Post Office Aims to Save Billions With Reductions in Workforce, Delivery Time

The U.S. Postal Service, having lost 29 percent of its first-class mail volume in the last decade, will slow its delivery service beginning next spring -- the first time in 40 years -- in an effort to eliminate nearly $3 billion in costs for the cash-strapped agency.

"We have to do this in order for the Postal Service to become financially viable," said David E. Williams, vice president of network operations for USPS, who noted Monday that the organization expects to have a $14 billion debt this year.

"We are adjusting operational realities to the current market," he said, adding that the trend is toward another 47 percent drop in volume between now and 2020.

In 2010, the Postal Service processed and delivered 78 billion pieces of first-class mail, but the coming changes are intended at quickly trimming costs and averting bankruptcy.

The reduction in turnaround time could slow everything from check payments to Netflix's DVDs-by-mail, add costs to mail-order prescription drugs, and threaten the existence of newspapers and time-sensitive magazines delivered by postal carrier to far-flung suburban and rural communities.

That birthday card mailed first-class to Mom also could arrive a day or two late, if people don't plan ahead.

Williams said that instead of having a 6 to 6 1/2-hour operating window, it will expand to 16-20 hours in order to reduce the pieces of equipment needed in the network. As a result, the Postal Service will lose 252 of the 461 mail processing centers across the country and 28,000 jobs will be cut by the end of 2012.

Williams said the changes are not surprises. The Postal Service announced in September that it was looking to make the cuts, which need to go in the Federal Register for a comment period so they can be instituted as early as March.

"It's a potentially major change, but I don't think consumers are focused on it and it won't register until the service goes away," said Jim Corridore, analyst with S&P Capital IQ, who tracks the shipping industry. "Over time, to the extent the customer service experience gets worse, it will only increase the shift away from mail to alternatives. There's almost nothing you can't do online that you can do by mail."

The Postal Service already has announced a 1-cent increase in first-class mail to 45 cents beginning Jan. 22.

Read more: http://www.foxnews.com/politics/2011/12/05/eliminating-next-day-service-on-tap-to-save-billions-for-usps/#ixzz1fh4DthCC