Crunch time at US Postal Service: Five questions about post office closings.
Among the thousands of post offices under review for closure is a cramped branch in downtown Elmira, N.Y., bustling on a rainy summer afternoon. It was, until recently, a place retiree Charlotte Dumas took for granted. She visits the downtown branch about three times a week. "I would hate to see it close," she says. "It's so convenient."
And it's a bargain. The United States Postal Service (USPS) delivers an average of 563 million pieces of mail a day, six days a week. For a 44-cent stamp, you can send a letter to the far reaches of the nation. Rain, sleet, and manic dogs don't stop the service, which carries mail by pack mule to the Havasupai Indian reservation at the bottom of the Grand Canyon and operates branches in towns of fewer than 100 residents.
Too good to be true? It might soon be. To help close a $20 billion revenue shortfall by 2015, the USPS may be forced to shutter as many as 3,700 post offices nationwide.
1. Why is the USPS considering these closures?
Starting in 2000, the growing popularity of e-mail and electronic bill payments sent mail volume plummeting. In just the past five years, the Postal Service's annual volume declined by 43.1 billion pieces, says Sue Brennan, a USPS spokeswoman. It is the main factor behind a $5.6 billion fall in annual revenues from 2006 to 2010.
Add to that the hefty personnel bills of the country's second-largest civilian employer after Wal-Mart – wages and benefits for its 571,566 full-time employees account for 80 percent of the Postal Service's operating budget, compared with 61 percent of UPS's and 43 percent of FedEx's – and it's clear why the Postal Service is nearly $15 billion in debt.
"Reduced mail volume, coupled with the burden of prefunding retiree health benefits, has created enormous financial pressures on this organization," says Ms. Brennan.
After determining that about 80 percent of its branches lose money, the Postal Service has proposed shuttering thousands of underperforming sites across the country. The closures are one of a number of tactics it is considering – including dropping Saturday delivery and cutting 120,000 jobs – to close its budget gap.
"Our customers' habits have changed. Our business model has changed. We've had to adjust," says Karen Mazurkiewicz, the USPS's Western New York communications coordinator. "This is one of many ways we're looking at to be efficient, be viable, keep costs down."