Springfield’s mail processing center, which employs more than 250 workers, has been spared from consolidation with a sorting center in Kansas City. For now, at least.
United States Postal Service officials announced in May that Springfield’s mail processing center, 500 W. Chestnut Expressway, would be part of a second round of consolidations that aren’t scheduled to roll out until February 2014 at the earliest. The first round of closures, affecting 140 sorting centers across the nation, begins this month. Previously, the USPS had said closing 252 sorting centers across the country could begin as early as May 15, when a congressionally imposed moratorium on closures ended.
Rob Dixon, vice president of business assistance for the Springfield Area Chamber of Commerce, said he is pleased that closure of Springfield’s sorting center has been, at least, temporarily stayed.
Dixon acknowledged the postal service’s financial considerations and said the Springfield chamber would remain engaged in the issue moving forward.
“We are going to continue to watch this issue and work with the postal service and our federal delegation in Congress and let everybody know this is a vital part of our community’s business infrastructure,” Dixon said. “I think it was clear that during the public hearing held on this that the business community is not in favor of closing our postal processing facility. And we would not want to see it closed today or in the future.”
U.S. Postal Service Mid-America District spokesman Richard Watkins said consolidation of larger processing centers such as the one in Springfield were delayed with the hope that Congress would develop a workable plan to save them.
“The nation needs a strong postal system, and I know our elected representatives realize that,” Watkins said, stressing that post office retail operations in Springfield are not at risk of closing.
He said the nationwide closures are expected to save the postal service $1.2 billion annually, and according to USPS, the postal service would save $7.98 million by closing processing operations in Springfield.
David Mitchell, director of the Bureau of Economic Research at Missouri State University, said the impact of a potential closure in Springfield is a bit overblown.
“It probably has a small effect, but it is probably not as big as people think it is,” Mitchell said. “People forget that when you hire people, that’s a cost. … You can look at it in the sense that those 200 people have employment and can have money to go out and buy things, but that also means that their wages are coming out of our postal rates.”
Mitchell said he thinks keeping the Springfield sorting center open ultimately benefits USPS more than it does the local business community. Were the consolidation to take place, it would take longer for mail sent within Springfield ZIP codes to arrive, he said. Additionally, the postal service likely would want to increase rates to recoup those transportation expenses. The combination of more delayed mail that costs more to send, Mitchell said, would only serve to further decrease revenues and mail volume.
The first round of USPS closures is scheduled in two phases, according to Watkins, with 48 relatively small-volume mail facilities being shut down through September. Another 92 closures are scheduled between February 2013 and February 2014, when the first round of consolidations would continue.
“(The Springfield sorting center) would close only if things stay the same and the postal service doesn’t get the comprehensive postal legislation it needs,” Watkins said.
Watkins said the postal service has been hemorrhaging money in recent years, and the move to shut down Springfield’s processing center is part of a larger plan to fit its operations within its service demands.
According to the USPS, first-class mail volume has declined by roughly 42 percent, or nearly 23 billion pieces, between fiscal years 2001 and 2010.
Last year, the USPS began to consider moving to a five-day delivery schedule, closing 252 mail processing centers – including Springfield and Cape Girardeau – and 3,600 low-activity post offices in a plan to save $20 billion by 2015. Watkins said the Cape Girardeau facility also is scheduled in the second round of processing-center consolidations.
In July, USPS officials began sorting Springfield’s weekend mail at its Kansas City processing center as part of its ongoing study to review savings opportunities through consolidation. Watkins said the Kansas City sorting center postmarks about 140,000 pieces of mail on the weekends for Springfield, an amount that is roughly half of Springfield’s weekday volume.
Moving to five-day delivery requires congressional action, Watkins said, and nothing has been approved to date. On April 25, the U.S. Senate passed the 21st Century Postal Service Act of 2012, which would allow the USPS to streamline aspects of its operations, but would prevent a move to five-day delivery for two years. The House of Representatives’ version of the bill has been placed on the agenda for consideration after July 4, Watkins said.
The Senate bill would reduce the postal service’s $5.5 billion pension annual obligation. The Postal Accountability and Enhancement Act of 2006 required the USPS to pay annually for 10 years in future retiree health benefits, and USPS officials have sought to lift that requirement in any reform package.
During the last five years, Watkins said more than 200 processing centers, including a Kansas City, Kan., facility, have closed. He said job losses in Springfield are not expected before February 2014, except through attrition.
Mitchell said USPS is stuck between a rock and a hard place.
“They have to provide universal service, and they have to make a profit, and you can’t do both of those things at the same time,” Mitchell said. “You can’t have a letter that you mail from Nixa to Springfield cost the same as a letter you mail from Nixa to New York and make a profit. You just can’t do it.”[[In-content Ad]]
