As part of a previously announced $3 billion cost-savings initiative, the U.S. Postal Service (USPS) is moving forward with plans to change delivery standards for first-class mail, the organization said on Dec. 5. The cuts would eliminate next-day delivery for first-class mail and periodicals.
The changes would enable the USPS to save $2.1 billion by realigning its mail processing network. The USPS said on Sept. 15 it was considering $3 billion in cuts that included service changes and facility closures. The organization is examining 252 of its 461 mail processing facilities for potential closure. As a result of the realignment, delivery standards for first-class mail would change from 1-3 days to 2-3 days, while delivery standards for periodicals would also change from 1-9 days to 2-9 days.
“The U.S. Postal Service must reduce its operating costs by $20 billion by 2015 in order to return to profitability,” said David Williams, VP of network operations at USPS, in a statement. “The proposed changes to service standards will allow for significant consolidation of the postal network in terms of facilities, processing equipment, vehicles and employee workforce, and will generate projected net annual savings of approximately $2.1 billion.”
Progress toward the service changes comes as the USPS filed a request on Dec. 5 with the U.S. Postal Regulatory Commission (PRC) for an advisory opinion regarding the services standards. The USPS is not required to comply with the PRC’s opinion but must wait at least 90 days after the request’s filing before the service changes can take effect.
The USPS ended its 2011 fiscal year with a $5.1 billion net loss. The organization said that revenue from its “largest and most profitable product” first-class mail fell 6% year-over-year to $32.2 billion as first-class mail volume also declined by 6% to 73.5 billion pieces.
[UPDATE, Dec. 6]
The Postal Service’s plans to examine 252 of its 461 mail processing facilities are already underway. For example, five Milwaukee processing centers — in Eau Claire, Kenosha, La Crosse, Portage and Wausau — are reportedly already on the closure list, as are Texas centers located in Abilene, Austin, Beaumont, Bryan, Dallas, Tyler, Lufkin, McAllen and two facilities in Waco. Seven Massachusetts mail processing facilities will close, in Boston, Brockton, Lowell, North Reading, Shrewsbury, Waltham and Wareham. Five more are on the chopping block in North and South Dakota. The list goes on; hundreds of local news reports today are devoted to the layoffs expected to result.
