Hold everything, folks. That’s the recent message from the U.S. Postal Service on phase two of its network consolidation plan and associated changes to service standards. The Postal Service has delayed the second phase, which was set to take effect this month.
Between Fiscal Years 2004 and 2011, the U.S. Postal Service implemented over 100 area mail processing (AMP) consolidations, reducing the number of mail processing facilities from 676 to 461. Following implementation of an AMP, the Postal Service completes a post-implementation review (PIR) — a two-step documented process that tells management whether or not an AMP achieved the anticipated results. The PIR compares pre- and post-consolidation data, including projected savings, costs, workhours, and levels of service.
According to the Postal Service, greater use of electronic communication continues to drive customers away from using First-Class Mail®. Instead of buying stamps, many customers pay bills online, send ‘e-invitations’ to friends and family, and simply press “Send” when they want to communicate. These shifting customer habits will continue to speed the migration away from traditional First-Class Mail. According to the Postal Service, First-Class Mail has dropped 25 percent and single-piece First-Class Mail – letters bearing postal stamps – has declined 36 percent in the past 5 years.
The U.S. Postal Service owns or leases more than 33,000 facilities with approximately 284 million interior square feet (SF). These facilities are in virtually every community throughout the country and range in size from 55 SF to 32 acres under one roof. We visited 717 of these facilities as part of 10 facility optimization audits and identified over 21 million excess SF of space. During our subsequent national facility optimization audit, we statistically projected that the Postal Service has about 67 million SF of excess space nationwide.
Despite financial challenges resulting from declining mail volumes and current economic conditions, the Postal Service is continually driving efficiency by making better use of space, staffing, equipment, and transportation in processing mail. One key element of improving efficiency is consolidating mail processing operations, which is an ongoing effort.
Since fiscal year 2009, the Postal Service has completed 47 consolidations and has an additional 107 consolidations in progress for proposed savings of approximately $255 million.