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Cost of first-class mail jumps 2 pennies today
Monday, May 11, 2009

Starting today, the cost of sending a piece of first-class mail jumps two pennies to 44 cents.

That's not much of an increase, but it points to an increasingly grim reality for the Postal Service: Mail volume is declining because of the Internet and the soured economy.

It's a double-whammy for an institution that supports itself and uses no tax dollars. In the last year alone, volume declined by more than 9 billion pieces of mail.

"It's a very bleak picture for the Postal Service," spokesman Tad Kelley said.

Because of the erosion, the Postal Service is realigning its delivery network to make it more efficient.

Western Pennsylvania is one of 12 districts across the country in which the Postal Service is studying possible consolidations of its processing centers.

A study began last month to examine combining the New Castle and Pittsburgh operations.

The postal union opposes any attempt to close the New Castle center, which employs 200 people and processes 1.75 million pieces of mail each day, but the Postal Service says it might make sense to use other facilities to handle that work.

The Pittsburgh center has 900 employees serving much of Western Pennsylvania and the West Virginia panhandle.

The feasibility study should be done sometime this summer. In the meantime, the Postal Service is soliciting public input. Anyone may submit comments to: Consumer Affairs Manager, 1001 California Ave., Pittsburgh 15290.

The Postal Service is examining similar consolidations in California, Massachusetts, Texas and elsewhere.

Some have already been approved after studies showed combining operations will save some money and increase productivity. Last month in Ohio, for example, outgoing mail processing was transferred from the Canton center to one in Akron, 20 miles away. The study that led to the change indicated the move would save $1.7 million in work hours, $243,000 in transportation costs and another $240,000 in maintenance savings. About 20 employees from the Canton facility were expected to be reassigned.

The Postal Service says it is continually monitoring how best to streamline its operations in challenging times.

The economic downturn has had a major impact on the Postal Service because a high percentage of first-class mail comes from banks, lenders and credit card companies, all of which have slashed costs and cut back on mailings.

But the decline in volume has been happening for a long time as Internet e-mail slowly replaces snail mail. From 1998 to the end of fiscal year 2008, first-class mail dropped by 19 billion pieces, or 29 percent.

"The reality," said Western Pennsylvania District Manager Charles P. McCreadie in a letter to a Post-Gazette editor, "is we have an excess of equipment, staff and facilities to process a declining volume of mail. Consolidating some postal operations only makes logical business sense given the economic realities. It would be fiscally irresponsible not to do so."

Torsten Ove can be reached at tove@post-gazette.com or 412-231-0132.
First published on May 11, 2009 at 12:00 am
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