Postal Service processing network too big: GAO report

Reuters News
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Posted: Apr 12, 2012 1:44 PM
Postal Service processing network too big: GAO report

By Emily Stephenson

(Reuters) - The Postal Service has more mail-processing facilities, staff and equipment than it needs as mail volumes drop, a government watchdog said in a report calling on Congress to pass legislation that helps the agency address its dire financial situation.

"It is now abundantly clear that the postal business model must be fixed given the dramatic and estimated decline in volume, particularly for First-Class Mail," the Government Accountability Office said in the report published on Thursday.

"If Congress prefers to retain the current delivery service standards and associated network, decisions will be needed about how USPS's costs for providing these services will be paid."

The Postal Service, which does not receive taxpayer money to fund its operations, has grappled with plummeting mail volumes as consumers increasingly send e-mail and pay bills online. High costs, including an annual payment to fund future retiree health benefits, have weighed heavily on its finances.

The agency lost $5.1 billion in fiscal year 2011, and officials say they need to cut annual costs by $20 billion by 2015.

(Reporting By Emily Stephenson; Editing by Philip Barbara)