Postal Service faces "new reality," pitches cuts

Updated at 1:07 p.m. ET

WASHINGTON - In announcing the "new reality" it must face, the financially troubled Postal Service said Thursday it may close more than 250 mail processing facilities across the country and plans to reduce service standards for first-class mail in an effort to cut costs.

Such a change would mean that a letter mailed with a first-class stamp would take longer to arrive at its destination, increasing delivery time from a minimum of one day to two days, the service said.

The steps are part of a broad effort to cut costs for the agency that lost $8.5 billion last year and is facing ever more red ink this year as the Internet siphons off the lucrative first-class mail and the stagnant economy holds down the growth of advertising mail. Over the last five years mail volume has declined by more than 43 billion items.

"We are forced to face a new reality," Postmaster General Patrick Donahoe said in a statement. "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."

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Postal officials said 252 mail processing facilities across the country will be reviewed over the next three months for possible closing. Currently there are 487 such offices. That's in addition to about 3,700 local post offices also being reviewed for closure. Closing the mail-processing facilities could affect 35,000 workers.

In addition, the agency said it plans to reduce current delivery standards for first-class mail. Such mail is now supposed to be delivered in one-to-three days depending on how far it has to go. That will be changed to two-to-three days, meaning mailers could no longer expect next-day delivery in their local community.

Officials said that could have some impact on commercial mailers but individual customers are not likely to notice the change. They promised to work with businesses to help solve any problems the change might cause.

The closings and service changes could save the post office as much as $3 billion annually and are part of an effort to reduce annual costs by $6.5 billion. Other savings are being sought through requests that Congress allow the post office to eliminate mail delivery on Saturdays and change or eliminate an annual $5.5 billion payment the post office is required to make into a fund to cover future retiree medical benefits.

Last year the Postal Service had revenue of $67 billion and expenses of $75 billion.

"Cutting costs is essential to saving the Postal Service and the 8 million private sector workers whose jobs rely on it," said Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, an industry trade group. "The Coalition welcomes this important step and looks forward to the details. But what's needed even more are fundamental reforms only Congress can make."

[tmittelstaed]

The fact is that reducing the frequency of mail delivery is what we really need to do. Very little US mail is so time critical that it must be delivered within 3 days. Time critical stuff goes by fedex anyway.

Mail delivery could drop to every other day, and it would not impact anything.

[hartleyzoo]

Morons. Ben Franklin is rolling over in his grave.
Don't raise rates, cut services or close more post offices or eliminate more routes. Cut waste, fraud and corruption in the post office. You'll have plenty of tax payer dollars and postage revenue leftover to provide the services citizens deserve.
Heck, maybe you can have GM (aka govt motors) to donate a bunch of those $41,000 Volt golf carts nobody else wants that only run 40 miles on a charge before they need to plug back in. Perfect for most of your routes.

[ReidBaron]

Why not turn Post Offices into shops selling more Postal materials, like mailboxes or hats and shirts, plus other conveniences, like cigarettes or lottery tickets.

This would close the budget gap.

[tmittelstaed]

They would but Congress prohibited them from doing this. This was one of the things the Postal Service asked if it could do.

[Usillies]

I dont care what other countries are doing....not my situation--
Lower the price of gas--it should not be up to some worried guy on Wall street. It should cost what it costs...like other products. The companies that are making a profit should be public, not the price of gas. The way it is supposed to be.

What about Netflix and Ebay...how is that not carrying the USPS? Ebay alone should pick up the slack from fewer letters because packages bring in more income. That is a market that was not there before its creation. Netflix--if greed doesnt end that company--only uses USPS per its agreement.

So tell me again why we should be paying .50 for a letter to be delivered??? I am also still waiting for 2 day delivery.....my letters take a week to get to their destination...and I live in Milwaukee.

[ajvw]

Postal Service faces "new reality," pitches cuts

This is only "new" if you've been asleep the last 15 years

[venusvegasvada]

Screw the Post Office. I'm so tired of getting junk mail. If this what it takes to stop it, then so be it.

[GoUnion86]

venusvegasvada-If you hate the postal service so much then take down your mailbox.It's that simple. If you send a card or pay a bill use UPS or FedEx and pay them 12$ to do it.

[rwsmith29456]

"....reduce service standards for first-class mail in an effort to cut costs." That is a sure fire way to run an outfit into the ground.

[pwk82147]

The ever increasing cost of fuel and equipment maintenance surely have a substantial effect on the USPS financial dilema. I find it sad that so many always want to blame the front line workers for every business failure yet they think nothing of their own personal contributions at their employ or the wages and benefits they receive.

While there may be those who could contribute more, there are many who work hard each day. While union contractual terms may but not necessarily hinder proper personpower staffing, I contend that more times than not the problem starts at the top where obscene salaries and benefits along with who knows what other perks. Add to that all the spans and layers of non-service providers between the top cat and the boots on the ground where the first cuts should take place.

Moving to a 4 day delivery week should significantly reduce fuel and tire costs what about 30% while extending vehicle life and overall maintence costs. Regional postal boxes as suggested could be beneficial in cost reductions, however, problematic and unacceptable for servicing those unable to leave their home or get to a regional postal stop. One issue would be to have post office service counters open either until 6pm or 4 hrs on Saturdays for those who have regular work hours. Cut overtime and also cut all salaries above $200,000 by 20% and any above $100,000 by 10%. Raise 1st class stamps to $.50

[rwsmith29456]

Thanks very much. My wife works her rear end off on her rural route. Rural union is not the same as 'city carrier' union. It's blind and unrealistic to not recognize the fuel cost problem. The US post office is the cheapest in the world. For an industrialized country not even being able to run a post office is beyond stupid, but it seems that we have to accept more 'stupid' every day.

[Thinkerwiz]

Surprise, Surprise....the government model Postal Service...opens after most folks are at work....closes as folks are going home from work...complaints on poor service are blown off, no matter how lame an employee is they won't be fired, money in cards is continued to be stolen at Christmas and they have had bunches of years to figure this out.....gimme a break. My tax dollar at work.....

[noloyalisti]

The white wing Republicon Corporation is straining at the bit with the thought of getting rid of union workers at the Post Office. Part of their War on the Middle Class and making sure America remains by, of and for the giant corporations and the greedy rich who run them. The campaign donors of the Republicons.