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3,700 post offices may close, ‘village’ mail service to launch in stores

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WASHINGTON - With email and social media connecting people in seconds, the U.S. Postal Service is changing the way it operates.

The Postal Service said Tuesday it will review nearly 3,700 post offices for possible closure and start a new retail strategy that involves partnering with small businesses.

“We are going to be making significant changes in the way our customers interact with the Postal Service,” Postmaster General Patrick Donahoe said.

Donahoe said the Postal Service must cut $20 billion from its operating budget by 2015.

“We are losing revenue as we speak,” Donahoe said.

The post offices under review were selected based on their effectiveness, including foot traffic and revenue. Some of these offices average less than $50 a day in revenue and have less than two hours of work.

“Customers and revenue are declining rapidly at these locations,” Dean Granholm, vice president of delivery and post office operations, said.

Granholm said that just because the locations were under review does not guarantee they will be closed. The review will take four to six months. Some locations may be consolidated with others nearby, while in rural areas, mail carriers would provide more services out of their trucks.

Granholm said4,000 to 4,500 employees, mostly postmasters, could lose their jobs. Of that, 500 are managers or supervisors and up 1,000 are clerks.

“Cutting post offices is not the solution to the problem,” Sally Davidow, spokeswoman for the American Postal Workers Union, said. The union represents 220,000 postal clerks, maintenance workers and other employees.

She said a “ridiculous legislative requirement” is forcing the Postal Service to prepay the health benefits of future retirees. “This is a problem Congress created, and Congress needs to fix it,” Davidow said.

The Postal Service also plans to partner with small businesses to provide “Village Post Offices.”

These offices would provide customers with frequently used services such as collection boxes, post office boxes and prepaid Priority Mail Flat Rate boxes and envelopes.

Granholm said that these locations offer “expanded access” for customers because stores are open late and on weekends. People who want to ship larger packages that are not prepaid or that require more specialized shipping would still need to visit a post office.

The Village Post Office will “work with small businesses in locations where they feel we can support their needs, and the customers have demand above and beyond our Post Offices,” Granholm said.

Village Post Offices will be staffed by the small business.

Donahoe said this move allows the Post Office to better serve customers and contribute revenue to small businesses weathering the economic downturn by increasing foot traffic and generating more sales.

“It gives some of these small businesses the opportunity to stay open and stay vibrant in the community,” Donahoe said.

The Postal Service will announce the first wave of Village Post Offices in the fall and 2,500 within a year. It is encouraging businesses to inquire on a website, Granholm said.

Mail volume has declined by 43.1 billion pieces in the past five years, and retail transactions at its 32,000 retail facilities are down $2 billion, according to the Postal Service website. That is more retail locations than Wal-Mart, Starbucks, McDonalds and United Parcel Service combined, Granholm said.

Fredric Rolando, president of the National Association of Letter Carriers, said in a  statement that the Postal Service’s payments to pre-fund these benefits, $21 billion since 2007, are “the difference between a positive and negative ledger at the Postal Service.”

The union represents nearly 300,000 employees who deliver mail to homes and businesses.

He said Congress should allow the Postal Service to use a surplus from its pension plan to  prepay retiree benefits rather than forcing it to use its operating funds.

This would leave pensions and retiree health benefits fully funded well into the future, while putting the USPS budget back on sound financial footing,” he said.

Reach reporter Jorge Valens at shws4@shns.com or 202-326-9871

SHFWire stories are free to any news organization that gives the reporter a byline and credits the SHFWire.

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