Village Post Offices are no golden solution (Reuters)

(Reuters) – The financially troubled U.S. Postal Service has determined that its plan to replace money-losing offices with retailers contracted to offer basic services will not work in many rural communities.
The world’s largest mail carrier hoped the plan, announced in July as part of a series of cost-cutting moves to combat recent losses, would save hundreds of millions of dollars.
The agency set an eventual goal of 2,000 “Village Post Offices,” but it has fewer than 10 fully operating.
It is now looking at ways to operate some rural post offices more cheaply rather than closing them.
“When you get west of the Mississippi, it’s more prevalent that you don’t have stores in these communities, you have nothing in these communities. It’s pretty much just the post office,” Postmaster General Patrick Donahoe told Reuters in an interview.
“I think as you get out to these areas that don’t have that option, we’ve got to figure out the best way to provide.”
The Postal Service, which receives no taxpayer money for its operations, has struggled with the loss of mail volume to the Internet and the economic recession. A massive annual payment imposed by Congress in 2006 compounded the problem, and the agency lost $20 billion in the four years through 2010.
The Postal Service is constrained by law in how it can cut costs and sees closing post offices as one of its few remaining options as it awaits a legislative overhaul of its operations.
Officials in July said they would study almost 3,700 of its 32,000 post offices for possible closure. Many would be replaced with Village Post Offices housed in general stores and other local retail outlets, the agency said.
The announcement sparked an outcry from communities and lawmakers seeking to protect their post offices. Critics said the expected savings — about $200 million, compared with operating expenses of about $70 billion — would be too small to justify closing thousands of post offices.
The Postal Service still plans to establish new Village Post Offices, but the lack of potential retail partners could allow some post offices to remain open. Thirty Alaska sites were removed from the list when the agency decided they were needed to maintain service. “We found out there were no roads to get there,” Donahoe said.
Six Village Post Offices are operating now, and one opens next week. Four retailers are finalizing their agreements, and about 30 others are in various stages of the contract process, according to a Postal Service spokesman.
“In practice, they haven’t been able to sign up that many Village Post Offices, and they are discovering that in these rural areas they’ve identified there aren’t necessarily other businesses that would take on the rural post office,” said Ruth Goldway, chairman of the Postal Regulatory Commission.
“It’s not going to be their great solution to the problem.”
The agency now is considering keeping post offices open in some rural areas for only the few hours each day when they experience the most traffic. Postmasters, who are often the only employee at rural post offices, would receive lower pay and benefits to manage those offices, Donahoe said.
“There’s no reason to have it open from 10 a.m. until 6 p.m. if, for those other eight hours a day, somebody’s standing there looking out the window,” Donahoe said.
Bob Levi, director of government relations for the National Association of Postmasters of the United States, called the shift “better than nothing.”
“That is a strong indication that Village Post Offices are not all they were cut out to be,” Levi said.
Several bills now before the U.S. Congress seek to fix the agency’s woes, including ending Saturday mail delivery. Absent an overhaul, the agency is still studying the post offices for closure, though Donahoe said none would close before February. The Postal Regulatory Commission is working on its own advisory to guide the Postal Service through the closings.
Donahoe said USPS still plans to close post offices where residents can access another post office or where rural letter carriers — who can sell stamps, pick up packages and offer other services — could make up the service.
(Reporting by Cezary Podkul in New York and Emily Stephenson in Washington; editing by Mohammad Zargham)

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