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Postal Service to close dozens of mail centers

The U.S. Postal Service said this week that it would begin shuttering dozens of mail processing centers next year, a move it said was necessary because of congressional inaction on postal reform.

The USPS, which has lost more than $28 billion since the start of fiscal 2011, says that a new round of processing consolidation centers will save the agency roughly $750 million a year.

According to the plan released Monday, the agency will consolidate as many as 82 facilities starting in January, a process it says will be completed in time for the 2015 holiday season.

That’s on top of the 141 centers that have been shuttered over the last couple of years, which the agency says has already produced $865 million a year in savings.

Postmaster General Patrick Donahoe and other postal officials have long said that the agency was saddled with too many processing centers, given the dramatic drop in first-class mail volume in recent years.

At the same time, the USPS is also shipping an ever-growing number of packages, due in large part to the rise in online shopping.

The agency says the newest round of consolidations won’t lead to any layoffs, with a spokesman insisting that “every effort will be made” to find new jobs for employees at the shuttered processing facilities and that the agency will continue to rely on retirements to pare down its workforce.

In a release, the agency also made clear that the congressional negotiations over revamping the Postal Service — which have gone on for years without a breakthrough — played a role in their decision to move forward with the consolidations, as did its efforts to increase stamp prices.

“The uncertainty regarding legislative reform and review of postal rates in the courts continues to delay needed capital investments in network operations and undermine the future financial viability of the Postal Service,” the agency said in the release.

The USPS has turned to a number of cost-cutting measures in recent years, including shortening hours at certain local post offices.

But Congress would need to strike a deal on some of the most contentious issues when it comes to the Postal Service’s future, including Saturday delivery and the agency’s required prepayments for future retirees’ healthcare.

Postal unions were quick to criticize the consolidations, which will lead to delays in mail delivery that labor groups say will reduce confidence in the postal system.

“This is a direct assault on service to the people of the country, on postal workers and on the Postal Service’s own network,” said Mark Dimondstein, the president of the American Postal Workers Union.

“We need a Postmaster General who will champion the Postal Service,” he added, insisting that ”Donahoe is on a rampage to destroy it.”

Historically, many lawmakers, especially Democrats, have also been cool to the idea of closing mail processing centers, given the lost jobs and slower delivery times.

Senate Homeland Security Committee Chairman Tom Carper (D-Del.), one of the key lawmakers working on postal reform, said it was no surprise that the USPS moved ahead with the consolidations, given the problems congressional negotiators are having.

But Carper also warned the agency that customers around the country already believe the Postal Service is falling short when it comes to delivering the mail. 

“Closing more mail processing centers will only make these existing problems worse and hurt the Postal Service’s efforts to generate new mail volume and remain competitive in the growing package delivery market,” Carper said in a statement. 

Post's franchise plan sparks pay cut fears

Hundreds of workers could face drastic pay cuts under New Zealand Post's new franchising model.

Last month NZ Post announced it would close the Mana, Thorndon and Karori Post Shops and franchise postal services to private businesses.

The announcements came as NZ Post tries to cope with the decline of postage - in the 2012-13 financial year, 63 million fewer items were posted than the year before, a 7.5 per cent reduction. The drop-off during 2013-14 is expected to be even higher.

In Wellington and Hawke's Bay, NZ Post has closed or will soon close shops in Thorndon, Karori, Mana, Wainuiomata, Raumati Beach and Flaxmere. It says a total of 25 will be closed nationwide.

The Thorndon and Karori PostShop closures will put 12 jobs and popular services at risk. Six staff work in each shop and may not be employed by NZ Post after the move.

Up to 2000 workers, from posties to management and backroom staff, could lose their jobs as the state-owned agency moves to reduce property costs amid a decline in traditional mail delivery caused largely by the rise of internet- based transactions.

Spokesman Richard Trow said NZ Post was "committed to having 880 points of presence in the community".

Most of the PostShop services would still be available inside other businesses, such as FourSquare or PaperPlus, which already happened at 136 sites nationwide, he said.

NZ Post called the process "substitution", and said there would be no loss of "points of presence" in Wellington and Hawke's Bay.

The Engineering, Printing and Manufacturing Union (EPMU), which represents 3500 postal workers, said overseas experience showed workers could face pay cuts of up to 30 per cent by moving to a franchise.

The initial closure of 25 stores would affect about 160 workers, and union national industry organiser for communications Joe Gallagher said it was a challenging time as the union worked with NZ Post to understand the implications of the change.

"It's particularly difficult for employees who've been working for 25 to 30 years when the Government keeps talking about a rock star economy, but these people face a 30 per cent pay cut, which is a concern for us," Gallagher said.

NZ Post store network general manager John Andrews said: "We can't guarantee what a third-party employer pays its employees. Our focus at the moment is supporting our staff through these changes."

Porirua Mayor Nick Leggett and Mana MP Kris Faafoi have been outspoken in opposition to the closure of the Mana store, as has Grey Power.

Last month Faafoi's office received more than 800 replies to a survey the MP sent out when he heard the PostShop was to be downscaled and services shifted from its premises at 99 Mana Esplanade.

More than 95 per cent wanted Mana PostShop to stay as it was, Faafoi said.

Grey Power central zone representative Peter Matcham said that, as long as services remained through franchises, it was not necessarily of great concern. However, if it led to a loss of services from the community - both postal and Kiwibank - it would be a different ballgame.

If the postal service was to be run as a commercial operation, it had to react to changing times.

"It's fair to say the people Grey Power represent are higher users of the postal service in general. It's not necessarily because they aren't au fait with computers, just that that is how they've always done it."

Former NZ Post boss Elmar Toime said the new model was part of an overseas trend towards private shops running postal services, and there was "less and less need" to have formal post offices. Toime, a former executive deputy chairman of Britain's Royal Mail, said he was confident NZ Post would come through the transformation.

- The Dominion Post