U.S. Postal Service to hold off closing plants

February 4, 2014

By Tonda F. Rush

NNA CEO and General Counsel

WASHINGTON—The U.S. Postal Service announced in January it would not immediately pursue another round of mail processing plant closings.

Postmaster General Patrick Donahoe told the Mailers Technical Advisory Committee he has decided to hold off on more cuts in service and he will give the industry at least 90 days notice before starting the next round.

USPS had been on schedule to pursue Phase II of its so-called Network Rationalization plans in February. Phase I closed 143 mail processing plants in the past two years. Donahoe did not cite a reason for the decision, but Postal Service finances are doing slightly better this year, showing a slim $400 million net earnings for the fiscal year so far. A 12 percent increase in package delivery volume contributed to the improvement.

New recognition of a problem created by the previous closings may be an additional reason, however. USPS is now spending heavily on letter carrier overtime on Mondays. Many carriers are still on their routes after dark. A carrier in Maryland was killed last fall, causing outcry from the USPS workforce, and leading to a re-examination of the Monday workload.

USPS plans to slow delivery of certain standard mail by March, in an attempt to push some Monday mail into Tuesdays. A new “load-leveling” initiative, pending at the Postal Regulatory Commission, is geared at allowing some Standard Mail entered at Sectional Center Facilities (SCF) on Fridays to spill over into Monday delivery.

NNA Postal Committee Chair Max Heath said his committee’s preliminary analysis indicates newspaper shoppers and Total Market Coverage publications will not be affected by load-leveling.

“Although there are a lot of newspapers that like Monday delivery for their shoppers, according to our research, virtually all of them are entered at post offices or delivery units and not at SCFs,” Heath said. “It does not appear we will be affected by this change. On the contrary, we might gain a little mailbox visibility because there will be less Standard Mail coming into the local delivery areas on Monday. If this provision helps to get carriers off dark streets and saves USPS some overtime cost, NNA has no reason to oppose it. However, we are going to be watching to see whether any surprises spring up from this initiative.”


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