The Postal Service and the Postal Regulatory Commission are currently working on the annual compliance review. The goal of the ACR, as stated in 39 U.S.C. §3652, is to determine if during the previous fiscal year the Postal Service has met all of the rate setting and service goals of the 2006 Postal Accountability and Enhancement Act.
The review deals primarily with the issue of whether or not each class of mail complies with the requirement that revenues cover costs. But the review also encompasses “quality of service,” which includes “consumer access to postal services.” As part of the compliance review, the Commission therefore takes a look at where things stand on post office closings and emergency suspensions.
In its ACRs to the PRC for 2014, 2015, and 2016, the Postal Service reported that it had not closed any USPS-operated retail facilities during the previous fiscal year. In the FY 2017 ACR, however, the Postal Service stated that it had discontinued 304 post offices during 2017.
After not closing any post offices for three years, that may sound like of lot of closures to announce. But these were not new closings that had occurred during FY 2017. They were all post offices that had been previously closed for emergency suspensions, often long ago. The Postal Service was just trying to clear a large backlog of suspensions that had developed over a period of many years.
A final determination to discontinue had been issued on these 304 post offices at various points during 2013 to 2015, but the Postal Service was reluctant to finalize the discontinuance process on these offices by completing the last step — publishing the discontinuance announcement in Postal Bulletin. In the FY 2016 ACR, the Postal Service explained why it was holding off on announcing these discontinuances:
“Retail discontinuance actions often elicit questions and concerns from stakeholders, both at the federal and local level, and confusion can arise whenever a large scale effort to discontinue retail units, even those that are in longstanding suspended status, are announced. Further, clearing the backlog of suspensions could have complicated efforts at the federal level to secure necessary consensus on ongoing legislative reforms under consideration. Consequently, action on clearing the backlog of suspensions was essentially deferred in FY 2016.”
In other words, the Postal Service held back the discontinuance announcements because it did not want to raise public concerns or complicate its efforts to get postal reform done in Congress.
In order to understand how simply announcing discontinuances could become so problematic, it helps to go back a few years.
Optimizing the network and saving the post office
In FY 2008, the Postal Service discontinued about a hundred post offices, pretty much in line with the average number of closings per year for the previous four decades. But it had big plans to close a lot more.
In early 2009, the Postal Service announced it would be reviewing 3,200 of its 4,800 stations and branches for closure under what it called the Stations and Branches Optimization and Consolidation Initiative (SBOC). The list of possible closures kept changing, and the SBOC was something of a moving target during the PRC’s Advisory Opinion process. At one point the list of probable closures contained 750 post offices, but by the end, the list was down to about 140.
In FY 2009, the Postal Service closed 129 post offices, and in FY 2010, there were 107 closings. The numbers were above average compared to previous years, but nothing compared to what the Postal Service was about to announce.
In January 2011, the Postal Service released a list of about 500 post offices slated for closure and announced plans to close 2,000 more. In late January, the Wall Street journal reported that the Postal Service was reviewing 16,000 post offices — half of the nation’s existing facilities — for closure.
During FY 2011, the pace of the closings picked up. By the end of the fiscal year, 360 would be discontinued.
The Postal Service couldn’t continue to close a significant number of post offices without producing a plan that could be reviewed by the PRC. In July 2011, the Postal Service announced the Retail Access Optimization Initiative (RAOI), a plan to close 3,700 offices. It also released a list of another 730 offices being considered for closure outside the RAOI.
During the fall of 2011, while the Commission was working on its RAOI advisory opinion, a discontinuance process was initiated on about 3,000 of the RAOI offices. In November, reiterating what the Postal Service told the Wall Street Journal at the beginning of the year, Postmaster General Patrick Donahoe told Time Magazine, “We’ll probably look at 15,000 post offices” for closure.
The hundreds of closures that took place in 2011 and the threat of thousands more were met with anxious and angry town meetings in small towns across the country. Members of Congress were getting an earful from their constituents, and the closures were complicating the prospects for postal reform legislation.
In December 2011, several Senate leaders urged the Postal Service to delay the closings to give Congress more time to enact reform, and on December 13, the Postmaster General declared a five-month moratorium on closings.
Ten days later, the PRC issued a unanimous advisory opinion on the RAOI. It identified numerous serious problems with the plan, not the least of which was the matter of how closing so many post offices would “optimize” anything.
In May 2012, the Postal Service came up with an alternative to the RAOI. Under the Post Office Structure Plan — POStPlan — the Postal Service would “save” 13,000 small rural post offices by reducing their daily hours of operation to six, four, sometimes just two. Their postmasters were given incentives to retire — several thousands did — and others relocated. The era of the small-town postmaster had come to an end. At least the post offices were allowed to remain open, said the Postal Service.
Another couple of hundred post offices ended up getting closed during FY 2012 and 2013, but by 2014, the discontinuances had stopped completely, as the Postal Service informed the PRC in its ACRs for 2014, 2015, and 2016.
That, by the way, wasn’t 100 percent accurate. The Glenoaks Station in Burbank, Calif., was discontinued in December 2013 (during the first quarter of FY 2014) after an unsuccessful appeal to the PRC and despite a plea from Congressman Adam Schiff. For some reason, this discontinuance was never announced in Postal Bulletin.
With the post office closings at a halt, the Postal Service could assure concerned members of Congress there was no need for the issue to get in the way of postal reform legislation. But post offices did continue to close, not through a discontinuance procedure but by emergency suspension.
The suspension backlog
When a post office is closed for an emergency suspension, the Postal Service is supposed to either correct the problem and reopen the post office or proceed to a discontinuance process. But in many cases, the Postal Service has done neither. Instead, communities have been left in limbo, often for several years.
With their post office under suspension, the community has been denied the opportunity to comment on the pending closure in a discontinuance procedure, and people are also unable to have their appeal heard by the PRC. That’s because appeals on suspensions are regularly dismissed by the Commission as “premature” since no final determination to close has been issued.
Over the years, a large backlog of post offices under emergency suspension developed. As shown on this list from the 2016 ACR, 655 post offices were under suspension as of the end of FY 2016.
About 450 of these suspensions had occurred before 2014, about 60 of them had occurred before 2010, and a few went back to the 1980s.
On average, the backlog had accumulated at a rate of about 70 per year. (More suspensions than that took place, but some offices reopened.)
The PRC had been after the Postal Service to clear this backlog for several years, and in recent compliance determination reports, it urged the Postal Service to complete the resolution process for the growing number of suspended offices by either reopening them or discontinuing them.
As reported in the 2017 ACR, during FY 2017 the Postal Service made some significant progress on clearing the backlog. It finally published the discontinuance announcements on 304 of the 655 post offices under suspension, and it also reopened 34 offices (most of which had been suspended relatively recently).
During FY 2017, another 86 more offices were suspended, 27 of which were reopened by the end of the fiscal year, thus adding 59 to the backlog. As of the end of FY 2017, there were still 378 offices under suspension.
Since the end of FY 2017, another 28 discontinuances have been announced in Postal Bulletin, and a handful of other post offices have been reopened. There are now about 340 offices still under suspension.
Discontinuances to come
The Postal Service hopes to close the books on these suspended post offices during fiscal years 2018 and 2019. As the Postal Service has explained, it will take a couple of years to complete this process since it’s time consuming to obtain the necessary information on offices that have been suspended for extended periods of time.
One wonders where this information is going to come from.
When the Postal Service updated the PRC about the status of suspensions at the end of FY 2016, the spreadsheet it shared showed the dates when the proposal to close had been posted, when the community meeting was held, and when a final determination to close was made.
For the post offices that would be discontinued during FY 2017, the table provided most of the dates. That’s probably because about two-thirds of these offices were on the RAOI list and had gone through the earlier stages of the discontinuance process back in 2011.
But for 300 other post offices, the table was largely empty. Had these steps in the discontinuance process not taken place yet? Is the Postal Service planning to post the proposal to discontinue at nearby post offices, invite comments, hold public meetings, and do all the other steps in the discontinuance process for all of these post offices? That’s hard to imagine, especially considering that 250 of the 300 suspensions occurred in 2015 of before and almost a hundred go back to 2011 or before.
Mapping the closures
The Postal Service announces post office discontinuances in the bi-monthly Postal Bulletin. By going through the past ten years of issues, one can put together a list of discontinuances announced since Oct. 1, 2007 (when FY 2008 began). You can see such a list here. (The Postal Bulletin announcements for 2012-2018 can be conveniently found on PostalPro; for the previous years, the Postal Bulletin archive is here.)
In order to learn how suspensions figured into the closing picture, we combined the Postal Bulletin discontinuance list with several lists of emergency suspensions that the Postal Service shared with the PRC during the ACRs for 2010 (and another for 2010), 2012, 2016, and 2017.
According to the announcements in Postal Bulletin, the Postal Service discontinued about 1,230 post offices during FY 2008 to 2017, plus another 28 so far in FY 2018. If we include the 340 or so offices currently under suspension, most of which are probably headed for discontinuance, we’re looking at 1,600 closures.
Our list and map show these 1,600 post offices: 1,115 main post offices, 290 stations, 75 branches, and 110 community post offices (CPOs).
POST OFFICE DISCONTINUANCES & SUSPENSIONS, 2007 – 2017
This list is strictly unofficial and very imperfect. The suspension lists often lack information that would be helpful in identifying the specific offices, and in general, the Postal Service tends to be rather withholding about such information. Back in 2011, when the PRC asked for a list of offices under suspension, the Postal Service actively fought to keep the list non-public.
Our list is especially imperfect when it comes to addresses. The discontinuance announcements in Postal Bulletin do not include addresses, perhaps because post offices are sometimes relocated and the Postal Service may consider the address a non-essential aspect of a post office’s existence.
While a few do get relocated, most post offices stay where they are for decades, and in the minds of local citizens, the building is the post office. Since location is important when it comes to brick-and-mortar post offices, we’ve tried to identify the address for every facility on the list, even if it means some errors. It’s not always easy finding the address for a post office that closed years ago.
Here’s a year-by-year breakdown of the discontinuances and suspensions. The discontinuance numbers indicate how many offices had a discontinuance date during that fiscal year that was announced in Postal Bulletin; the suspension numbers indicate how many offices were suspended during that fiscal year, as reflected in the reports provided by the Postal Service during the PRC’s compliance reviews.
|No date provided||106|
The numbers for 2018 and 2019 are projections based on the Postal Service’s plan to resolve the remaining suspensions. The numbers assume nearly all of these suspended offices will be discontinued, although a few of the more recently suspended offices will probably be reopened.
The numbers do not include post offices that were suspended during this ten-year period if they were subsequently reopened. There may be some exceptions, though, for offices that have been reopened over the past few months; these may inadvertently be included on the list because the Postal Service’s most recent update focused on where things stood at the end of FY 2017 (Sept. 30, 2017).
As the table shows, during 2008-2019, closings averaged 133 per year. That’s more than 30 percent higher than the pace for the previous four decades. As indicated by a report done by the Congressional Research Service, in 1970 there were a total of 35,870 post offices, stations, and branches; by 2008, there were a total of 32,080 — a decline of about 3,800 over 38 years, about a hundred a year.
As the table shows, no post offices were discontinued during fiscal years 2014, 2015 and 2016. But during those years, about 167 post offices were suspended and not reopened, i.e., they were discontinued in 2017 or they’ll probably be discontinued this year or next. So when the Postal Service reported to the PRC that no post office has been closed during 2014, 2015, and 2016, it was true in the sense that none was discontinued. But post offices did continue to close by emergency suspension.
Causes for suspension
Of the 1,600 completed and pending discontinuances, nearly a thousand — 62 percent — involved an emergency suspension.
The ACR suspension lists provide information about the cause for the suspension in 534 cases. Of these, 252 suspensions (47 percent) were caused by a problem renewing the lease; 122 (22
percent) were caused by safety issues; 99 (19 percent) were caused by problems staffing the office; and 64 (12 percent) were caused by damage to the building.
The lease issues have been the most contentious. Many communities and post office lessors have felt that the Postal Service deliberately created an issue over renewing the lease simply to justify closing the post office. The staff issues are also problematic, since they’re typically within the Postal Service’s control. It’s understandable that it might become difficult to find someone to staff an office on a short-term basis, but how can this become a long-term issue?
Preserving access to postal services in rural areas
To learn more about the communities impacted by the closings, we added some Census data to the list of 1,600 discontinuances and suspensions.
We found population data on about 1,200 Zip Codes. About 826 of these Zip Code areas — around two-thirds of the total — were 100% rural (which the Census defines as fewer than 500 people per square mile).
Given that the 400 offices for which we did not find census data were probably also rural (they’re so small they don’t show up on the Census), it’s likely that about 1,200 of the 1,600 closings took place in rural communities. That’s about three-fourths of the closings.
That percentage is also indicated by the fact that only about 360 of the 1,600 post offices were stations and branches, i.e., post offices in more densely populated urban and suburban areas. Given that the Postal Service rarely closes the main post office in a city without relocating it, this means that the remaining 1,240 offices were probably small main post offices, remotely managed post offices, and community post offices in rural areas.
In terms of population, a total population of 7.6 million people (about 3 million households) may have been affected by the closings and suspensions. Approximately 800,000 of these people (about 300,000 households) lived in rural areas.
That so many of the closed post offices were rural is a point worth emphasizing. As stated in the 1971 Postal Reorganization Act, the law that established the Postal Service, “The Postal Service shall provide a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining. No small post office shall be closed solely for operating at a deficit, it being the specific intent of the Congress that effective postal services be insured to residents of both urban and rural communities” (39 U.S.C. 101(b))
That passage was echoed in the 2006 PAEA, section 3691, which directs the Postal Service to establish “modern service standards” with several objectives, one of which is “to preserve regular and effective access to postal services in all communities, including those in rural areas or where post offices are not self-sustaining.”
A post office, particularly a rural post office, cannot be targeted for closure simply because it’s not bringing in enough revenues to cover its costs. But the Postal Service can suspend the office for a lease or staffing issue or the condition building, and as explained in the Postal Service’s Discontinuance Guide, suspensions are one of the factors that may prompt a study to discontinue.
As for the 400 or so Zip Code areas for which Census data were not available, in 80 cases the Postal Bulletin announcement indicates that the Zip Code was being discontinued along with the post office. Apparently other Zip Codes may have dropped out of use at a later date, as indicated by the fact that a few we checked don’t show up on American FactFinder or on the Postal Service’s Zip Code look-up and the USPS Find Locations page.
The communities that lost their Zip Codes also lost a piece of their identity — one of the fears people typically express when their post office may close. That was the subject of a New York Times article back in 1976, and it’s been a recurring refrain in news articles about post office closings. In recognition of this problem, the Postal Service has generally maintained a community’s Zip Code when it discontinues the post office.
Community Post Offices
The list of 1,600 closures and suspensions does not include contract postal units (CPUs), i.e., facilities operated by private businesses, but it does include 110 community post offices (CPOs).
A community post office is a post office that had originally been an independent office operated by a USPS postmaster but that at some point got converted to a contract unit operated by a private contractor. It continues to bear the community’s name and zip code, and most people wouldn’t be able to tell the difference between a CPO and a regular USPS-operated post office. Such conversions happened many hundreds of times, and in 1980, there were 1,700 CPOs (as indicated in this GAO report).
New CPOs are rarely created anymore, and the number of CPOs goes down each year. In 2003, there were 1,450 of them. By 2007, there were about 900. As of 2016, there were just 489 CPOs remaining (as seen on this list submitted as part of the 2016 ACR). According to a filing with this year’s ACR, there are now just 465 CPOs left.
In years past, conversions and closures of CPOs were apparently treated as post office discontinuances and announced in Postal Bulletin. Our list shows 13 examples of such a conversion, i.e., an independent post office was discontinued and a community post office established in its place. In addition, the list contains 110 CPOs that were closed by discontinuance and announced in Postal Bulletin.
Some years ago, the Postal Service apparently stopped treating CPO closures like regular post office closures and started treating them like CPUs. It just terminates the contract without going through a regular discontinuance process. Since 2011, there have been no announcements of CPO discontinuances in Postal Bulletin.
The PRC has endorsed this change in USPS policy with its rulings on the appeals of several CPO closures— Alplaus, NY; Careywood, ID; Westbrookville, NY; and Rio Nido, CA. Because of the unique status of CPOs, some Commissioners issued dissenting opinions on these cases, but they haven’t been able to stop the Commission from setting precedents that will make it virtually impossible for a community to successfully appeal a CPO closing in the future. (For more about the long and contested issues concerning community post offices, see this previous post: “The USPS and PRC ponder the meaning of “post office”: The appeal on the Careywood Idaho CPO.”)
For the past few years, the Postal Service has provided the PRC with lists of CPO and CPU closings during the annual compliance review. Using those lists we’ve put together a list of 420 CPO closings that took place during fiscal years 2011 through 2016. This list is here. While we’re at it, a list of 1,870 CPU closings for 2011-2016 is here.
Data from the RAOI and POStPlan
While the Postal Service may have dropped its RAOI plan to close 3,650 post offices, about 280 of the RAOI post offices have been closed, all but 13 of them by emergency suspension.
During the PRC’s advisory opinion on the RAOI, the Postal Service presented data showing as-the-crow-flies distances between the post offices earmarked for closing and the next nearest office. Using these numbers, we find that for the 280 RAOI post offices on our list of 1,600 the average distance to another post office was about 7 miles. In 68 cases, the distance was ten miles or more. In one case, the distance was 54 miles.
Those numbers are roughly in line with the full universe of RAOI offices. James Klingenberg, a witness for the RAOI advisory opinion, presented testimony about the distance people would actually travel — as opposed to the geographic distance — to the next nearest post office were their own post office closed. He found that RAOI post offices, on average, were a driving distance of about 9 miles from the nearest post office.
While the Postal Service might save $200 million by closing the 3,700 RAOI post offices, Klingenberg estimated that approximately 16 million people would need to drive further to the post office and incur the expense for that extra driving. He figured that “the cost to society would be $232 million.” This, he concluded, “would not be a desirable financial result for society at large, much less an optimal result for postal customers.” One can assume that something similar has occurred as a result of closing 1,600 post offices: the cost savings for the Postal Service has been passed on to the public.
We also checked the list of 1,600 against the POStPlan list of 13,000 offices. One of the main purposes of POStPlan was to preserve rural post offices, but about 476 of them have closed, 400 of them by emergency suspension: 285 level-2 offices, 164 level-4s, and 26 level-6s. At least 78 of these suspensions (we don’t have a reason for all of them) were caused by staffing problems, which may be an indication of the difficulty finding someone to operate a post office for just two hours a day.
Data from the Facilities Reports and PRC appeals
Most of the post offices that have closed were relatively small in terms of square footage. Using the USPS Facilities Reports, we found facility data for about 616 post offices in leased properties. The average size was about 1,479 sq. ft. That’s in comparison to 2,100 sq. ft. for the average main post office in a leased space.
About one in four of the country’s 31,000 post offices exists in a property owned by the Postal Service, but very few of the decade’s closures have taken place in an owned property. Over the past six years, the Postal Service disposed of about 200 post office properties, but in almost every case it relocated retail services rather than suspending or discontinuing the post office.
About 80 of the closures and suspensions on the list did, however, involve a USPS-owned property. (A list is here.) About half of these post offices were modular buildings on land leased by the Postal Service, but a couple were historic post offices.
The 1935 post office in downtown Plant City, Florida, was suspended in June 2013 due to health and safety concerns involving mold and lead-based paint. It was finally discontinued in August 2017. The building is still listed for sale on the CBRE USPS Properties for Sale website. (There’s more about the Plant City office here.)
The historic post office in Stamford, Conn., another USPS-owned property, was suspended due to unsafe building conditions in September 2013, and the building was subsequently sold. The ACR 2016 suspension update indicates that the suspension was caused by a “lease expiration,” but that’s obviously an error since the Postal Service owned the building at the time. (There’s more about the Stamford story here.)
As with several other suspensions, the sudden closure of the Stamford post office was challenged in an appeal to the PRC. We checked the list of 1,600 closures against a list of appeals that the PRC has reviewed over the past decade. About 32 offices on our list were appealed, with 20 final determinations to close being affirmed, and 12 dismissed, not heard, or withdrawn. In no case did the Commission remand the final determination back to the Postal Service.
Over the past ten years, about 250 appeals were submitted to the PRC. When the Postal Service dropped the RAOI plan and replaced it with POStPlan, 190 of these post offices ended up remaining open (ten of them closed later). Overall, the appeals were rarely successful. Of the 250 appeals, in only 19 cases did the Commission remanded the final determination to close the post office back to the Postal Service for further consideration.
Alternative retail channels
Aside from the passage about rural post offices, there’s one other passage in PAEA that relates to post offices, and it’s a topic regularly considered in the PRC’s annual compliance reviews. The passage directs the Postal Service to make “plans to expand and market retail access to postal services, in addition to post offices,” including the Internet, vending machines, and contract postal units.
The meaning of this requirement is a matter of debate. Some believe it’s intended to encourage the Postal Service to adapt to consumers’ changing behaviors, while others believe the ultimate goal is to replace USPS-operated post offices with the various alternatives. In any case, the mere existence of these alternatives often figures into the PRC’s reasoning when it deals with appeals on post office closings.
Here’s a breakdown of retail revenues based on the annual updates that the Postal Service shares with the PRC (2009; 2012; 2017). Note that the number for PC Postage in FY 2017 is an estimate because the Postal Service changed its accounting methods in 2016 and no longer reports this number in the retail channels update. PC Postage revenues were revenues for 2015 were $5,579; the estimate of $6,600 million for FY 2017 is based on the percentage increase from 2014 to 2015. (Other changes in the reporting methodology are explained in this USPS filing.)
|Retail Revenue by Channel: 2009 – 2017|
|Channel/Fiscal Year/$ in millions||2009||2012||2017||Change 2009
|PC Postage (2017 is an estimate)||$1,859||$3,604||$6,600||255%|
|Stamps Only Sales by Retail Partners||$1,156||$1,226||$1,039||-10.1%|
|Automated Postal Centers (kiosks)||$550||$497||$405||-26.4%|
|Stamps by Mail/Phone/Fax||$513||$517||$78||-84.8%|
|Contract Postal Units||$453||$376||$141||-68.9%|
|Total Alternate Channels||$4,999||$6,823||$9,340||86.8%|
|Total Retail Revenue||$17,719||$17,450||$19,535||10.2%|
Revenues from alternative access channels have increased significantly since PAEA became law. According to Postal Facts, in 2007 the Postal Service brought in $4.4 billion through these alternatives; in 2015, it brought in twice that amount. As the table shows, total alternative channel revenues probably topped $9.3 billion.
Most of the increase in alternative retail revenues has been due to the growing popularity of PC Postage and Click-N-Ship, Internet-dependent channels which the Postal Service incentivizes through generous discounts.
Revenues from contract postal units have declined significantly. So have the number of contract outlets. According to this PRC Annual Compliance Determination report, in FY 2007 there were 3,131 CPUs and 895 CPOs. According to a filing for the 2017 ACR, there are now 2,249 CPUs and 465 CPOs. That represents a total decrease of about 1,300 contract units.
The number of outlets selling stamps has increased significantly, from 53,196 in 2008 to 65,000 in 2014, but the expansion doesn’t seem to have helped revenues. Stamp sales by retail partners have decreased by over 10 percent.
The percent of total retail revenues brought in at post offices has decreased from 72 percent in 2009 to 54 percent in 2016. If one excludes PC Postage — now that the Postal Service is no longer treating it as an “alternative retail channel” — the percent of total retail revenues brought in at post offices has remained constant — 80.2 percent in 2009 compared to 78.8 percent in 2017.
Post offices clearly remain the dominant source of retail revenues. And while some customers may find it cheaper and more convenient to calculate and print postage on their computer, they usually still end up going to the post office to drop off their packages.
As this report by the USPS Office of Inspector General explains, the number of people visiting the post office remains huge, something on the order of 2.7 billion visits per year.
Rather surprisingly, as a survey done by the OIG showed, “Millennials visit post offices more often than older generations, but for different purposes.” And overall, concludes the OIG, the Postal Service could be using this foot traffic information “to make better retail decisions and improve customer service, sales, and efficiency.”
Brick-and-mortar post offices remain a key part of the Postal Service’s retail infrastructure. We’re a long way from the point where it would be feasible or advisable to close thousands of them. But post offices continue to close anyway.
In November, the Postal Service suspended service at the Country Club Station (64113) in Brookside, Mo., a neighborhood in Kansas City, over a safety issue. Earlier this month, it also suspended the post office in Reasnor, Iowa (50232), probably over a lease issue. Both suspensions are “temporary,” but neither of these post offices currently appears on the USPS Find Locations website. That’s not a good sign.
(Photo credits: Top image: Plant City, Florida, Downtown Station; for other photos, click on image)