Postal Service to study consolidation of Cedar Rapids, Waterloo mail centers

UPDATE: The United States Postal Service will initiate area mail processing feasibility studies at Cedar Rapids and Waterloo that could lead to consolidating those operations in Davenport and Des Moines, respectively.

The studies, which are being announced this morning by Postmaster General Patrick Donahoe, involve the review of mail processing and transportation operations at those facilities. The mail volume will be reviewed to determine the capacity needs to increase efficiency and improve productivity, Patrick Devine of the USPS said in a letter to Cliff Guffey, president of the American Postal Workers Union.

“In doing so, we will be able to continue to provide universal service at a reasonable cost for a long time to come,” Devine said.

If the USPS consolidates the Cedar Rapids facility with its processing and distribution center in Davenport, as many as 200 jobs could be affected, according to members of the American Letter Carriers Union local in Cedar Rapids.

“We are forced to face a new reality today,” Donahoe said in announcing his proposal in Washington this morning. “First-Class Mail supports the organization and drives network requirements. With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic. Since 2006, we have closed 186 facilities, removed more than 1,500 pieces of mail processing equipment, decreased employee complement by more than 110,000 through attrition and reduced costs by $12 billion.”

There is a new reality for the postal system, Sen. Tom Harkin said, but the bigger question is whether the nation values its mail delivery system.

“If they are going to be consolidating the processing centers, fine,” the Iowa Democrat said. “I just want to make sure that what they come up with is cost savings. Sometimes people shuffle things around and it doesn't really save any money at all.”

The next question, Harkin said, is whether the postal system is a service or not.

“If it is a service, then we have to be willing to understand that sometimes services don't always break even. They don't make money,” Harkin said. “This is not FedEx. This is not UPS. It is a postal service and in many ways is doing things that a private entity would never do because there is no money in it.”

U.S. Rep. Bruce Braley, a member of the Oversight and Government Reform Committee, which has legislative authority over the USPS, expressed concern about the possible consolidation and has asked USPS for an analysis of job loss. He's asked that a decisi0on on consolidation be delayed until Iowans have an opportunity to weigh in.

“This action by the U.S. Postal Service could mean hundreds of Iowans will soon be unemployed,” Braley said. “Now is not the time to lay off Iowa workers. I will fight this bad decision.”

Anticipating those concerns, Devine defended the studies and likely consolidations.

“The Postal Service is facing one of the most difficult challenges in its history,” he said. “The reality 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 irresponsible not to do so.”

The USPS also announced mail processing facilities in Carroll and Creston will be studied for possible closure.

According to the USPS, an area mail processing study may involve the consolidation of originating operations -- canceling and sorting locally generated mail at a facility close to where the mail originates, destination operations -- sorting and preparing mail received from more distant areas for local delivery -- or both. The aim is to more efficiently use USPS equipment, facilities, staff work hours and transportation.

The USPS looks at expected savings, service, transportation and logistics, capacity within the processing center and maximizing that capacity, mail volume and using the least equipment.

The studies are expected to take between three and four months. It's conceivable that the consolidations could begin as early as early as February 2012.

The agency plans to reduce the number of mail processing centers from 500 to 175 over the next year, Donahoe said. It's part of an effort to slash $20 billion from the budget.