Postal Service closing mail sorting centers

Friday, February 24th, 2012 By

A van of the USPS

The United States Postal Service is closing mail sorting centers and could lay off up to 35,000 workers. Photo Credit: JosephBalliari/Wikimedia Commons/CC-BY-SA

Financial woes at the United States Postal Service are forcing the agency to make cuts. Aside from closing post offices, the agency is also closing more than 200 mail sorting centers and could lay off up to 35,000 people.

Mounting debts

The United States Postal Service is currently engaged in a desperate attempt to save itself amid enormous fiscal losses that the agency continues to incur. The USPS posted a loss of $5.1 billion for the 2011 fiscal year, according to CNN, and further losses of $3.3 billion for the most recent fiscal quarter.

The reason is both the decreasing amount of mail that people send via post, which has plummeted in the last decade, and also the mandatory payment of $5 billion per year into the health care fund for retired postal workers. Of the $3.3 billion loss posted in the most recent quarter, $3.1 billion was in payments to said fund.

[It would take a lot of no fax payday loans to cover a gap that big]

In order to shore up the agency and to avoid $18 billion in losses by 2015, the agency is looking to consolidate itself and save $20 billion by that time instead, according to NPR.

Mail centers to close

The USPS has proposed that at least 223 mail sorting centers be shuttered this year. The agency studied 264 facilities to determine which of them could close with minimal fallout, finding that only 35 were indispensable. There are six still under review. According to Businessweek, 26 mail sorting plants have already closed since September and since 2005, the USPS has closed 214 mail sorting centers.

The closings are estimated to save the USPS an estimated $2.5 billion per year. Unfortunately, the closures also mean the loss of a significant number of jobs. It’s projected that sorting center closures will result in 35,000 people losing their jobs and a significant number of people transitioning to other positions in the same area, or being relocated. All told, the 461 mail sorting centers the USPS currently in operation employ 150,000 people, according to CNN, meaning a 20 percent reduction in its mail sorting workforce.

Service cuts likely

Among other proposals to save the postal service like restructuring its obligations to the retired worker health care fund are service reductions, which are all but assured. Most likely is canceling Saturday delivery and longer delivery times for first-class mail. In addition, according to NPR, up to 3,700 post offices are closing.

The agency is also proposing to raise the price of first-class stamps by 5 cents, according to NPR. Whether the reduction of sorting centers will impact the speed of mail delivery remains to be seen. According to CBS, the closures will begin in May.

Sources

CNN

NPR

Businessweek

CNN: http://money.cnn.com/2012/02/09/news/economy/postal_service_loss/index.htm?iid=EL

CBS: http://www.cbsnews.com/8301-505245_162-57384536/postal-service-moves-forward-with-vermont-closing/

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