Mail service shifts hit home

Budget-cutting moves by the U.S. Postal Service could mean more jobs for Spokane.

The Postal Service, trying to trim $3 billion in spending to help it avert bankruptcy next year, plans to lay off about 30,000 workers and close 252 mail processing centers nationwide through consolidation that would send the work to regional facilities. Spokane’s mail processing center on the West Plains is among those that would absorb work from closed facilities, according to a tentative list circulated Monday as part of an overall cost-cutting strategy by the Postal Service.

“The proposed changes to service standards will allow for significant consolidation of the postal network in terms of facilities, processing equipment, vehicles and employee workforce,” said David Williams, vice president, Network Operations for the Postal Service.

Although trimming the overall workforce, the consolidation of mail processing centers will shift some remaining jobs to the 209 facilities such as the one in Spokane. The number of new jobs in Spokane remains unclear, said Postal Service spokesman Ernie Swanson.

Most likely would come from processing centers in Western Montana, said Swanson, noting that Missoula and Kalispell could lose 40 jobs if their processing centers close. In Eastern Washington, processing centers in Pasco and Wenatchee also are slated for closure, with the work being sent to Spokane as well.

Built in 1998, the West Plains processing center is located near the Spokane International Airport and alongside a regional Netflix DVD warehouse. Netflix is one of the Postal Service’s largest customers.

The spending cuts come at a time of dramatic shifts in how Americans communicate and conduct business.

For some mail-dependent businesses, quick and cheap first-class mail service from the U.S. Postal Service is still the best way to reach prospective customers and subscribers. And for many, it’s still an important way to get paid.

The Postal Service, which has been losing money for five years, said Monday that it is shuttering more than 200 mail processing centers, adding at least a day’s wait for many first-class deliveries. The news was met with concern and frustration from some businesses – and shrugs from others that long ago stopped relying on the post office.

“It’s less of a disaster than it would have been 10 years ago, but it’ll be a cash flow crunch for some companies,” said Todd McCracken, president and chief executive of the National Small Business Association. “It’ll be longer to get your invoice, and longer to get a check back.”

First-class mail is supposed to arrive at U.S. homes and businesses in one to three days; about 42 percent of it arrives in one day. The cutbacks will back up deliveries to two to three days; periodicals could take up to nine days.

Most Netflix customers who subscribe to the company’s DVD-by-mail service watch movies on the weekends and should still be able to return movies Monday and have new ones on Friday, according to Michael Pachter, an analyst at the investment firm Wedbush. But other users will notice a delay, he said.

Netflix has repeatedly warned in regulatory filings that any Postal Service cutbacks that delay its DVD-by-mail deliveries will make it more difficult to keep subscribers happy. And, with encouragement from Netflix, customers are already abandoning mail service for movies delivered online.

But for many companies, the changes will have no effect. Some have already stopped relying on the Postal Service, moving online for billing or to overnight companies FedEx and UPS for critical deliveries. First-class mail volume is 78 billion per year, down from a peak of 104 billion in 2001. It is projected to drop by roughly half by 2020.

The 28,000 job cuts announced by the Postal Service likely won’t make a big difference to the economy or job market, economists say. Private delivery companies will probably get more business as the Postal Service cuts back.

“It adds to the fear about higher unemployment and inadequate job growth,” said Jonathan Basile, an economist at Credit Suisse. But when the cuts are spread over several months, in an economy with about 140 million jobs, there won’t be a large impact, he said.

Postal Service employment has been declining for years. The service has cut more than 30,000 jobs in the past year, the government’s Friday employment report showed.

Postal Service employment peaked at 909,000 in 1999 and has declined steadily since, falling to 612,400 last month.