In light of being trapped in the most severe financial crisis it has ever faced, the United States Postal Service has continued to find ways to downsize its expansive
Seeking public feedback on the proposed retail unit closings and consolidations at 12 Chicago District locations, the agency held a series of town hall meetings this month.
The meetings were part of a process that began three months ago, after the agency announced it could no longer financially maintain its 32,000 retail offices. The U.S. Postal Service began to conduct nationwide studies of at least 3,700 post offices, stations and branches for potential cuts to alleviate its debt.
USPS state spokesman Mark Reynolds said the meetings were created to put into context the data that drove the original study list. He said the post offices chosen to be studied were selected only on the basis of revenue and traffic numbers.
“[We] didn’t consider the particulars of each neighborhood.” Reynolds said. “It was just a first pass at it and it wasn’t meant as the be all [and] end all, It was up to each individual district to go talk to the public and see how they feel about the service, so we could find out what kind of things we need to consider when going forward in making final recommendations.”
The USPS held its last of eight public meetings at the Haymarket Post Office, 433 W. Harrison St., on Oct. 25.
Karen Schenck, Chicago’s district manager of the USPS, led the discussion and focused on the current financial state of the service, explaining the importance of the studies and the need for action.
According to Schenck, annual mail volume has declined by more than 43 billion pieces in the past five years and continues to decline. She said total first-class mail has dropped 25 percent, while single piece first-class mail—letters with postage stamps—has declined 36 percent in the same time frame.
This poses a problem for the agency because the post office’s biggest revenue comes from stamp sales.
“Since 2006, the [service’s] mail volume has dropped 20 percent, resulting in a historically large deficit,” Schenck said. “Because of the volume loss, postal services are not receiving sufficient revenue to sustain the cost of mail processing and delivery.”
For the fifth consecutive time, the U.S. Postal Service experienced a $4.5 billion loss in its 2011 fiscal year. By law, the agency is allotted a cumulative borrowing limit of
$15 billion. However, it has already reached the limit, with money still needed.
“Hopefully Congress can agree to a plan for long-term stability, but right now $5.5 million is still due by the beginning of November,” Schenck said. “That’s how bad our finances are, but the Postal Service has been trying to do the best with this financial crisis.”
While the USPS is faced with financial burdens, Schenck said the decreased revenue is due to the use of modern technology and the economic recession.
“The financial crisis is challenging at best, and the projections of the future are bleak,” she said. “It’s not a case of whether or not mail revenue will decline. It’s a case of how much it will decline.”
Reynolds agreed with Schenck and said first-class mail has been diverted to electronic forms of communication, while at the same time the economic recession has forced people to rethink how they send and use mail.
“Those two combinations have really driven down the volume [during] the past couple of years,” Reynolds said. “And frankly, we don’t see that trend improving, even once the economy improves.”
However, despite the USPS’ financial rut, possible solutions have been developed to save the agency.
“We’ve consolidated administration offices and reduced staff both at the national headquarters and in the field offices,” Schenck said. “We’ve also sold unused and underused facilities, and we’ll continue to reduce our costs wherever we can.”
While 12 city post office locations are at stake, the USPS plans to introduce the Village Post Office as a replacement option. According to Don Nichols, the Chicago District Post Office operations manager, Village Post Offices would be operated by local businesses, such as grocery stores and other smaller retailers that would offer popular postal products like stamps and flat-rate packaging.
“There are several things that could happen from the possible outcomes of the study,” Nichols said. “First and foremost, we can do nothing. We can complete the study and make recommendations and not follow up, or secondly, we can plan closings and consolidations to save money.”
The studies are expected to be completed early next year, and Schenck said no final decisions have been made, but if a study concludes that an office is to be closed or consolidated, there will be a public notification period before any final action is taken.