Changes to Postal Service Worry Small Businesses

April 25, 2012

The Senate has begun voting on a bill that would dramatically streamline the U.S. Postal Service (USPS) in an effort to save the agency from bankruptcy.

The USPS is currently $12 billion in debt and could run out of money as soon as August. At stake are more than 100,000 jobs, part of a postal cost-cutting plan to save some $6.5 billion a year by closing up to 252 mail-processing centers and 3,600 post offices and doing away with Saturday  and overnight delivery. 

The Postmaster General has agreed to delay necessary closings of the anticipated 3,600 post offices nationwide until May 15 in order to give Congress the opportunity to help with legislation. With that deadline less than a month away, the changes Congress makes will change the face of the USPS and will directly impact how customers get their mail and how much they pay to send snail mail. 

The bill up for consideration would preserve overnight delivery, maintain a six-day delivery for mail, and cut in half the number of mail processing centers the USPS currently wants to close -- from 252 to 125. The bill would also slow, if not stop, many post office closings by forcing the agency to consider the special needs of rural communities. It would also provide USPS with a cash infusion of roughly $11 billion, basically a refund of overpayments it made in previous years to a federal retirement fund. 

Many small businesses that rely on USPS fear that their companies will suffer if their local mail-processing and distribution centers are shut down. The Washington Post has a series that features small business owners talking about the impact of the potential changes.

Tim Smith of Papa Jazz Record Shoppe in Columbia, S.C. says:

But the success of our business model is now being threatened by proposals to end the United States Postal Service’s (USPS) Saturday public operations, and possibly close many rural post offices. Taking orders for our products online is only part of our e-commerce success. The USPS is the other essential part.

Jenifer Caplan, president of Footzyrolls, which develops and manufactures foldable shoes, and competes with well-known companies like Zappos, writes:

While we would like to continue working as much as possible with the postal service, we would be forced to adapt if the recently proposed changes are put into place. If the Saturday service is discontinued, for instance, we would have to adjust our time tables for deliveries to our customers…More importantly, an increase in rates would go directly to affect our profitability. We are constantly looking for ways to cut costs and this would just increase them, though I hope not to the point where we would have to start looking at the alternative.

Would changes to the USPS hurt your bottom line? Or do you agree that the agency has to take these steps to avoid bankruptcy? 

<- Go Back