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USPS Offers Massive Changes to Remain Solvent

September 16, 2011
WASHINGTON, DC—Faced with a massive nationwide infrastructure that is no longer financially sustainable, the U.S. Postal Service has proposed sweeping changes designed to save the organization up to $3 billion a year by cutting its network of processing facilities by more than half and adjusting service standards.

Proposals under consideration include studying nearly 250 processing facilities for possible consolidation or closure, reducing mail processing equipment by as much as 50 percent, dramatically decreasing the nationwide transportation network, adjusting the workforce size by as many as 35,000 positions and revising service standards for First-Class Mail.

“We are forced to face a new reality today,” said Postmaster General Patrick Donahoe. “First-Class Mail supports the organization and drives network requirements. With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic. Since 2006, we have closed 186 facilities, removed more than 1,500 pieces of mail processing equipment, decreased employee complement by more than 110,000 through attrition and reduced costs by $12 billion.”

Mail volume has declined by more than 43 billion pieces in the past five years and is continuing to decline. First-Class Mail has dropped 25 percent and single piece First-Class Mail—letters bearing postage stamps—has declined 36 percent in the same timeframe, and nearly 50 percent in the past 10 years. The decline has created substantial excess capacity within the postal processing network.

The mail processing network itself was constructed to process and deliver First-Class Mail within a one- to three-day window depending on where the mail is sent and delivered. With the proposed change, the new service standard would become two to three days, meaning that, on average, customers would no longer receive mail the day after it was mailed. If implemented, the change in service standards would allow for significant infrastructure changes to be made across the nation.


 

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