USPS: Reducing costs to sustain affordable mail service

March 6, 2012

By Timothy J. Vierling, District Manager
USPS Fort Worth District 

America needs a financially-stable Postal Service to best adapt to a changing marketplace and evolving mail needs. Toward that end, the Postal Service is taking responsible actions to preserve the long-term affordability of mail and return this organization to financial stability.
The Postal Service is pursuing a significant consolidation of its national network of mail processing facilities — reducing the total number of facilities from 461 to less than 200 by the end of 2013.    
Declining mail volumes and a rising percentage of fixed costs dictate that we take this bold action to preserve and protect the world’s leading Postal Service for our customers and our employees. From 1940 to 2006, the Postal Service oversaw a continuous expansion of processing and retail facilities to meet the growing demand for mail delivery. This expanded capacity was built to handle high volumes of mail as was the case in 2006 when volumes peaked to 213 billion pieces of mail for processing and delivery by the Postal Service. In 2011, 168 billion pieces of mail were delivered. In 2020, the Postal Service expects to deliver as few as 130 billion pieces of mail. By any standard, this is a steep percentage decline.
In just the past financial quarter, the Postal Service lost $3.3 billion dollars and is projecting steep losses for the remainder of the year.   
No one is to blame. Times have just changed. So must the Postal Service. The fact is the American public and businesses are relying more on electronic communications. Bills are paid online. Friends and family interact through Facebook and Twitter.
Nevertheless, the demise of the Postal Service is greatly exaggerated. The Postal Service sustains a $900 billion industry that employs more than 8 million people. On any given day, we deliver to more than 151 million locations. And even in a digital world, mail remains a powerful communications, marketing and delivery channel.   
And so, to preserve the affordability of mail and to return the Postal Service to long-term financial stability, the Postal Service is taking the responsible steps of pursuing a realignment of our operational networks. As we do so, we are fully committed to ensuring a seamless transition for our employees and our customers. The realignment is contingent upon the adoption by the Postal Service of a final rule to change delivery service standards. In addition, in December 2011, the Postal Service agreed to impose a moratorium on closing or consolidating post offices and mail processing facilities until May 15, 2012, to give Congress and the Administration the opportunity to enact an alternative plan.
The steps we are taking now will put the Postal Service on a strong financial footing for decades to come.

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