Wed, Dec 07, 2011 - Page 7 News List

US to have slower, pricier mail

REDUNDANT:The independent government agency faces a default this month on a payment to the Treasury and it is expected to lose more than US$14bn next year

AP, Washington

A US Postal Service worker makes deliveries in San Francisco, California, on Monday.

Photo: AFP

Already mocked by some as “snail mail,” first-class US mail will slow even more by next spring under plans by the cash-strapped US Postal Service to lay off nearly 30,000 workers.

More than half of the US mail processing centers would be eliminated as the post office struggles to respond to a shift to online communication and bill payments.

The cuts are part of US$3 billion in reductions aimed at helping the agency avert bankruptcy next year. They would virtually eliminate the chance for stamped letters to arrive the next day, a change in first-class delivery standards that have been in place since 1971.

Many Americans will be upset.

“The post office is a mainstay of America and the fact that these services will no longer be available is absolutely crazy,” Carol Braxton of Naperville, Illinois, said as she waited in line at a mail sorting center on Monday with the holiday shipping season picking up steam.

At a news briefing in Washington, postal vice president David Williams said the post office needs to move quickly to cut costs as it seeks to stem five years of red ink amid steadily declining mail volume. After hitting 98 billion in 2006, first-class mail volume is now at less than 78 billion. It is projected to drop by roughly half by 2020.

The agency already has announced a US$0.01 increase in first-class mail to US$0.45 beginning on Jan. 22.

Williams said in certain narrow situations first-class mail might still be delivered the next day — if, for example, newspapers, magazines or other bulk mailers are able to meet new, tighter deadlines and drop off shipments directly at the processing centers that remain open.

However, in the vast majority of cases, everyday users of first-class mail will see delays. The changes could slow everything from check payments to Netflix’s DVDs-by-mail, add costs to mail-order prescription drugs and even threaten the existence of newspapers and time-sensitive magazines delivered by postal carrier to far-flung suburban and rural communities.

The Postal Service faces imminent default — this month — on a US$5.5 billion annual payment to the US Department of the Treasury for retiree health benefits and expects to have a record loss of US$14.1 billion next year.

The cuts would close 252 of the US’ 461 mail processing centers beginning next spring. They would result in the elimination of roughly 28,000 jobs. The number of employees varies by processing facility, but generally ranges from about 50 to 2,000. Cincinnati, Boston and New Orleans are home to some of the largest centers.

Separate bills that have passed the US House of Representatives and Senate committees would give the Postal Service more authority and liquidity to stave off immediate bankruptcy. However, prospects are somewhat dim for final congressional action on those bills anytime soon, especially if the measures are seen in an election year as promoting layoffs and cuts to neighborhood post offices.

The Postal Service, an independent agency of the US government, does not receive tax money, but is subject to congressional control on major aspects of its operations. The changes in first-class mail delivery could go into place without permission from the US Congress.

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