In the past seven days, the U.S. Postal Service has announced it is considering the closing or downsizing of seven distribution centers as it steps up efforts to shrink its mail-processing network.
The latest announcements mean that more than 15% of the country's approximately 260 processing and distribution centers are the subject of Area Mail Processing studies, which can lead to work being shifted to facilities in other cities. While the media pay attention to the recent announcement that 2,000 small post offices might close, the less publicized AMPS process could be equally significant for the USPS's workforce, cost savings, and customers.
Last month, the Postal Service decided to shift mail processing from Houston to the North Houston, Texas facility, eliminating about 335 positions and saving $32 million annually. Even the more moderate move of outgoing mail from Cape Cod, MA to Brockton, MA meant 17 positions and nearly $2 million in annual savings.
The Government Accounting Office urged the Postal Service last year to accelerate the closure of excess mail-processing facilities. noting that the pace of closures had slowed to less than one per year.
The seven newest AMP studies involve August, GA; Bronx, NY; Champaign, IL; Frederick, MD; Gainesville, FL; Portsmouth, NH; and Wareham, MA. Frederick and Portsmouth have already stopped handling originating mail; the new AMP studies will examine whether they should also stop handling destinating mail -- that is, mail that is dropshipped at the facility or that is shipped from other P&DCs.
Such consolidation of destinating mail helps mailers get better dropship discounts. For example, Houston mail entered at North Texas used to qualify only for ADC discounts but now gets the better SCF discounts. The consolidations also enable mailers to create larger pallets and fewer sacks of mail, which reduces the Postal Service's handling costs.