The US Postal Service yesterday announced a modified plan to consolidate its network of 461mail-processing locations, with almost half set to close in two phases over the next three years,
while also revealing plans to loosen the next-day delivery obligations of its First-Class Mailservice, although union representatives urged members and politicians to fight the changes.The first phase of the restructuring will result in up to 140 “consolidations” by February2013, with “a second and final phase” of 89 consolidations currently scheduled to begin in February2014 – “unless the circumstances of the Postal Service change in the interim”. In February, thePostal Service announced it had approved 233 facilities for consolidation, with decisions stillpending on six.
Patrick Donahoe, Postmaster General and Chief Executive Officer, said: “We revised ournetwork consolidation timeline to provide a longer planning schedule for our customers, employeesand other stakeholders, and to enable a more methodical and measured implementation. Our currentplan meets our cost-reduction goals, ensures seamless and excellent service performance throughoutthe implementation period, and provides adequate time for our customers to adapt to our networkchanges.”
USPS said the first phase of consolidation activities would reduce the size of the PostalService workforce by approximately 13,000 employees and, when fully implemented, would generatecost reductions of approximately $1.2 billion (€944 million) annually.
Donahoe insisted that the company no longer had the mail volumes to justify the size andcapacity of its current mail-processing network. “To return to long-term profitability andfinancial stability while keeping mail affordable, we must match our network to the anticipatedworkload,” he added.
USPS will begin the consolidation process this summer at 48 locations – which mostly involvestransferring mail-processing operations from smaller to larger facilities. Due to the volume ofhigh-priority mail predicted for the election and holiday mailing seasons, no consolidatingactivities will be conducted from September to December 2012. Approximately 5,000 employees willbegin receiving notifications next week related to “consolidating and other efficiency-enhancingactivities” to be conducted this summer, USPS said.
Megan Brennan, USPS’s Chief Operating Officer, said: “As a result, nearly all consolidatingactivities in 2012 will occur in August and then will resume again the early part of next year. ThePostal Service will be communicating with our customers and employees about these changes in greatdetail. We will work closely with our customers to ensure there are no surprises as we moveforward.”
USPS also announced that it would soon issue a new regulation to modify its existing ServiceStandard for overnight delivery. The Postal Service said a Final Rule would soon be published inthe Federal Register that would initially shrink the geographic reach of overnight service to localareas and enable consolidation activity in 2013. The new rule would further tighten the overnightdelivery standard in 2014 and enable further consolidation of the Postal Service mail-processingnetwork, in the absence of any change to the circumstances of the Postal Service.
“We are essentially preserving overnight delivery for First-Class Mail through the end of2013, although we are collapsing the distance that we can provide overnight service to thedistribution area served by a particular mail-processing facility,” said Brennan. She saidapproximately 80 per cent of First-Class Mail would still be delivered overnight.
USPS said it expected to pursue the second phase of consolidation activities for theadditional 89 mail processing locations beginning in 2014 unless its circumstances change. “Theseconsolidations would be based on long-term service standards that would significantly revisemail-entry times for customers seeking overnight delivery,” the company said.
Donahoe added: “Given that the Postal Service is currently projecting a $14 billion net lossin FY2012, and continuing annual losses of this magnitude, we simply cannot justify maintaining ourcurrent mail processing footprint.”
When fully implemented in late 2014, the Postal Service expects its network consolidations togenerate approximately $2.1 billion in annual cost reductions, and lead to total workforcereduction up to 28,000 employees.
The Postal Service also announced that it is working with its unions for an employeeretirement incentive, although no final decision has been made. “The Postal Service has reduced thesize of its workforce by 244,000 career employees since 2000 without resorting to layoffs,” saidBrennan. “We are a responsible employer and we will work with our employees to ensure a smoothtransition to a much leaner organisation.”
In response, the American Postal Workers Union (APWU) described the modified consolidationplan as “more of the same”, and urged union members to “fight back” and for Congress act urgentlyto block the plan.
APWU said the “new” plan “employs the same essential strategy as the old plan: Impose drasticcuts to service and the mail-processing network, and eliminate tens of thousands of jobs”. The onlydifference is that the “new” plan will take a little longer to complete, it added.
APWU President Cliff Guffey said: “This is essentially the same plan management proposed lastfall – it will reduce the mail-processing network by half. The Postal Service’s announcementprovides new evidence that union members must contact their US representatives and urge them toaddress postal reform immediately, using the recently approved Senate bill as a starting point fordiscussion. Slashing the postal network will destroy service, drive away customers, and weaken theUSPS.”
Guffey said the situation was urgent. “We are asking local union leaders to arrange meetingswith their US representatives during the Memorial Day recess, which begins 21 May. We are urgingrank-and-file union members to attend as well. It is imperative that as many union members aspossible are involved.”
Guffey also criticised the moves by USPS to proceed with plans “to degrade service standards,with an interim change effective this summer and more drastic reductions in service in 2013”. Headded: “Postal officials seem to be ignoring the wishes of numerous members of Congress who askedthe USPS to postpone consolidations until after postal reform legislation is enacted. And they areproceeding without the benefit of an advisory opinion from the Postal Regulatory Commission, whichis required by law.
“Postal managers are also disregarding evidence that was revealed during commission hearings:reducing service standards will drive away customers.” Guffey said that during the proceedings, thePostal Service had admitted that a secret study indicated that revenue losses could virtually wipeout projected savings from consolidations if service standards were reduced.
“We will not stand by while postal managers destroy the USPS,” Guffey said. “We will joinwith the American people and elected officials to stop them.”
