At a news briefing, Postmaster General Patrick Donahoe said the agency's mail processing network had simply become too big, given declining first-class mail volume and mounting debt. It will now consolidate nearly 250 plants as originally proposed, including 48 this summer, but will stretch out the remainder over a longer time frame in 2013 and 2014.
"To return to long-term profitability and financial stability while keeping mail affordable, we must match our network to the anticipated workload," Donahoe said. Failure to do so, he stressed, would "create a fiscal hole that the Postal Service will not be able to climb out of."
Under the modified approach, up to 140 processing centers will be consolidated by next February _ roughly 48 in August and about 90 next January and February. Closings would be suspended during the Postal Service's busy election and holiday mail season. Another 89 closings would occur in 2014.
The consolidations are initially expected to reduce postal staff by 13,000 and save the struggling mail agency roughly $1.2 billion annually. By the time the full round of cuts is implemented by late 2014, the post office will have 28,000 fewer employees with estimated annual savings of $2.1 billion.
The fact is that the USPS will be totally bankrupt by the end of the year and, despite this, legislators have been intransigent in their opposition. This year, more than half of Democrats in the Senate have announced their opposition to any bill that would result in closures, service cuts or job losses.
In spite of the massive roadblocks in Congress and the urgency of the problem, legislators recently wrote to Postmaster General Patrick Donohoe asking for more time for COngress to get their act together and pass a reform bill.
It's obvious that reform isn't coming from Congress. It's a good thing that Donohoe is moving forward with closing offices across the country. The USPS is a purveyor of a communications medium suited for the 20th century, and it needs to evolve or face complete bankruptcy.
I wrote about USPS reform for the May issue of Townhall Magazine, in which I outlined Donohoe's broader outlines for the agency:
In remarks to Congress in September 2011, Donahoe laid out the short-term plan to get the agency on its way to viability. This included the shuttering of over half of the agency’s 500 processing centers, the elimination of 35,000 Postal Service jobs and a review of 15,000 post offices that could be subject to closing. Donahoe also laid out the desire that the Postal Service have more autonomous control over its mail schedule to cut back on Saturday deliveries and save billions of dollars every year.
There's a long way to go in getting the Post Office to a sustainable structure, but this is a good start.
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