TESTIMONY BEFORE THE PRESIDENT'S COMMISSION ON THE POSTAL SERVICE by ROBERT H. COHEN DIRECTOR, OFFICE OF RATES, ANALYSIS AND PLANNING POSTAL RATE COMMISSION FEBRUARY 20, 2003
Closing Small Post Offices
Providing reasonable access to postal counters is part of the universal service obligation of all posts in industrial countries. In 1901, the U.S. had 77,000 post offices and the number has been in decline ever since. Today the Postal Service has about 28,000 post offices, 6,000 stations and branches17, 3,000 contract stations and branches, and 1,500 community (franchised) post offices. All told the USPS currently has about 38,000 facilities with counters. The Postal Service had been closing some small post offices each year until it imposed a moratorium on closings in 1998. It has recently lifted this moratorium. Many small offices have few transactions and many average less than ten transactions daily. 17 Branches and stations are subunits of large post offices and have counters. The authors cannot identify which offices would be eliminated under the hypothesis of this paper, and thus cannot quantify the potential savings exactly. We can, however, put an upper bound on the savings. The 10,127 smallest offices18 cost the post office $567 million annually in FY 99. Including personnel and facility costs. This is seven-tenth of one percent of total postal costs. The General Accounting Office recommended the closing of 7,000 small offices in a report written in 1982.19 This was about 70 percent of the small offices at the time. Closing this number would produce annual savings of $397 million or 0.6% of total costs. |