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USPS to Resume Closures of Mail-Processing Facilities

The USPS will resume its consolidation of mail processing centers after Phase 1 saw the closure of 141 mail processing facilities in 2012 – 2013. The only positive for online merchants – Phase 2 will begin after the 2014 holiday shopping season.

PostalNews.com noted that 82 more postal facilities will close as Phase 2 commences in January 2015, which is scheduled to be completed by the fall mailing season.

A blog for postal workers, the Postal Reporter, published the National Postal Mail Handlers union’s communication to members, and it took a dim view of the news of more closures.

The USPS told union workers the changes were expected to generate $750 million in annual savings. “Some affected career employees may be reassigned to other vacant positions.” The agency said the previous consolidations had generated annualized cost savings of approximately $865 million.

The USPS also notified large customers of its plans to resume the rationalization of its network of mail processing facilities that began in 2012. In explaining why, it told customers in its June 30th announcement:

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Over the past three years, the Postal Service recorded financial losses of $26 billion. The Postal Service receives no tax-payer funds to pay for operating costs and derives all of its revenues from the sale of our products and services, and continues to face significant financial challenges associated with the decline of First-Class Mail volume and revenue, wage and benefit inflation, increasing operating costs, as well as legislative mandates and significant debt pressures. Moreover, the uncertainty regarding legislative reform and review of postal rates in the courts continues to delay needed capital investments to acquire package sorting equipment and replace an aging mail delivery fleet.

We believe strongly that this phase of network rationalization will establish the low-cost, technology-centric delivery platform necessary to serve the mailing and shipping industry for decades to come. We look forward to discussing our specific plans for our network in the coming weeks.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.