WASHINGTON — The United States Postal Service announced Thursday that it would start consolidating 48 email processing centers starting in July, the initial phase of a cost-cutting plan that’s meant to save the agency almost $1.2 billion per year as it tries to adjust to declining mail volume.
The bureau said it would unite an additional 92 processing centres in February, and 89 more in early 2014.
In all, the Postal Service said it would shut 229 processing centres — roughly half of the total — and it expects to save about $2.1 billion per year after the program is fully completed in 2014. About 13,000 workers will be affected when the first phase is finished by February.
The service’s most current strategy to reduce prices comes as the agency continues to endure financial losses.
A decrease in first-class mail and the development of automated equipment have left the mail processing system bigger than needed, and revenue hasn’t kept up with the cost of maintaining the system, the bureau said.
“We simply don’t have the email volumes to justify the size and capacity of our existing mail processing system,” said Patrick R. Donahoe, the postmaster general. “To return to long-term profitability and financial stability while maintaining mail affordable, we have to match our community to the expected workload.”
Nearly all of the consolidations this season will happen in July and August, and they’ll resume early next year. No consolidations will occur from September through December due to the election and vacation mailing seasons, the bureau said.
The Postal Service also announced that it would shortly issue a new regulation modifications to overnight shipping.
From the 2011 fiscal year, which ended in September, the Postal Service had a mail processing system that comprised 461 facilities, 154,325 full-time workers and about 8,000 pieces of mail processing equipment. But email volume has dropped precipitously over the past couple of decades, to 168 billion bits in 2011 from a high of 213 billion in 2006.
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The agency is thinking of other cost-cutting initiatives, such as moving into a five-day shipping program from six times and reducing compensation and benefits, with the purpose of conserving a total of $22.5 billion by 2016.