It’s baaack.

Network consolidation will return in January 2015, a year after going on hiatus. The U.S. Postal Service announced recently that it would resume consolidations, closing up to 82 mail processing facilities. This second phase of the network consolidations should be done prior to the 2015 fall mailing season.

The Postal Service expects the changes to yield $750 million in annual savings and to affect about 15,000 employees. In 2012 and 2013, the Postal Service consolidated 141 mail processing facilities, resulting in cost savings of about $865 million.

Loyal readers of our blog will recall that the Postal Service put its network consolidation plans on hold in early 2014 while it reconsidered its proposed changes to service standards for First-Class Mail. (See our blog from earlier this year on the delay.) Phase two will affect the service standards for First-Class Mail and Periodicals as well, eliminating the overnight standard for most First-Class Mail. Periodicals service standards would range from 3 days to 9 days, versus the current 2 to 9 days.

The Postal Service says eliminating excess capacity through consolidation is one of the few options it has to cut costs. Consolidation will also allow the Postal Service to establish a “low-cost, technology-centric delivery platform necessary to serve the mailing and shipping industry for decades to come.”

Still, the planned consolidations are likely to rankle some. At least one postal union has already come out strongly against the plan, saying it will degrade service and lead to mail delays. It intends to vigorously fight the closures. On the other hand, industry has generally supported Postal Service efforts to reduce costs and improve efficiencies, as long as service isn’t irreparably harmed.

We welcome your thoughts. Should the Postal Service continue with consolidations given the decline in mail volume and the potential cost savings? Or should the Postal Service first explore ways to use the excess capacity to provide services that might yield additional revenue sources, such as warehousing or other logistics services? 

Comments (167)

  • anon

    I also believe that the US Postal Service must be protected from its competition. The presence of local US Postal Service facilities far and wide benefits our nation in so many ways that transcend postal services and mail delivery. It would be a great loss to local communities, and postal workers, to consolidate the US Postal Service out of the communities that it purports to serve. Postal facilities and real property must remain under the direct control of the USPS and repurposed to serve local communities that provide additional revenue streams back to USPS. About 1987 the US Postal Service proposed local kiosks be installed at all post offices that would give computerized support to its customers by informing them of available postal services and other related federal information that applies to those very same local communities. Now, some post offices have kiosk-esque automated and computerized machines for mailing packages and giving some mailing and shipping information and even postage prices. Even more opportunity exists in these times to do more and go farther with that original USPS idea that offered new functionality and purpose to its facilities that gave a nod and direct support to the local folks who came to use them. Special attention was given to the concept of local consumers getting the information and services that they required at the time, and we should continue to move USPS forward along the same lines of thought. Postal unions would appreciate the idea of retaining manpower in place so that workers remain employed and stable in their employment, but I was thinking more along the lines of the US Postal Service expanding the functionality of its facilities to offer fiber optic Internet to local communities across the country. You can call it a "national fiber reserve" along the lines of our National Petroleum Reserve, in which our nation becomes connected at broadband and beyond. Postal Fiber services would bring in a much-needed Internet access to all communities where the standard Internet providers are slow to expand because they are happy with the revenue they already have, thus disenfranchising local and rural communities from access. America did this before with the electrification project under the US Department of Agriculture in the past century, and the US Postal Service can step in now and work with the National Telecommunications and Information Administration and the Federal Communications Commission to advance America's broadband into the future. There exists worldwide a relationship between postal services and telecommunications which are consolidated under one authority of many foreign governments. In America, we can do this as well. The Postal Fiber initiative would be America's way of serving the most underserved with both postal services and Internet access in accordance with a national broadband plan to serve everyone equally. Such an initiative would spark competition and broaden Internet access as well as draw more revenue for the US Postal Service directly and keep our mail running from the same facilities. I think this idea is workable and it can be done. In light of the current search underway for more ideas to use our postal services and bring in revenue, this one makes a lot of sense.

    Aug 18, 2014
  • anon

    Bravo Raleigh, I had come to the same conclusion years ago now. Article I, Section Eight, of our U.S. Constitution, known as the Postal Clause, specifically authorizes Congress the enumerated power "to establish post offices and post roads." Our modern day postal roads are the right of ways needed to physically transmit information and should be acquired and held in the public trust to run whatever modern information conduits the future brings. Wireless would seemingly obviate the need for a physical conduit, but wireless also relies on a physical backbone, and a physical network of conduit, e.g., fiber optics, is needed for redundancy at the very least, and as a main communication channel that is part of a modern and resilient communication capability. In my hometown we have a public non-profit that runs our Power Utility and is now providing Fiber to the Home (FTTH). We have some of the cheapest electricity in the U.S. and my home is 100% wind powered. Our new fiber network will provide symmetrical (Up and Down) 1Gbps speeds for $49.99/mo for life (more or less if the costs change). This is the model we should employ with the USPS. We could retrain U.S. Postal workers and provide a critical service that is not being met by the for-profit model in the U.S.

    Sep 01, 2015
  • anon

    I know that the post office is having difficulties due to legislative restrictions which prevent it from competing with Ups and others. I think the legislature has it backwards. They need to protect the postal service from its competition.The postal service does better than UPS in informing the customers that they have packages.

    Aug 18, 2014
  • anon

    In lieu of all the cyber hacking of bank and credit card accounts, we're reverting back to paying our bills and shopping by mail. Postal Service is your constitutional right to communications. Imagine someday we suffer a nationwide black out with no access to phones and computers or any other electronic device? HOW WOULD YOU COMMUNICATE THEN? Smoke signals won't work. But the US Postal Service is established to deliver to every business, resident and to al grounds every day of business! Please read this article and vote NO to shutting down more of your postal facilities and service. You don't miss postal good thing until its gone!

    Aug 21, 2014
  • anon

    If there were an event causing the electrical grid to go down, or the internet to fail, most of the mail would not get through very soon. The USPS is totally dependent on computers to sort the mail and without computers it just won't get done. We could still sort by hand, but it would be a very slow process, same with UPS or Fedex! As far as the consolidation plan goes, I work as an electronic tech at the Tulsa P&DC. We are scheduled to move into the OKC P&DC in July. I believe most of the fat has already been cut away and by continuing to consolidate, it will hurt USPS as an organization. I don't see them saving $750 million per year closing 82 plants if they only saved $850 million closing 141 plants, or whatever the numbers are. The management claims there will be no layoffs, just workforce reduction through attrition. Well, they can give incentives to increase attrition with out closing plants and then they can hire the new workers at about half the price, according to the most recent pay charts I have seen.

    Sep 24, 2014
  • anon

    This is such a bad idea. Why ruin something that took so long to create. You will do nothing but RUIN service. STOP YHE CONSOLIDATIONS... As a matter if fact, reopen the closed facilities.

    Aug 20, 2014
  • anon

    Agreed. The consolidations that have already taken affect have hurt the post office already. It's very sad when a letter that was mailed from 5 minutes away takes four to five days to get there. This is a typical thing now.

    Aug 22, 2014
  • anon

    dang right.i do mail searches every day on the dbcs.i find letters that are 4to 9 days after its been postmarked.the mail from the coast of nc is bypassing rocky mount to Raleigh and Greensboro..on heavy days it goes to tenn..9 hours away..saving money no.poor service yes

    Aug 23, 2014
  • anon

    As long as the PMG wants to priveatise the postal service,consolidations is just the start of the end of a, Postal Service that serves the public for less than any other company. Our service will be like every other company slow and unreliable.

    Aug 21, 2014
  • anon

    PMG can't decide for everything because he isn't control entire UPS BUT ONLY through Congressional can give the decision. PMG have no skilled in business management and will hurt UPS business.

    Aug 22, 2014
  • anon

    The problem isn't with competition between UPS and the USPS. The USPS offers the cheapest and faster service hands down with all shippable items when it comes to individual shipments. UPS might have a leg up with business shipping, as it can offer discounts for quantity shipped. However, the real problem that consolidation addresses is the drop in letter volume, which has been the biggest part of what the USPS does - it has a monopoly on that. That part continues to declined big time, so the USPS MUST take steps to adapt. No one I know wants to see consolidation, especially Postal workers, as it affects their livelihood and creates uncertainty, but going throw life without facing immanent problems never ends well.

    Aug 20, 2014
  • anon

    it would be devistating on unemployment(one of largest employers in world), delay of mail would occur. How about addressing pre-funding requirements that NO other entity has to do(pay 75 yrs. in advance within a 10yr time frame) i am not an educated econimist but that just seems unjust. The sanctity of the mails needs to be left alone and not thrown to the "private" wolves. The United States Postal Service is the most trustworthy organization in the world. I only want ONE organization to have access to my mailbox, not several private anybodys at will. Keep mailing those letters. You never know when a total power outsge might happen. I know from experience that the USPS will deliver!

    Aug 25, 2014
  • anon

    That was a very ignorant statement. Mail volume for first class is down slightly but revenue is up. We are making more money on first class then we did the same time last year. Parcel revenue is up. Standard mail revenue is up. Transportation costs are down. The Postal Service is making a profit this year, don't let them say otherwise. Postal management wants a privatized Service because if it is a private corporation then they will make millions more in salary and benefits. It's all a shell game with creative accounting to make it look like the Postal Service is doing so poorly.

    Aug 25, 2014
  • anon

    USPS EAS bosses who think they will be hired for their expertise by a privatized post office are beyond delusional. Such a company would already have most of their operating managers in place, or they would recruit them from the ranks of MBAs, marketing and logistics experts, NOT from G.E.D.Postal EAS slugs who have coasted for for decades on the backs of hard-working Union workers. They are in for a rude awakening.

    Aug 29, 2014
  • anon

    hopefully,people will get tired of seeing all these businesses getting hacked and go back to mailing their bills

    Aug 23, 2014
  • anon

    Consolidation does not address the drop in letter volume, and letter volume is just one part of USPS. With the invention of ordering by internet parcels have become a competitive part of USPS. As stated previously UPS and FedEx rely heavily on USPS to maintain their business. There is no monopoly just reassurance everybody is able to have some form of communication without being robbed, held hostage, denied or prosecuted by some large corporation looking to keep their board of directors and CEO's happy with the bottom line. However you are correct, USPS must take steps to adapt to an ever changing world. You do not down size, but instead build to meet the demands of the ever changing world. You look ahead at problems not down, look at American Airlines. Dumping money continuously into it's CEO's pocket did not resolve there woes, instead it speed things along. I would suggest first you understand what America was built on, then find out what America stands for, and then try business 101. Then and only then may you decipher the difference in propaganda and truth.

    Aug 23, 2014
  • anon

    The first part of your statement is correct, but the second part is incorrect. The USPS is actually doing better than UPS and Fed Ex. I have been a letter carrier for more than 8 yrs. and UPS has been delivering UPS parcels, because UPS lacks the man power and network capabilities to service all its customers. The third part of your statement is correct. Congress needs to proctect USPS!!!!

    Aug 19, 2014

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