The U.S. Postal Service announced Monday that it will close 2,000 locations in 2011. Because a law forbids post office closings to cut budgets, the Postal Service said the closures would technically only affect rural stations and branches. For years, Postal Service losses have totaled billions of dollars, and cost cutting has failed to stymie the red ink.
The Postal Service struggles for relevance
With nearly 500 postal closings under way, the Postal Service has set a goal to close a total of 2,000 this year. The Postal Service is required by law to provide an equal measure of service to every corner of the U.S. But the agency lost a record $8.5 billion in fiscal year 2010. The Postal Regulatory Commission rejected a request to increase postage rates last fall. The Postal Service cited the recession and Internet competition in the request, but the commission said the agency’s problems were from poor management and waste. About one-third of Postal Service employees have been cut since 1999. To cut costs, dropping Saturday delivery and closing smaller postal locations are on the table.
Searching for postal increase alternatives
With 2,000 postal locations in line for the chopping block in 2011, The Postal Service is re-evaluating another 16,000. This number represents 50 percent of the post offices in the U.S. that are running at a deficit. The agency is also lobbying Congress to change the law that only allows post office closings due to maintenance problems or expired leases, not because they’re money pits. After being snubbed on a postage increase, the Postal Service is trying to convince politicians that its vast network of 32,000 locations is outmoded. Most of the facilities were built decades ago, long before e-mail, FedEx and the United Parcel Service.
End of the postal era
The Postal Service depends on mail volume to survive. In recent years the art of letter writing has died, people pay their bills online and businesses spend a fraction of what they did just a few years ago to send out junk mail. Closing brick and mortar facilities is a last resort that has small towns and the politicians who represent them crying foul. They argue that the Postal Service should quit spending so much money on employee benefits before their town’s sole remaining physical link to the outside world is shuttered.