Perilous Times
5 December 2011 Last updated at 14:46 ET
US Postal Service facing 28,000 job losses
The US Postal Service's Vice-President, David Williams, says
customers are choosing to use faster electronic alternatives
The US Postal Service is shutting more than half its
mail-processing centres in a $3bn (£1.9bn) cost-cutting drive
expected to shed 28,000 jobs.
Vice-President David Williams told a news conference that the
closures were designed to stave off bankruptcy next year.
Out of 461 mail-processing centres across the US, 252 will be
shuttered starting from next April.
The move could spell the end for next-day delivery of first-class
mail.
At the Postal Service's headquarters in Washington DC, Mr Williams
told media that the volume of stamped mail had been steadily
declining.
Customers were increasingly using the internet for bill payment
and other communication, he said.
From nearly 100 million in 2006, first-class mail volume was down
to 78 million and expected to halve by 2020.
The closure of mail processing centres will mean letters must
travel further before they can be distributed.
The Postal Service says this means overnight delivery, which has
been the norm since 1971, will not be possible except in special
cases such as bulk deliveries.
After the closures, it is estimated that most letters will take
two to three days for delivery, while periodicals will take two to
nine days to reach subscribers.
"Customers are making their choices, and what we are doing is
responding to the current market conditions and placing the postal
service on a path to allow us to respond to future changes," Mr
Williams told reporters.
Under the changes, the Postal Service is also increasing the cost
of first-class post by one cent on 22 January.
It faces the prospect of default at the end of this month when the
Treasury expects an annual payment of $5.5bn for retiree health
benefits.
The cash-strapped agency, which is run without public financing,
reported an operating loss of $5.1bn in the last fiscal year.
It is projected to make a record loss of $14.1 billion next year.