Does Federal Law Limit Post Office Consolidation?

The laws of economics say the U.S. Postal Service needs to reduce the number of post offices. But the laws of the United States may say otherwise.

As USPS embarks on a study to determine which of approximately 3,000 large post offices can be eliminated, it is seeking the Postal Regulatory Commission's blessing on the legality of its efforts.

The Postal Service is concerned about running afoul of the law requiring it to “maintain[s] postal facilities of such character and in such locations, that postal patrons throughout the Nation will, consistent with reasonable economies of postal operations, have ready access to essential postal services.” It asked the PRC late Thursday to rule that consolidation of some of the large "stations and branches" (which are mostly in urban and suburban locations) does not violate that clause.

Mail volume is declining, and more than 30% of USPS's retail revenue comes from sources other than transactions at retail post offices, according to the filing. "Yet the vast majority of existing Post Offices, stations and branches were established before the advent of the Internet and other convenient alternative access channels that have proven so popular,"the filing states.

"In many cases, the justification for the establishment of a station or branch at a particular location 20 or 40 or more years ago no longer exists," the USPS request says. "Postal retail stations and branches are not intended to operate as monuments to a bygone era of postal customer interaction."

The study will examine "the feasibility of moving retail units and carrier operations into smaller facilities, as well as the consolidation of both retail and delivery from one location into other nearby retail and delivery units," says Alice M. Vangorder, who heads Customer Service Operations for USPS, in testimony submitted along with the Postal Service's motion. "It is
impossible to predict how many stations and branches ultimately will be subjected to discontinuance."

Though stamp purchases are still the most common type of retail transaction at post offices, she notes that people can buy stamps at nearly 50,000 supermarkets and other private businesses.

The study is just the first step in the Postal Service's plan to conduct "an in-depth examination and reconfiguration of its [entire] retail network," which consists of more than 36,000 locations.

As usual, these efforts to follow the Congressional mandate that USPS break even financially are likely to run into "Not in my district" complaints of various members of Congress.