The U.S. Postal Service has announced that it hopes to save $3 billion annually by closing 250 mail processing facilities and laying off 35,000 employees. The USPS is facing the loss of $8 billion this year, and recently proposed changes that could see its entire workforce reduced by as many as 220,000 employees.
The USPS is also considering such options as reducing mail processing equipment by as much as 50%, dramatically decreasing the nationwide transportation network and revising service standards for First-Class Mail.
“We are forced to face a new reality today,” says Patrick Donahoe, postmaster general. “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. 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.”
Mail volume has declined by more than 43 billion pieces in the past five years and is continuing to decline. First-Class Mail has dropped 25% and single piece First-Class Mail — letters bearing postage stamps — has declined 36% in the same timeframe, and nearly 50% in the past ten years. The decline has created substantial excess capacity within the postal processing network.
The mail processing network itself was constructed to process and deliver First-Class Mail within a 1–3 day window depending on where the mail is sent and delivered. With the proposed change, the new service standard would become 2–3 days, meaning that on average, customers would no longer receive mail the day after it was mailed. If implemented, the change in service standards would allow for significant infrastructure changes to be made across the nation.
The USPS receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.
