Postal Service Changes Will Likely Just Make Slow a Little Slower

Major changes in processing and delivery announced Monday by the U.S. Postal Service are aimed at the bottom line nationally, yet are bound to have effects locally.

But postmasters down at the local level either don't know or aren't saying what those changes might mean for Milwaukee-area residents and businesses.

Postmasters in Brookfield and Sussex said they were not at liberty to talk to the media about the Postal Service's plans and probably wouldn't have anything to say for some time.

The Postal Service is thinking big with cost-saving plans targeting $20 billion by 2015. Closing of up to 252 mail processing plants across the country is part of the plan, along with the end of overnight delivery for first-class mail. Letters — as well as many bills and bill payments — would have a two- to three-day service standard instead.

For many private business owners, any changes, even if they were for improved rather than diminished service, would already be too late.

Dean LePoidevin, owner of LePoidevin Marketing in Brookfield, said his company rarely sends items through the mail; it uses online sources for deliveries instead.

“It doesn’t really affect services with our clients,” LePoidevin said. “The effect would be minimal to the company.”

Slower delivery time for a service already stuck with the "snail mail" tag is probably just a slightly greater inconvenience for most who are still customers, but could have an effect on some small businesses that haven't upgraded to the digital realm of online payments yet still rely on prompt billing.

Blaming it on the Internet

Sean Hargadon, spokesperson for the U.S. Postal Service, said customer habits had changed dramatically with online communication, costing the service business.

“The reason for the drop in revenue is because first-class mail is down, and our model is built on first-class mail,” Hargadon said. “With the Internet, things have changed significantly.”

The Postal Service relies on no funding from tax dollars for operating expenses but rather on sales of products, postage and delivery fees.

In 2011, mail volume declined by 3 billion pieces, a 1.7 percent drop from 2010, according to a press release from the Postal Service.

First-class mail, the Postal Service’s most profitable product, declined 5.8 percent from this year to last, a $2 billion loss.

A decade ago, just 5 percent of people paid bills online. That number has jumped to 60 percent, according to Hargadon.

Regulatory agency has a different view

But Ruth Goldway, chairman of the Postal Regulatory Commission, which has oversight but not complete authority over the Postal Service, said that while online communications certainly have grown, that might not be the reason the Postal Service is unable to stay above water.

“The Internet does have an impact on first-class mail, but that’s not the major cause of the deficit,” Goldway said. “People are still using mail. Packages are growing, and mail can adjust to the niche environment.”

Goldway has a point.

According to the Postal Service, Priority Mail and Express Mail increased by $530 million in 2011, a 6.3 percent increase from last year.

Besides that, the Postal Service saw strong growth in Parcel Select and Parcel Return Services – a beneficial side effect of the Internet because more people are purchasing more products online – and often sending them back.

Standard mail even increased by 2.9 percent, or 2 billion pieces, bringing in $495 million.

So, even though the Internet might have changed the mailing market somewhat, Goldway said other reasons might be to blame for overall losses.

“I think the major reason... doesn’t have to do with the Internet,” Goldway said. “The Postal Service is overly burdened to prepay health care benefits, and to pay for that at a high rate has really drained the Postal Service.”

Hargadon agreed that employee benefits will have to be looked at if the Postal Service is ever to stablize its services. The service “takes good care of their employees,” he said.

Location, location... location?

Of the 252 postal processing centers being studied for closure, only five are in Wisconsin, in Wausau, Portage, La Crosse, Eau Claire and Kenosha.

Hargadon said these locations are only being looked at for the moment and no decisions have been made. The study will most likely be completed in March, he said.

Postal Service employees do not have to worry about their jobs. In accordance with bargaining agreements, the Postal Service will relocate employees if plants close.

From Washington, Goldway said she has received thousands of calls from concerned citizens saying they don’t want local post offices closed.

She said people weren’t worried as much with the change in delivery standards and did not care if mail delivery slowed a bit.

Hargadon agreed and said most costumers would not even notice a difference in delivery.

But Goldway said that, with the changes not fully determined , she was weary of how quick the Postal Service was acting to announce its proposals.

The PRC will look at the changes and studies the Postal Service is proposing and will give an advisory opinion based on reports, testimony and public opinion, she said.

“They are so busy trying to cut, they don’t take a look at alternatives,” Goldway said.