U.S. Post Office Will Cut Service, Close Processing Stations

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In a more detailed explanation of planned service cuts floated last September, the U.S. Postal Service has now published some details to its cuts in first-class mail delivery and the closure of up to 252 of its 487 mail processing stations. As many as 28,000 employees would be fired.

The USPS is seeking total savings of $20 billion by 2015, in an effort to stem the flow of red ink, which reached $5.1 billion last year. The proposed plan is expected to save $2.1 billion in the network optimization budget, which is projected to be lowered by a total of $3 billion.

Part of the savings come from increasing the expected delivery time for first-class mail. According to the USPS, “The size of the existing Postal Service network is dictated by the current overnight transit time in existing service standards.” Currently, the Post Office delivers first-class mail overnight within a 12-hour driving radius of the processing center. The proposed change increases the delivery time to two days for first-class mail to areas within four hours driving time. Beyond the four-hour radius, delivery would be guaranteed for three days or less.

Commercial bulk mailings may still be delivered overnight in some circumstances.

The Postal Service is continuing to study both the closure of post offices in many small towns across the U.S. and the discontinuation of Saturday mail delivery. A state-by-state list of the roughly 3,700 post offices being studied for closure is here. We also did a review in late July of the cities with the most post offices being considered for closure.

Changing the first-class delivery time and closing half the post office’s processing stations will not get nearly as much attention as closing post offices in small, rural towns. Today’s announcement may be greeted by a yawn, but do not expect the next service cut to go down so quietly.

Paul Ausick