U.S. Postal Service Considers Closing Facilities, Slowing First Class Mail

The U.S. Postal Service may never be the same, with First Class delivery service expected to slow down amid proposed cuts. Saturday home delivery could end.

The latest plan from the post office, gripped with slowing business and costs and nearing default, would likely alter the delivery time of First Class mail. By closing more than half the agency's 487 mail-processing facilities in a plan announced Thursday, the U.S. Postal Service would eliminate 35,000 positions and slow First Class delivery.

We simply need fewer facilities to process less mail, Megan Brennan, said chief operating officer of the Postal Service.

The postal service has experienced fast decline in First Class mail due to the Internet, as more people use e-mail and online bill pay instead. In the last five years, for example, First Class mail volume has dropped 25 percent. Single-piece first class mail -- letters and such sent with a stamp -- has declined 50 percent in the past decade.

The financially beleaguered post office is expected to lose nearly $10 billion this year and Postmaster General Patrick Donahoe has been lobbying Congress for approval to reduce the agency's overhead.

Among the latest considerations for cost-cutting measures is shutting down as many as 250 mail processing facilities, cutting mail processing equipment in half and reducing the agency's national transportation network. The move will likely result in longer delivery times for First Class mail, officials say.

First-Class mail supports the organization and drives network requirements, (but) with the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic, Postmaster General Patrick Donahoe said in a statement.

The postal service plans to file a request for changes to current mail service standards including First Class delivery times with the Postal Regulatory Commission this fall. Already, the postal service is weighing the closing of 3,700 locations. The agency is nearing financial default, expected to miss a payment due the federal government for future employee benefits on Sept. 30.

When Congress returned from recess on Sept. 6, Donahoe met with a Congressional committee looking into problems facing the agency -- which some have said could be forced to close by early next year if drastic measures aren't taken.

President Obama's administration has said it will seek to save the postal service from embarrassing default by getting an extra three months on the Sept. 30 $5.5 billion payment while lawmakers try to find ways to save the agency.