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Post Office Closing and Consolidation
In looking for ways to economize the Postal Service’s operations, the elimination or reorganization of existing operations that have proven to be unprofitable or ineffective must be considered. Unfortunately, current law and USPS procedures make such processes incredibly cumbersome and time-consuming. Required review and appeal procedures can drag out attempts to close small post offices for years, and the consolidation of larger mail processing facilities can take nearly as long. The current processes are heavily weighted toward maintaining the status quo. They essentially preclude any short-term cost savings and result in significant long-term delays of increased efficiency.
Current federal law largely handcuffs the Postal Service when attempting to close or consolidate postal facilities. Under the Postal Reorganization Act of 1970, the USPS is prohibited from closing a small post office based solely on economic factors.
Furthermore, a variety of statutory and regulatory requirements have created a truly Byzantine system, filled with endless study, review and appeals before any final action can be taken. In the end, the entire process can take over two years before a post office is finally closed, regardless of how unprofitable or unnecessary the facility is. A recent study by USPS found several examples of small independent post offices, mostly in rural areas, that are not self-sustaining and are of questionable need. For example, one post office is open only ten hours per week and is based out of the postmaster’s house. It has no post office box customers and makes no deliveries. It brings in only $600 in revenue, but costs nearly $11,000 a year to maintain. Meanwhile, another post office operates only three miles away. In another instance, a post office is located in a coal shed leased by the Postal Service. It, too, is only open ten hours per week. The office collects $1,400 in walk-in revenue, but requires $22,000 a year to keep open. Another post office is located less than four miles away.
Although these are some of the more flagrant examples, these cases illustrate the Postal Service’s current inability to make efficient business decisions regarding its retail outlets. The Postal Service runs into similar difficulties when attempting to close larger facilities as well. The more employees that are involved, the greater the difficulty the USPS has in transferring employees and dealing with other labor and community concerns. Additionally, the Postal Service is required by law to request an advisory opinion from the Postal Rate Commission regarding any change that will impact postal service on a nationwide basis. Although the Commission’s advisory opinion is not binding, this requirement simply represents one more bureaucratic hoop through which the USPS must jump when attempting to streamline operations and make postal services more efficient.
The Postal Service has been operating since 1998 under a self-imposed moratorium prohibiting the closure of any small post offices. However, even without this moratorium, it is unlikely that the USPS would be able to take significant action. Given the central relationship that the local post office plays in the life of many small and rural communities, attempts to close down such facilities often results in vociferous opposition. Additionally, attempts to close larger distribution facilities, which are often major sources of regional employment, run into difficulties from community leaders and the labor unions representing workers who will be displaced. As such, any efforts to close these facilities are likely to prompt some kind of congressional oversight or other political involvement.
In its final report, the President’s Commission on the United States Postal Service (PCUSPS) recognized the political sensitivity of closing small post offices, and stopped short of directly calling for such action. However, the Commission did recommend that Congress scale back its restrictions on closing post offices and urged the Postal Service to be more creative and proactive in working with communities on such issues. Going a step further, the Commission did call openly for the closure of some of USPS’ 446 bulk mail, processing and distribution centers.
While PIA understands and appreciates the Postal Service’s objective of providing universal service, we believe that such service can and must be provided in a more efficient manner. We believe that Congress and the USPS should work to streamline the processes under which unprofitable or unnecessary facilities may be closed. However, PIA recognizes that, given the “hot button” nature of such closures, such reform is likely not viable politically. As an alternative, we support a proposal found in a measure currently before Congress. S. 1285 by Senator Thomas Carper (D-DE) would create a commission similar to the military’s Commission on Base Realignment and Closure (BRAC). The 12-member Postal Network Optimization Commission (PNOC) would conduct hearings and take testimony before drawing up a list of facilities to be closed. The list would then go to Congress, which would not be able to make amendments and would have to vote the list up or down in its entirety. This proposal was endorsed by the PCUSPS and PIA believes that this solution would be an effective way to “depoliticize” the closure process and make closing and consolidation of postal facilities a viable step on the road to reform.