slip further to 39 billion deliveries by 2020 or down 46 percent from 2001.
The agency already has announced a 1-cent increase in first-class mail to 45 cents beginning Jan. 22, which could drive more customers to the Internet.
With first-class volume dropping by 7 percent annually, the agency has more capacity than it can afford. Flexibility is not a word found in the postal service manuals.
The agency submitted its plan Monday to the Postal Regulatory Commission, which may issue a nonbinding opinion on the proposals. The commission has become a toothless tiger
Separate postal reform bills pending in the House and the Senate would give the agency more authority and liquidity to prevent immediate bankruptcy. However, expecting congressional action on the legislation anytime soon, especially if the steps are seen in an election year as clearing the way for layoffs and closing post offices in many smaller towns, is foolish.
Congress has not been known lately to be proactive. We are not sure if the lawmakers are capable of any common sense action with the current political divide in Washington. Provisions in the House and Senate legislation would require more layers of review before the agency could close post offices and processing centers. Postmaster General Patrick Donahoe says the proposed cuts are part of $3 billion in reductions aimed at helping the agency avert bankruptcy next year. Donahoe has been pushing for congressional action that would give the agency the authority to eliminate Saturday delivery, raise stamp prices and reduce health care and other labor costs. The benefit packages for postal workers are unmatched in the private and governmental sectors.
The postal service faces default this month on a $5.5 billion annual payment to the Treasury for retiree health benefits and expects to have a record loss of $14.1 billion next year.
While we don’t like the options – cut back or go bankrupt – the agency must become leaner and perform better to retain its customer base. We treasure our mail service, but acknowledge the realities of the Internet in everyday life.
Supporters of the post office believe the agency is taking the wrong approach by cutting services. The cuts will likely encourage more consumers to pay their bills online and use private carriers such as FedEx and UPS, resulting in even less revenue in the future.
Rural states like Arkansas can expect to feel the impact worse than metropolitan areas.