Cash-Starved Postal Service May Close More Branches

Postal service delivers bad news for millions of customers.

December 10, 2009, 3:57 PM

March 2, 2010 — -- The U.S. Postal Service, responding to a severe revenue shortfall, announced a comprehensive turnaround plan today that may mean a new wave of branch closures on top of 162 already being considered, higher prices and service cutbacks.

The plan, which includes a proposed rate hike in 2011 and a move from six-day-a-week delivery to five-day delivery, aims to help the U.S.P.S. address a $238 billion projected shortfall over the next decade -- a decline caused in large part by plummeting mail volumes. Parts of the plan require congressional approval.

Postmaster General John E. Potter said at a press conference today that "in an ideal world" everyone would access U.S.P.S. services online through their home computers.

"Being locked in to brick-and-mortar is not healthy situation," he said.

The postal service is also seeking to partner with the private sector to expand the number of post office locations in businesses such as grocery stores and pharmacies.

That move, U.S.P.S. Chief Financial Officer Joseph Corbett said in an interview, would "improve customer service" by providing consumers with access to postal services at more convenient locations with longer hours.

But it would also mean that the post office would shutter some existing locations. It's unclear how many post offices would face closure, Corbett said, but the move is projected to save the U.S.P.S. some $10 billion.

In the meantime, no decisions have been made yet on the 162 postal locations that could face closure in the near-term, Corbett said. (Click here to see the U.S.P.S.'s list.) The closure decisions, the U.S.P.S. has said, will be based on factors such as delivery volumes per location and proximity to other post offices.

In a statement released today, the postal service said that closures would be in places that "would be the least disruptive for (U.S.P.S.) customers."

Cutting to Survive

The postal service, which does not receive tax revenue, has no choice but to continue to cut costs, Rick Geddes, an associate professor at Cornell University and the author of "Saving the Mail: How to Solve the Problems of the U.S. Postal Service," recently told

"If the U.S.P.S. does not cut costs in the face of declining demand, its demise will simply be accelerated," Geddes wrote in an e-mail.

"It is notable," he added, "that the alternative is a taxpayer bailout, which is something that I think should be avoided at all cost."

With reports from ABC News' Gregory Simmons.

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