September 15, 2011 — Today, the US Postal Service released its plan to right-size its mail processing network. The Service is beginning a study to potentially close over 50 percent of its mail processing facilities. A detailed explanation of the plan and the list of facilities being studied for potential closure and consolidation can be found on the Service’s website by clicking here.
“Postal Service customers can no longer afford to pay for excess capacity through postage,” said Jerry Cerasale, DMA’s senior vice president, government affairs. “The current mail processing network has a capacity of over 250 billion pieces of mail per year when mail volume is now 160 billion pieces of mail. Right-sizing the network is vital to the future of the Postal Service and its customers. The Service is providing opportunities for mailer input, and we encourage every mailer to study the plan and respond to it.”
David Williams, VP, Network Operations Management, USPS, will present the plan at a DMA webinar Tuesday, Sept. 20 at 2:30 pm. To register for this important webinar, please click here. Williams will also be presenting the plan and responding to members’ questions at DMA2011 in Boston, Massachusetts. That conference session will be held on Monday, Oct. 3, at 2:30 pm in room 162B of the Boston Convention Center. Please take advantage of these opportunities. For more information on DMA2011, please click here.
The full text of the US Postal Service’s press release follows below.
Postal Service Faces New Reality
Proposes Comprehensive Changes to Nationwide Infrastructure
WASHINGTON — Faced with a massive nationwide infrastructure that is no longer financially sustainable, the US Postal Service today proposed sweeping changes designed to save the organization up to $3 billion a year by cutting its network of processing facilities by over half and adjusting service standards.
Proposals under consideration include studying nearly 250 processing facilities for possible consolidation or closure, reducing mail processing equipment by as much as 50 percent, dramatically decreasing the nationwide transportation network, adjusting the workforce size by as many as 35,000 positions, and revising service standards for First-Class Mail.
“We are forced to face a new reality today,” said Postmaster General Patrick Donahoe. “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 5 years and is continuing to decline. First-Class Mail has dropped 25 percent and single piece First-Class Mail — letters bearing postage stamps — has declined 36 percent in the same timeframe, and nearly 50 percent 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.
“Our employees continue to do a terrific job for our customers and are among the most dedicated workforce anywhere. These are difficult times and our announcement today does not reflect on their commitment to service,” added Donahoe.
An Advance Notice of Rulemaking pertaining to the proposed overnight service standard changes was submitted to the Federal Register earlier today. A copy of the submission can be found at the URL below. The Postal Service intends to file with the Postal Regulatory Commission this fall.
The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.
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An electronic news kit containing the list of processing facilities being studied, the advance notice submitted to the Federal Register, today’s news conference presentation, FAQs, and additional information including mail processing b-roll, video and audio soundbites and JPEG images can be found at http://about.usps.com/news/electronic-press-kits/our-future-network/welcome.htm.