Dive Brief:
- The Postal Service will keep some processing operations in at least eight local plants that the agency first planned to consolidate elsewhere, according to a series of news releases in recent weeks.
- Facilities in California, Florida and Tennessee are among those that will retain the work and change into Local Processing Centers, a new node in the Postal Service's network that processes destination mail and serves as a collection point for packages into the delivery network.
- "In simpler terms, outgoing single piece mail will continue to be processed at its current location," the Postal Service said in a news release about the decision for a facility in Reno, Nevada.
Dive Insight:
The moves mark another adjustment in the Postal Service's evolving plan to improve its financial stability by overhauling how it processes mail and packages.
The delivery provider credited its recently proposed transportation tweaks, which would slow volume coming from rural post offices, for providing a path to keep outgoing mail processing operations at the plants. It initially looked to transfer that volume to larger, regional facilities further away in 2025 as part of its ongoing cost-savings push, an approach that lawmakers have criticized over potential shipping delays and job losses for their constituents.
For example, in Reno, the agency first planned to shift outgoing mail operations to a Processing and Distribution Center in West Sacramento, California. Now, the Postal Service wants to make Reno's postal facility a Local Processing Center with a $13.4 million investment. Similar turnabouts are happening for other locations across the country.
USPS to maintain processing operations at several facilities, invest in upgrades
The investments at these facilities will boost their package processing capabilities and shipping capacity without any staffing impacts, according to the Postal Service. That includes its Charleston, West Virginia, facility, where the agency will invest $7 million to install new sortation systems.
The Postal Service conducted reviews of these processing facilities earlier this year to determine whether it should move their operations elsewhere to reduce expenses. It paused the implementation of changes that resulted from these reviews until next year amid lawmaker scrutiny.
"The main objective of these reviews was to find cost efficiencies, primarily through transportation savings," the Postal Service said in the Reno announcement.
Now, the Postal Service looks to achieve savings through a different strategy. It aims to reduce afternoon dropoff and pickup activities at post offices in ZIP codes more than 50 miles away from the nearest regional processing and distribution center. Volume from rural locations may see longer transit times, but parcels originating near the centers could reach their destination faster, Postal Service officials said earlier this month.
The agency projects this will save it between $2.8 billion and $3.3 billion annually through the initiative, with changes starting in 2025 after requesting an advisory opinion from the Postal Regulatory Commission.
"These enhancements aim to strengthen service reliability, increase cost efficiency, and boost overall productivity," the Postal Service said.
