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Postal Service ready to make ‘tough choices’ regarding post offices

- Associated Press - Tuesday, July 26, 2011

Facing an increasingly bleak bottom line, the Postal Service is considering closing more than a tenth of its retail outlets.

The financially troubled agency announced Tuesday that it will study 3,653 local offices, branches and stations for possible closing. But many of those may be replaced by "Village Post Offices" in which postal services are offered in local stores, libraries or government buildings.

"It's no secret that the Postal Service is looking to change the way we do a lot of things," Postmaster General Patrick Donahoe said at a briefing. "We do feel that we are still relevant to the American public and the economy, but we have to make some tough choices."

Currently the post office operates 31,871 retail outlets across the country, down from 38,000 a decade ago, but in recent years business has declined sharply as first-class mail moved to the Internet. In addition, the recession resulted in a decline in advertising mail, and the agency lost $8 billion last year.

Most of the offices that face review are in rural areas and have a low volume of business. As many as 3,000 post offices have only two hours of business a day even though they are open longer, Postal Service vice president Dean Granholm said.

Coming under review doesn't necessarily mean an office will close. The service announced in January that it was reviewing 1,400 offices for closing. So far 280 have been closed and 200 have finished the review process and will remain open.

"Today's announcement is a step in the right direction. There are, however, many difficult decisions ahead that must be made to improve operations, reduce costs, and return the Postal Service to financial solvency," said Rep. Darrell Issa, California Republican and chairman of the House Oversight and Government Reform Committee, which has jurisdiction over the Postal Service.

Sen. Tom Carper, Delaware Democrat who heads the Senate subcommittee that oversees the Postal Service, added that the "announcement underscores the serious nature of the Postal Service's financial situation. — Closing a significant number of post offices that are losing money or are no longer necessary to meet the current demand for Postal Service products and services is a difficult but necessary step in the broader effort to save the Postal Service from total collapse."

Others agreed change is needed.

"This is bitter medicine, but changed times call for a changed Postal Service. With mail volumes declining at a dizzying rate, we need a Postal Service that is leaner, more efficient and less expensive," said Art Sackler, chairman of the Coalition for a 21st Century Postal Service, a mailing industry group.

The vast majority of sales in post offices are stamps, officials said, and that easily can be handled at the new Village Post Offices. In addition, those offices would accept flat-rate packages and some could provide post office boxes. For passports or other more complex services, customers would have to go to a regular post office.

In the past four years, the Postal Service, which does not receive tax funds for its operations, has cut its staff by about 130,000 and reduced costs by $12 billion in an effort to cope with the loss of first-class mail and the decline in advertising mail. For example, about half of all bill payments are made online now, up from 5 percent a decade ago.

Postal officials also have sought permission from Congress to reduce mail delivery to five days a week and to ease the requirement that they pay $5.5 billion annually into a fund to prepay future retiree medical benefits.

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