Post Office To Close 2,000 Branches
NEW YORK (CNNMoney) -- The money-losing U.S. Postal Service is planning to shut down thousands of stations and branches to try and ward off its fiscal woes.
The Postal Service has set a goal of closing 2,000 stations and branches in 2011, said Postal Service spokeswoman Joanne Veto. That's in addition to the 491 closures that are already underway, she said.
The Postal Service is not planning to close any post offices, she said, noting that the law prevents the closure of post offices for solely economic reasons. She described stations and branches as being smaller than post offices, with no mail processing, and sometimes no mail carriers.
Mail volume, the main source of income for the Postal Service, has plunged in tandem with the recession. Not only is it competing with the Internet as a means of communication, but businesses have been spending less money to send out advertisements, a form of mail that is not-so-affectionately known as junk mail.
The Postal Service suffered a net loss of $8.5 billion in fiscal year 2010, which ended Sept. 30. That's compared to a loss of $3.8 billion the prior year. The Postal Service delivered about 171 billion pieces of mail in fiscal year 2010, compared to 177 billion the prior year, costing about $1 billion in lost revenue.
"We have post offices that have fewer than five transactions a day," said Veto.
U.S. Postal Service spokeswoman Sue Brennan said that deliveries by the Postal Service have declined by 43 billion pieces in the last five years.
"We have nearly 32,000 post offices and only 19% cover their costs" said Brennan.
The Postal Service said locations will be closed based on a variety of factors, including finances, proximity to post offices, and availability of post office boxes and stores that sell stamps.
The Postal Service didn't identify specific stations and branches slated for closure. The Wall Street Journal reported on Monday the post office's plans to close 2,000 facilities.
Other attempts by the Postal Service to alleviate financial pressure, like adding a rate hike or scaling back to five-day mail, have been shot down by regulators or lawmakers.
Even though it's a federal agency, the Postal Service has not received any taxpayer funding since the early 1980s, when it was phased into an independent, self-sufficient financial entity.
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