Outbound Mail: USPS Targets Thousands of Branches for Closure
costar.com ^ | July 29, 2009 | Mark Heschmeyer
Posted on Sunday, August 02, 2009 1:50:20 PM by Vince Ferrer
Bedroom communities across the country have been reading and hearing similar headlines in the last few weeks:
Leawood post office will close in September -- Kansas City Star
USPS moving operations out of Winchester -- WHSV in Winchester, VA
Univ. of Oregon could lose post office branch -- KVAL in Eugene, OR
Black Eagle residents upset over post office plans -- KXMB in Bismarck, ND
USPS will shutter Freehold Borough facility -- Colts Neck News in Freehold, NJ
The news of U.S. Postal Service (USPS) closures has been trickling out in local communities. But a closer examination behind the reports finds the potential for a major flood of closings. The Postal Service sent a notice to American Postal Workers Union executives this summer that it was considering consolidation options in every major metro market in the country and would consider closing 3,243 of its 4,851 largest branches and centers in the review process. The markets have been identified, the exact locations have not - although the USPS has already stamped almost one-fourth of the ones it has studied as disposable, according to postal union officials. The review process was to last most of the summer (or more if Congress gets involved, and you know they will) but they want the consolidation to occur by October 2010.
According to USPS records, it owns 8,546 facilities totaling 219.6 million square feet and leases another 25,272 locations totaling 912.2 million square feet. Many, if not most, of those locations are counters in various retail locations occupying less than 1,000 square feet. The consolidations the USPS are studying are for larger locations of a few thousand to tens of thousands of square feet - most of it leased.
For example in Central New Jersey, the area that includes Freehold, the USPS leases 159 locations totaling 565,000 square feet. However, 34 of those locations are of less than 1,000 square feet, some of which is storage space or rooftop antenna space. The other leased locations average 4,447 square feet, with the largest leased space being 47,000 square feet.
Using that as a base, the USPS could be studying the consolidation of more than 14 million square feet of retail/office/industrial space across the country. To put that in perspective, 14 million square feet would be the equivalent of about all of the vacant retail space in a market such as Boston or Cleveland or Denver or the Inland Empire or Tampa.
"Many factors including impact on employees, service standards, cost savings, customer access, environmental impact, real estate values, and long-term needs of the service would be taken into account during the reviews," the USPS notice to the union said.
The Postal Service cited dramatic decreases in mail volume and the USPS' extremely challenging financial circumstances as the cause of the study. "Like mail volume, window transactions at our retail units have substantially declined," the letter noted.
The effort to consolidate operations at stations and branches "could include possible termination of leases and/or movement of operations from Postal Service-owned facilities… Until the process is initiated and the reviews are completed, we will not know which leases or owned facilities, if any, will be terminated or sold, or the impact on employees."
By law, after the USPS closes a facility in a rented space, it clears out its property and terminates its lease. In the case of owned facilities, after the USPS shutters a property it is to dispose of the excess real property under terms and conditions that provide the greatest value to the Postal Service. Disposition could be by sale, exchange, outlease, sublease, or other means.
The bigger issue for the union, of course, is the potential impact on Postal Service workers. "As a consequence, employees working in those retail/delivery facilities may be reassigned to other retail/delivery units, and/or other facilities, or other duties in accordance with the relevant provisions of the applicable collective bargaining agreements," the notice said. Or they could just simply be laid off.
The Postal Service has been profoundly impacted by the turbulent economy. Weakness and failures in the financial, credit, insurance and housing industries, all extremely heavy senders of mail, resulted in a mail volume decline of more than 9 billion pieces in 2008. Mail volumes for single-piece First-Class Mail declined to a level not seen since 1964. As the recession has expanded, volume has continued to decline. This has caused a significant shortfall in revenue, contributing to a loss of nearly $3 billion last year.
Last year, USPS cut 50 million workhours; halted construction of new postal facilities; instituted a nationwide hiring freeze; reduced authorized staffing levels at postal headquarters and area offices by at least 15%; and sold unused and under-utilized postal facilities.
This past spring, it announced plans to close six of its 80 district offices, eliminate positions across the country and offer early retirement opportunities to 150,000 employees nationwide. These actions were expected to save the Postal Service more than $100 million annually.
At a meeting in late last month, the Postal Service briefed American Postal Workers Union officers about the latest initiatives to consolidate operations in large stations and branches. At the briefing, postal officials said that among the stations under review, 740 already had been identified as candidates for consolidation and/or closing but did not identify them, according to union officials.
USPS officials conceded that among the reasons for closing stations and branches is that there are fewer "procedural requirements" for closing stations and branches than for small post offices. They also said that 34% of current postal revenue comes through alternative access, and that they are striving to increase that percentage.
In May, the U.S. Government Accountability Office (GAO) issued a report en titled "U.S. Postal Service - Network Rightsizing Needed to Help Keep USPS Financially Viable." The GAO study criticized the USPS for failing to take the necessary steps to remain viable, such as "rightsizing its retail and mail processing networks by consolidating operations and closing unnecessary facilities," and "reducing the size of its workforce."
"The USPS has substantial excess capacity in its mail processing network," the report said. "In the Postal Accountability and Enhancement Act of 2006, Congress recognized USPS has more facilities than it needs, and strongly encouraged streamlining its networks."
The report concluded that "USPS can streamline its retail network while improving access by closing unnecessary retail facilities and promoting lower-cost alternatives such as purchasing stamps by mail, telephone, and the Internet, as well as carrier pickup of packages."
"Opportunities to reduce retail facilities are particularly evident in urban and suburban areas, where USPS retail locations are close to one another, customers have more options, and facilities are expensive to operate and maintain," the audit found.
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Do you really want the govt running health care like this?
