Postal service plans cutbacks

Published 12:00 am Thursday, May 16, 2002

BNI Newswire

The United States Postal Service announced it had lifted a self-imposed seven-year ban on closing post offices, thanks to a $5 billion mandate by Congress.

In media reports last week, the postal service reported it could lose $1.5 billion in its current fiscal year which ends Sept. 30. The report is a slight improvement over a loss last fiscal year of $1.7 billion.

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The end to the self-imposed moratorium on closing small post offices was announced along with a transformation plan by Postmaster General John Potter earlier in the year. In the report, Potter said the agency would look to close non-performing locations.

"They are looking at small post offices that are close to other, larger facilities," U.S. Rep. Spencer Bachus (R-Ala.) said. "In other words, they are looking to close one of two facilities in places where one would be enough."

Bachus added during the seven-year moratorium, postal officials have studied each and every facility and have an idea of the areas that can be cut.

According to postal figures, mail service is expected to be down by nearly 6 billion letters by the end of September.

That drop, which is the largest loss in nearly 70 years, is primarily because of the Sept. 11 attacks, resulting anthrax scares and a sluggish economy.

The downturn in letter traffic, leads to an estimated $1.5 billion loss – the third straight year the USPS has reported a loss.

On Monday, media outlets reported lawmakers had criticized the postal service for failing to provide a "transparent look" at its financial status, while at the same time asking for the power to raise rates and close facilities. Currently, the postal service has to ask for Congressional approval to close any existing postal facility.