U.S. Postal Service to Close 3700 Offices This Year

The U.S. Postal Service (USPS) announced today a list of nearly 3,700 retail offices to be studied and potentially closed as early as November and replaced by new Village Post Offices in an effort to compensate for losses.

Following an announcement made in January that thousands of branches will be closed to make up for a new loss of $8.5 billion in 2010, the USPS "will be taking the next step in right-sizing its expansive retail network by conducting studies of approximately 3,700 retail offices to determine customer needs," as stated in a press release.

Given the rising cost of postage and increase usage of the Internet for communication purposes, Postmaster General Patrick Donahoe said, "Our customer's habits have made it clear that they no longer require a physical post office to conduct most of their postal business."

According to Donahoe, more than 35 percent of revenue, derived from the sale of postage, products and services, comes from other sources rather than post offices themselves. Trends show that many people go to grocery stores, retail chains, kiosks and USPS.com for postal services.

Some post offices have drastically decreased in foot traffic and revenue, sometimes amounting to less than $50 per day. Also, many employees of the USPS average about only 2 hours of work per day. As stores begin to close, layoffs will occur, omitting the jobs of about 3,000 postmasters, 500 supervisors and 500 to 1,000 office clerks.

As an option for communities affected by the closings, the Postal Service will introduce a retail replacement option called Village Post Offices to be run by contracted local businesses, like pharmacies and grocery stores.

These Village Post Offices would conduct typical business, like flat-rate package mailing and selling stamps, and provide "easier, more convenient access to our products and services when and where our customers want them" while helping small businesses nationwide, Donahoe said. However, expedited mail, certified mail and shipping of oversized packages will not be included in Village Post Office services.

With about 32,000 post offices in the country, the USPS is the largest retail network in the country. Since more and more people utilize the Internet for postal services, Post Offices could virtually disappear in the near-future.

"The Postal Service of the future will be smaller, leaner and more competitive and it will continue to drive commerce, serve communities and deliver value," Donahoe said.

With over 200 locations placed on the list to be studied, Texas and Pennsylvania will potentially suffer the most with the largest amount of soon-to-be closed postal offices. California, New York and Ohio have about 100 branches each on the list.

Donahoe said the closings of these branches could total up $200 million, and other proposed cutbacks, like limiting services to five days per week, could close a $20 billion gap by 2015, according to CNN.

Nearly 300 locations have already been closed and many offices have already been suspended, according to the USPS. The first round of closings is scheduled to take place in January, but can happen as early as November.