Thousands of Post Offices Face Budget Ax

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The Postal Regulatory Commission, which oversees the Postal Service, has suggested that the USPS will release a list Tuesday of 3,653 post offices it will consider shuttering, according to a number of media outlets. A message on the commission's website from Chairman Ruth Y. Goldway read, in part: "The Postal Service has indicated that it intends soon to file a request for an Advisory Opinion on a nationwide plan to review post office facilities for closure."
UPDATE, 12:30 p.m.: Around midday Tuesday, the USPS formally announced its proposal to examine about 3,700 of its 32,000 post offices for closure. The Postal Service also proposed a retail-replacement option for affected communities.

In the press release, Postmaster General Patrick Donahoe said: "Today, more than 35 percent of the Postal Service's retail revenue comes from expanded access locations such as grocery stores, drug stores, office supply stores, retail chains, self-service kiosks, ATMs and, open 24/7. Our customers' habits have made it clear that they no longer require a physical post office to conduct most of their postal business."
In the last reported quarter, the USPS lost more than $2.2 billion, and it expects to run out of money in September -- hence, the possible closures. Most of the post offices at risk are in rural areas, which makes sense. Rural post offices are expensive relative to the number of people they serve, and rural delivery routes are longer because of the number of homes and businesses which must be served in sparsely populated areas.

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The Postal Regulatory Commission has been wrestling with the painful idea of reducing universal postal service, something that has been part of American life for decades. The USPS has prided itself on its ability to get mail to all of its customers, six days a week, regardless of location or difficulty. "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds" is not the Postal Service's official motto, but it might as well be in the eyes of the public

The commission has considered several ways to cut costs. One is to eliminate Saturday delivery. Another is to close some post offices.

Some measure of cost cutting at the Postal Service is almost inevitable. The federal government is unlikely to underwrite $10 billion in losses per year, particularly as Congress and the White House work to reduce the overall federal budget deficit, in many cases through austerity measures. The Postal Service is about to get smaller, and it probably should: Many of the functions it once dominated have been undermined by faxes, online data transfer and e-mail, and overnight services provided by UPS (UPS) and Fedex (FDX), among others.

The only issue is where the cuts will fall -- and how deep they'll be.

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