Postal Service Must Face a "New Reality"
As consumers depend more on electronic communication, mail volume has plummeted by more than 43 billion pieces in the past five years - and continues to fall.
The U.S. Postal Service said on Thursday that they plan to make serious changes to their infrastructure in order to cut costs and stay financially sustainable. Though itís considered a federal enterprise, USPS receives no federal tax dollars and depends entirely on the sale of postage, products, and services to fund its operating costs.
ďWe are forced to face a new reality today,Ē said Postmaster General Patrick Donahoe.
To save up to $3 billion per year, USPS proposed cutting its network of processing facilities by over half and adjusting service standards. They are considering 250 processing facilities for consolidation or closure, cutting mail processing equipment by up to half, dramatically decreasing the nationwide transportation network, cutting the workforce by as many as 35,000 jobs, and revising service standards for First-Class Mail.
ďFirst-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.Ē
USPS said that the changes would mean that customers will no longer receive mail the day after it was sent. The current mail processing network typically has a piece of mail delivered within a 1-3 window, depending on the location from where it was mailed. With the proposed changes, the new processing standard would be 2-3 days.
ďOur employees continue to do a terrific job for our customers and are among the most dedicated workforce anywhere. These are difficult times and our announcement today does not reflect on their commitment to service,Ē added Donahoe.
U.S. Postal Service