The cash-strapped U.S. Postal Service will consolidate its network of 461 mail processing locations in a two-phased plan.
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The first phase will occur in July and August in about 48 locations, and then from September through December, no consolidation activity is planned. Consolidations will resume in January 2013 at an additional 92 locations, while the total number of consolidations through February 2013 will reach 140.
USPS officials said that a second phase will begin in February 2014 and will include an additional 89 locations, unless circumstances change in the interim. Service standards also will be changed in two phases, with some changes to overnight service standard areas in 2012 and additional changes for 2014.
When fully implemented in late 2014, USPS officials expect network consolidations will generate about $2.1 billion in annual cost reductions coupled with a reductions of as many as 28,000 employees. Closing mail processing facilities had been scheduled to begin this month.
“We revised our network consolidation timeline to provide a longer planning schedule for our customers, employees and other stakeholders, and to enable a more methodical and measured implementation,” Postmaster General Patrick R. Donahoe said in a release.
USPS officials said the consolidations set to begin in July will largely involve transferring mail processing operations from smaller to larger facilities. They are working with its unions on an employee retirement incentive, although no final decision has been made.
Don Landis, vice president of postal affairs for printer Arandell Corp., said he has mixed feelings about the phased-in approach to consolidation.
“On one hand I would like to see the USPS take immediate steps to rid themselves of excess capacity,” Landis said. “On the other hand, I believe taking on such a monumental fast track task would result in confusion and chaos within the mailing community. So maybe a slower approach, even though I believe it has a lot to do with politics, might work out better in the long run.”
Jim Tierney ([email protected]) is a senior writer for Multichannel Merchant. You can connect with him on Twitter (TierneyMCM) and LinkedIn, or call him at 203-358-4265.