Facing serious financial insolvency, the U.S. Postal Service (USPS) is primed to move forward with historical cuts to first-class mail delivery in the spring of 2012 that will certainly delay delivery. For the first time in 40 years, this will eliminate the chance for locally sent mail to delivered on a “next day” basis to surrounding communities.
Additional cuts running well into the billions of dollars are to be detailed later this week. The Postal Service has spearheaded a “Hail Mary” approach in order to immediately trim costs, something that should have been done a very long time ago. It is further expected that these catastrophic cuts will be a considerable plus to rival and competitor overnight delivery companies such as Federal Express and UPS.
While this “last ditch effort” is past sorely and desperately needed, it can impact the larger and more financially troubled states such as California where the population continues to hover at 37 million residents.
The proposed changes will only provide short term relief, and could ultimately prove to be detrimental to the job market by forcing more of America’s business onto the internet. For instance, personal checks and mail order drug prescriptions for the sick and elderly will be delayed. Additionally, newspaper existance will be threatened, Netflix deliveries and time sensitive magazine delivery will suffer, especially to those living in the more rural areas and farming communities across the country.
The massive cuts that are now in the process of finalization, would close about 250 of the 500 mail processing centers across our nation as early as March of 2012. Because the consolidations will typically lenghten the distance mail travels from the post office to the processing centers, the postal agency will also will also lower delivery standards for first-class mail that have been in place since 1971.
Currently, about 42 percent of first class mail is delivered the following day. (except Sunday) Roughly 27 percent arrives in two days, 31 percent in three days and less that 1 percent in four to five days. Additional cuts are also finally being considered such as reducing mail delivery to five days per week and trimming employee health care benefits. Already approved is a .01 cent increase to .45 cents per first-class postage stamp effective January 22, 2012.
The Postal business model has been operating in serious red ink since 2006 as this system has been crying out for change management. Contrary to the thoughts of many, the United States Postal System (USPS) is not funded and supported by the U.S. Government. The USPS does not receive tax revenue, but is subject to congressional control on the larger aspects of its operations. For instance, the changes in first-class mail delivery can indeed commence without permission from Congress.
The consolidation of the aforementioned mail processing centers is in addition to closing some 3,700 local post offices throughout the USA. In grand summation, the strong possibility exists that 100,000+ postal workers could lose their jobs by the spring of next year.
It has been estimated that these changes will result in an annualized savings of $6.5 billion for a business that has been grossly mismanaged for a prolonged period of time.
Contributing Source: America Online