Haste Makes Waste: The Hidden Cost of Closing Post Offices

I went to the Post Office in New Zealand this morning - to mail a package for somebody's Birthday (on 11-11-11!). I mailed the package to the States. The clerk told me I should have mailed it yesterday, as they raised the prices astronomically today. He said it was in response to the thousands of Post Offices they are going to close this week - the US Post Office is trying to generate money other ways.

So I went home and looked on-line, and I don't see anything about thousands closing this week, so I think that is probably not true. But I did find an interesting article entitled: Haste Makes Waste: the Hidden Costs of Closing Post Offices from this Save the Post Office website.

The website is pretty informative, and one of the things it highlights is that they are closing offices with very long-term leases, which they keep paying on or try to buy out. It seems like a HUGE waste of taxpayer money. There's a chart on the site which shows offices closing with leases until 2014 or 2015 even.

It’s hard to understand this kind of decision-making when the entire rationale for closing thousands of post offices is that the Postal Service is losing billions and needs to cut costs. Saving $200 million by closing 3,650 post offices never made sense anyway. That’s a drop in the bucket in the context of the USPS $70 billion annual budget, and it won’t do a thing to solve its multi-billion dollar annual deficits. But the decision makes even less sense when you see how the Postal Service can dribble away millions on irrational property-management decisions.

Check the link if you want to see other examples of "irrational property-management decisions."

I don't work for the Postal service or take a personal interest, but I know a large percentage of Americans do. I DO get annoyed when I see our tax dollars wasted. Is this also the job-creating I hear touted?

(As for myself, the clerk pointed out the opposite proverb: - "he who hesitates is lost" - about $20 had I mailed the package earlier!)

I could easily be mistaken, but I don't think the issue is real estate costs. 80% of the USPS budget is labor costs. Closing the offices allows reducing the labor force. They may also be hoping to sub-lease the office space to reduce their expenses. They've got to do something.

Based upon current volume, all the US Post Office has to do is raise rates five cents average per mail piece to break even again.

Originally posted by chuckk
Based upon current volume, all the US Post Office has to do is raise rates five cents average per mail piece to break even again.

That makes way way too much sense......

Well, that's exactly what I thought! But then I read some of the information and looked at some of the links. For example in this case they took into consideration the cost of keeping the employees compared to buying out the lease, and it even went to court - this is what the judge said:

Apparently perplexed why the Postal Service was buying out the lease when it would have been less expensive to keep the post office open until the lease ran its course, Goldway wrote that “in my view, the final determination does not offer a rational explanation of why the Postal Service would make a determination to close this facility despite the closing’s negative impact on the Postal Service’s finances.”

reply to post by charles1952


and a different situation...

Or consider the case of Falls Church, Virginia, where the Postal Service moved its retail operation four blocks down W. Broad to a new building that patrons find very inconvenient and an architectural “monstrosity.” But it’s a “signature space” and the rent is pretty expensive — almost $20,000 a month for 5,000 square feet. Plus, for some reason the Postal Service signed a lease that goes until 2024. Maybe it has an early-out clause.

In any case, the new space isn’t big enough for the letter carriers, so they stayed in the original building, where the rent is almost $30,000 a month (counting the parking lot, which costs $2,600 a month). The carriers may eventually be moved somewhere else, but there’s still a year and a half left on that lease, so it looks like the Postal Service will be paying $50,000 a month on two facilities four blocks apart for quite some time.

shrugs shoulders. I was hoping someone local to the situation could fill me in - is this as stupid as it sounds? Or just angry ex-postal workers put together the site....?

The fact that the US Post Office is having financial difficulties should have no effect on postal rates in New Zealand. The originating post office keeps the money. Also, there have been no huge raises in the cost of mailing packages. The last increase was in April, 2011 when the cost of international packages rose an average of 78 cents, hardly a huge increase. In fact, the cost of a 10 pound international package actually went down a penny. So I'm not seeing the connection here.

The post office is a dinosaur. Its death throes will be agonizing over the next few years. It cannot survive the digital age.