WASHINGTON -- The financially troubled U.S. Postal Service said Thursday that it may close more than 250 mail-processing facilities nationwide and plans to reduce service standards for first-class mail in an effort to cut costs.
The steps are part of a broad retrenchment for the agency, which lost $8.5 billion last year and is facing more red ink this year as the Internet siphons off lucrative first-class mail and the stagnant economy holds down the growth of advertising mail. Over the last five years, mail volume has declined by more than 43 billion items.
"We are radically realigning the way we process and deliver the mail," Postmaster General Patrick Donahoe said. "With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic."
Postal officials said 252 of the agency's 487 mail-processing facilities will be reviewed over the next three months for possible closure. That's in addition to about 3,700 local post offices being reviewed for closure. Closing the mail-processing facilities could affect 35,000 workers.
In addition, the agency said it plans to change first-class mail delivery from one to three days, depending on distance, to two to three days. That would mean that mailers could no longer expect next-day delivery in their communities.
Officials said that that could affect commercial mailers but that individual customers are not likely to notice the change. Officials promised to work with businesses to help solve any problems the change might cause.
The closings and service changes could save the Postal Service as much as $3 billion annually and are part of an effort to reduce annual costs by $6.5 billion. Other savings are being sought through requests to Congress to allow elimination of mail delivery on Saturdays and change or eliminate an annual $5.5 billion payment the agency is required to make into a fund to cover future retiree medical benefits. Last year the Postal Service had revenue of $67 billion and expenses of $75 billion.
"Cutting costs is essential to saving the Postal Service and the 8 million private-sector workers whose jobs rely on it," said Art Sackler, coordinator of the Coalition for a 21st Century Postal Service, an industry trade group.
"The coalition welcomes this important step and looks forward to the details. But what's needed even more are fundamental reforms only Congress can make."