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The U.S. Postal Service made waves with its announcement earlier this week that it was putting roughly 3,700 retail locations under review, signaling its plans for widespread closures.

But when combined with the locations that are already under review or have recently been shuttered, the actual number of affected stores is closer to 4,400, according to the Postal Regulatory Commission, an independent agency that oversees the Postal Service.

"To the best of our ability to figure it, there are already another 700 in play from before this filing," PRC Chairman Ruth Goldway told EcommerceBytes. "Some of those 700 have already been closed. Many have been noticed for closure."

Wednesday evening, the Postal Service filed its request for an advisory opinion on the review process and potential closures for 3,653 locations. But the additional 700 facilities were identified through a separate process at the Postal Service that stemmed from an aggressive initiative developed over roughly the past year to trim retail operations as the organization struggles to stabilize its financial situation. In the second quarter of the fiscal year, the period from Jan. 1 to March 31, the Postal Service reported a net loss of $2.2 billion, up from $1.6 billion in the same period last fiscal year.

Taken together, the potential closings could reduce the total number of retail locations the Postal Service maintains by up to nearly 14 percent.

As a matter of bureaucratic process, the Postal Service is treating the 3,653 retail locations differently than the 700 stores that Goldway estimated are on their way out. Two weeks ago, the Postal Service published its final rules that reformed its process for closing locations. The new rules will entail a more formal review process and greater efforts to notify customers who will be affected by the closures.

"The 700 have been reviewed in what you might call a bottom-up process," Goldway said. "It was done in the field, not in a comprehensive way." She noted that USPS' recent activities amount to a significant acceleration in its efforts to trim its retail locations, explaining that the Postal Service has identified "many more of them in the last year-and-a-half or year than ever before."

By contrast, this week's announcement of a review process, which will be undertaken in accordance with the new closure rules, is a far more cohesive - and sweeping - plan.

That's been enough to get the PRC involved. While the agency has specific regulatory authority over postal issues such as rate increases, its mandate does not permit it to preemptively block the Postal Service from closing specific retail locations. But the USPS is required to notify the agency of any proposed nationwide change in service, such as its efforts to scale down to a five-day weekly delivery schedule.

"They've been indicating to us for several months now that they were going to develop a comprehensive plan to bring to us," Goldway said of the potential closings. But as the year wore on, reports of individual locations closing surfaced in the press, and the PRC began to receive complaints from postal customers and appeals protesting the closures.

Concerned that the Postal Service might be moving ahead to implement its review and closure plan unilaterally, Goldway sent a letter dated June 8 to Postmaster General Patrick Donahoe asking the organization to submit a request for an advisory opinion, a process that entails an agency review of a USPS proposal.

The recommendations that the PRC produces as an advisory opinion are just that - an opinion, not a binding regulation. At the same time, the PRC's opinions can carry influence on Capitol Hill, and the agency can intervene if it finds that the Postal Service has abrogated its statutory responsibilities, such as its universal service obligation.

A spokesperson for the Postal Service did not return a call seeking comment for this report, but the organization has committed to the PRC that it will not close any of the 3,653 locations under review before Jan. 1, 2012.

Having only received the full report from the Postal Service Wednesday night, Goldway said she is withholding judgment on the proposal, though she acknowledged that she has concerns just looking over the list of retail locations that are under review.

"It seems to me that there is a very heavy impact in rural America," she said. "It's not clear how fair this distribution is in terms of its reach across America."

Additionally, she worries about the Postal Service's plan to transition more locations to so-called Village Post Offices, retail outlets that would offer certain postal supplies and services but that would be owned and operated by private businesses. The Village program is essentially a rebranding of a model the Postal Service has been developing for years, under which several thousand retail locations have been in private hands and known as "contract postal units," or CPUs. The Postal Service plans to lean more heavily on privately operated facilities as part of its broad-ranging cost-cutting plan.

But it remains unclear whether all of the private retail locations will offer certain key postal services, such as P.O. boxes. Additionally, in the event of a proposed closure, the operators of private facilities aren't under the same public notification requirements or subject to the appeals process that serves as a check on the Postal Service.

"Our concern is to the extent that they go to CPUs, how will we assure universal service in the future?" Goldway said. "I don't think anyone wants to stop the postal service from becoming more efficient and saving money. It's clear that the digital revolution is well upon us in the postal world. But there's still a large percentage of people who depend on first-class mail."

See Part Two of EcommerceBytes special report on the USPS plan to close thousands of retail offices in Monday's newsletter, "PRC Seeking Comments on Prospective Mass Postal Closings."

About the Author
Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects for more than four years, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here .

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About the author:

Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.

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