Outlook bleak for United States Postal Service

Makenzie Mason | Lariat Photographer
Post offices across the United States, like the one in Waco, are facing an uncertain future.

By Ade Adesanya

Post offices in the greater Waco area may be shut down as the U.S. Postal Service plans to close as many as 2,000 post offices around the United States beginning in March.

An additional 16,000 post offices are under review for shutdown according to a report by the Wall Street Journal on Jan. 24.

According to the Postal Service’s 2010 annual report, 1,100 routes were canceled last year to manage transportation costs and to increase operational efficiency.

The postal service in Waco is staying focused on customers amid concerns that employees will lose jobs from the recent strategic changes made by the postal service.

“I can tell you that we are not worried about the postal service offices in Waco getting shutdown,” David Sanderson, Waco postmaster, said. “People who come here do so because they work nearby and we also have customers who come from neighboring towns to use the postal services in Waco.”

According to the 2010 U.S. Postal Service annual report, mail volume gradually decreased over the last three years due to increasing use of e-mail and the recession.

Major competition for the Postal Service comes from such package delivery companies as FedEx and UPS Inc.

These privately owned package delivery companies carry less operating costs than the Postal Service, which has to tackle high costs stemming from retiree benefits, frequency of mail delivery and lack of workforce flexibility. In Waco, two UPS stores handle package delivery and copy services.

“We can ship anything of any size; we are trying to focus on mailboxes, our document service and freight. If shipments are unable to go through the UPS ground shipment, it can go through the UPS freight system,” Jordan Gandy, UPS Inc. store manager for Waco, said.

Some customers from the greater Waco area who once patronized the postal service now visit the UPS stores in the Waco vicinity.

“We see customers come to us from the Postal Service for various reasons, but in general our business has grown and our sales have grown consistently over the last two years.

Our document services have grown faster than our shipping services,” Gandy said.

While the general outlook appears bleak for the postal service, the private package delivery companies focus on a customer-centered business strategy where a variety of services is at the core of their business strategy.

“We have a positive outlook in 2011 and we continue to look for ways to meet our customers’ needs,” Gandy said.

The Postal Service is cutting costs after the third straight year of reporting losses totaling over $15 billion.

According to the 2010 annual report, labor hours were reduced by 75 million hours, about 6 percent less than 2009.

“As you know, the Postal Service has serious financial problems,” Sam Bolen, the U.S. Postal Service regional public relations officer, said. “While I cannot give you an exact timeline for the shutdowns, it will be February or March before I will have a specific list of the locations at risk.”

Several solutions were proposed to minimize the losses, ranging from consolidating the Postal Service’s operations by having Postal Service employees run additional routes, to reducing the number of post office buildings around the country. These cuts are attempts to reduce costs and curb three consecutive years of spiraling losses; the Postal Service operated at a net loss of $8.51 billion in 2010.

The possible shutdowns could mean the loss of half the post offices in the country.

These losses and cutbacks signal adverse future economic conditions since the Postal Service is the largest employer of civilians in the United States, second to Wal-Mart Stores Inc.