Post Office and Retail Postal Facility Closures:
Overview and Issues for Congress
Kevin R. Kosar
Analyst in American National Government
August 7, 2009
Congressional Research Service
7-5700
www.crs.gov
R40719
CRS Report for Congress
P
repared for Members and Committees of Congress
Post Office and Retail Postal Facility Closures: Overview and Issues for Congress
Summary
In common parlance, “post office” is used to refer to a wide variety of facilities operated by the
United States Postal Service (USPS). In administrative practice, the USPS differentiates among
several categories of postal facilities. Regarding one category of its facilities, the USPS
announced in May 2009 that it was considering the closure of 3,105 of its 4,851 post office
branches and stations. These facilities provide the public with postal services, such as stamp
sales, post office boxes, and package shipping. Since the original announcement, the USPS has
indicated that the number of possible closures may be fewer than 1,000.
This report provides (1) information on this recent announcement; (2) historical data on the
number of post offices and other retail postal facilities; (3) an explanation of the legal authorities
relevant to retail postal facility closures; (4) a review of the retail postal facility closure processes,
including data on public appeals of closures, and H.R. 658’s proposed alterations to the processes;
and (5) a concluding discussion that suggests observations and possible issues for Congress.
The USPS has cited financial duress as a reason for its proposed closure of post office branches
and stations. According to the USPS, the post office branches and stations under consideration for
closure are located in metropolitan areas. The USPS has not indicated whether any employees
would lose their positions. Most postal employees are protected from layoffs by collective
bargaining agreements.
As of FY2008, the USPS had 36,065 retail postal facilities, including post offices, post office
branches and stations, community post offices, and contract postal units. This is 16.3% fewer than
existed in 1970 when the USPS was established as an independent establishment of the executive
branch. The closure of 1,000 branches and stations would reduce the current number of retail
postal facilities by 2.7%, and the number of post office branches and stations by 20.6%.
By law, the USPS does not rely on appropriations to fund its operations. It must support itself
through the sales of postal services. Congress has given the USPS considerable discretion to
decide how many post offices to erect and where to place them. The USPS also is obliged to
provide the public with adequate access to postal services.
Both federal law and the USPS’s rules prescribe a post office closure process. The U.S. Postal
Service must notify the affected public and hold a 60-day comment period prior to closing a post
office. Should it decide to close a post office, the public has 30 days to appeal the decision to the
Postal Regulatory Commission (PRC). Between FY1998 and FY2007, 25 of the approximately
676 post office closures were appealed to the PRC. The USPS uses an expedited version of this
process to close post office branches, stations, and community post offices. On January 22, 2009,
Representative Albio Sires introduced H.R. 658, which would require the USPS to employ the
more lengthy post office closure process on all retail facility closures, and expand the current
statutory public notification requirements.
Federal law requires the USPS to arrange its delivery and service network to most efficiently
serve the public. However, the proposed closures may raise a number of issues, including public
participation in the closure process, the effects on postal workers, and the possible effects of
closures on communities. Congress may wish to consider a variety of measures to address these
possible issues.
This report will be updated to reflect significant legislative action.
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Post Office and Retail Postal Facility Closures: Overview and Issues for Congress
Contents
The Post Office Closure Announcement ...................................................................................... 1
The USPS Announces Branch and Station Closures............................................................... 1
GAO Urges Retail Facility Reductions .................................................................................. 1
House Hearing on Retail Facility Closures ............................................................................ 2
The USPS Releases a List of 677 Retail Facilities to be Considered for Possible
Closure .............................................................................................................................. 3
The USPS’s Financial Challenges ......................................................................................... 5
The USPS’s Request for an Advisory Opinion....................................................................... 6
Historical Data on the Number of Retail Postal Facilities............................................................. 7
What Is a Post Office?........................................................................................................... 7
The Number of USPS Retail Postal Facilities ........................................................................ 7
Relevant Legal Authorities .......................................................................................................... 9
The USPS: A Self-Supporting, Independent Entity ................................................................ 9
The USPS’s Public Service Obligation ................................................................................ 10
Post Office Closures and the Public..................................................................................... 11
The USPS’s Retail Facilities Closure Processes ......................................................................... 12
The USPS’s Post Office Closure Process ............................................................................. 12
The USPS’s Expedited Closure Process for Other Retail Postal Facilities ............................ 13
Post Office Closure Appeals................................................................................................ 15
Disposal of a Closed USPS Retail Postal Facility ................................................................ 15
Recent Legislation .............................................................................................................. 16
Issues and Possible Options for Congress .................................................................................. 16
Figures
Figure 1. Location and Number of Post Office Branches and Stations Identified for
Possible Closure by State ......................................................................................................... 4
Figure 2. Location of Post Office Branches and Stations Identified for Possible Closure
by City..................................................................................................................................... 4
Figure 3.USPS’s Operating Income ............................................................................................. 5
Figure 4.The Number of USPS Retail Postal Facilities, FY1970-FY2008 .................................... 8
Figure 5.The Number of USPS Post Office Branches and Stations, FY1970-FY2009
(Proposed) ............................................................................................................................... 9
Figure 6.The USPS’s Post Office Closure Process ..................................................................... 13
Figure 7.PRC Disposition of Post Office Closure Appeals, FY1998-FY2007 ............................. 15
Tables
Table 1. The Number of USPS Retail Postal Facilities, FY1970 vs. FY2008................................ 8
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Post Office and Retail Postal Facility Closures: Overview and Issues for Congress
Contacts
Author Contact Information ...................................................................................................... 19
Acknowledgments .................................................................................................................... 19
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Post Office and Retail Postal Facility Closures: Overview and Issues for Congress
The Post Office Closure Announcement
The USPS Announces Branch and Station Closures
In a May 15, 2009, letter to the American Postal Workers Union, AFL-CIO (APWU), the U.S.
Postal Service (USPS) wrote,
As you know, the Postal Service has responded to dramatic decreases in mail volume, but
more needs to be done.... Like mail volume, window transactions at our retail units have
substantially declined. The Postal Service is considering consolidating operations in our
larger stations and branches…. These offices have experienced serious volume, transaction,
and revenue declines. The Postal Service will be using the current procedures that are in
place for studying the activities of an office for possible discontinuance. Many factors
including impact on employees, service standards, cost savings, customer access,
environmental impact, real estate values, and long-term needs of the service would be taken
into account during the reviews. We would expect these local manager reviews to result in a
significant increase in the number of lease terminations and/or facility disposals.1
The USPS enclosed with the letter an 87-page list of 3,105 post office branches and stations.2 (As
explained further on page 7, post office branches and stations greatly resemble post offices. These
USPS-operated facilities provide the public with postal services, such as stamp sales, post office
boxes, and package shipping.) Subsequently, the APWU has said that the USPS considered 3,243
post office branches and stations for possible closure.3
In making the announcement, the U.S. Postal Service did not indicate whether any employees
would lose their positions. Most postal employees are protected from layoffs by collective
bargaining agreements. The APWU, whose members would be affected by this action, has not
expressed any concerns over the possibility of layoffs as Article 6 of its contract with USPS
largely forbids involuntary reductions in force. 4
The USPS has said that no closures will occur before October 2, 2009.5
GAO Urges Retail Facility Reductions
Five days after the USPS contacted the APWU, Phillip Herr of the Government Accountability
Office (GAO) testified before the House Committee on Oversight and Government Reform’s
1 John W. Dockins, U.S. Postal Service, “letter to William Burrus, President, American Postal Workers Union, AFL-
CIO,” May 15, 2009, at http://www.apwu.org/news/webart/2009/09-064-consolidation-retail-090609-uspsletter.pdf.
2 To access this list, see ibid.
3 American Postal Workers Union, “APWU Web News Article #076-09, July 1, 2009,” at http://www.apwu.org/news/
webart/2009/09-076-consolidatingstations-090701.htm. The APWU has posted a list of the 3,243 facilities at
http://www.apwu.org/news/webart/2009/09-076-consolidatingstations-090701-d-list.xls.
4 Collective Bargaining Agreement Between American Postal Workers Union, AFL-CIO and U.S. Postal Service,
November 21, 2006-November 20, 2010 (Washington: APWU, 2006), pp. 9-18, at http://www.apwu.org/dept/ind-rel/sc/
APWU%20Contract%202006-2010.pdf.
5 Direct Testimony of Alice M. Vangorder on Behalf of the United States Postal Service, Postal Regulatory
Commission Docket N2009-1, p. 11, at http://www.prc.gov/Docs/63/63567/FINAL.VANGORDER.W.ATTACH.pdf.
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Post Office and Retail Postal Facility Closures: Overview and Issues for Congress
Subcommittee on Federal Workforce, Postal Service, and the District of Columbia.6 He reported
that the USPS had “made progress in expanding the alternatives to traditional post offices and
retail postal branches,” which the Postal Accountability and Enhancement Act of 2006
encouraged (PAEA; P.L. 109-435; 120 Stat. 3221). As of February 2008, customers could access
stamps and postal services at 71,555 grocery stores, retail outlets, and self-serve kiosks. The
USPS earned approximately 25% of its retail revenue through these retail outlets.7
However, Herr said that the USPS had not reduced its number of retail postal facilities
sufficiently:
Rightsizing [the] USPS’s retail and mail processing networks is needed to eliminate excess
capacity, improve efficiency that is critical to maintaining affordable postal rates, and
facilitate streamlining [the] USPS’s workforce, which generates close to 80 percent of its
costs. Excess capacity has grown with unprecedented declines of mail volume, which are
projected to continue through fiscal year 2010.... [A]s its mail volumes decline, [the] USPS
does not have sufficient revenues to cover the growing costs of providing service to new
residences and businesses while also maintaining its large network of retail and processing
facilities.8
House Hearing on Retail Facility Closures
The Subcommittee on Federal Workforce, Postal Service, and the District of Columbia examined
the USPS’s proposed closure of retail postal facilities in a hearing on July 30, 2009.9 In his
submitted testimony, Jordan M. Small, Vice President, USPS Network Operations, stated,
In our review of stations and branches, we began the review with some 3,200 locations that
handle the most retail transactions and the most deliveries. We anticipate that out of these
3,200 stations and branches, under 1,000 offices could be considered as viable candidates to
study further. No decisions will be made regarding which, if any, facilities will be
consolidated until these reviews are finalized, and we have incorporated a community
notification process into the review.10
Small also said in response to a question during the hearing that there would be no layoffs.
6 For witness statements, see U.S. Congress, House Committee on Oversight and Government Reform, Subcommittee
on Federal Workforce, Postal Service, and the District of Columbia, Nip and Tuck: The Impact of Current Cost Cutting
Efforts on Postal Service Operations and Network, May 20, 2009, at http://federalworkforce.oversight.house.gov/
story.asp?ID=2444.
7 Statement of Phillip Herr, Director, Physical Infrastructure Issues, Government Accountability Office, U.S. Postal
Service: Network Rightsizing Needed to Help Keep USPS Financially Viable, GAO-09-674-T (Washington: GAO, May
20, 1009), at http://www.gao.gov/new.items/d09674t.pdf, pp. 6-8.
8 Ibid., pp. 3-4.
9 See http://federalworkforce.oversight.house.gov/story.asp?ID=2561 for a list of witnesses and their submitted
testimony.
10 Statement of Jordan M. Small, Vice President, USPS Network Operations in U.S. Congress, House Committee on
Oversight and Government Reform, Subcommittee on Federal Workforce, Postal Service, and the District of Columbia,
Making Sense of It All: An Examination of USPS’s Station and Branch Optimization Initiative and Delivery Route
Adjustments, hearing, 111th Congress, 1st sess., at http://federalworkforce.oversight.house.gov/documents/
20090730130955.pdf.
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Phillip Herr reiterated GAO’s view that the USPS needed to reduce the number of retail facilities
as part of a “broad restructuring” to address its financial challenges.11 Some other witnesses
concurred that the USPS should reduce the number of its retail facilities. Arthur B. Sackler,
Executive Director, National Postal Policy Council, an organization representing large mailers,
called the closures “necessary not only in the short term, but also the longer term.” 12
Other witnesses, though, expressed concerns that the closures could have negative effects on
access to postal services and postal workers. Frederic Rolando, President of the National
Association of Letter Carriers, AFL-CIO, asked Congress to
ensure that the Postal Service does not make structural decisions that will do more harm than
good over the long run. Down-sizing to meet depression-level demand [by mailers] without
considering the long-term impacts on the ability of the Postal Service to meet new demands
when the economy recovers would be short-sighted.13
The USPS Releases a List of 677 Retail Facilities to be Considered
for Possible Closure
On July 28, 2009, the USPS submitted a list to the PRC of 677 retail facilities that would be
studied for possible closure.14 Figure 1 depicts the states in which these 677 facilities are located,
and the number of facilities to be considered for possible closure in each state. Figure 2 depicts
the location of the cities in which these facilities are located.
11 Statement of Phillip Herr, Director, Physical Infrastructure Issues, Government Accountability Office, U.S. Postal
Service: Broad Restructuring Needed to Address Deteriorating Finances, GAO-09-790T (Washington: GAO, July 30,
2009), at http://www.gao.gov/new.items/d09790t.pdf, pp. 4-5.
12 Statement of Arthur B. Sackler, Executive Director, National Postal Policy Council, in U.S. Congress, House
Committee on Oversight and Government Reform, Subcommittee on Federal Workforce, Postal Service, and the
District of Columbia, Making Sense of It All, p. 2, at http://federalworkforce.oversight.house.gov/documents/
20090730130419.pdf.
13 Statement of Frederic Rolando, President of the National Association of Letter Carriers, AFL-CIO, in ibid., p. 2, at
http://federalworkforce.oversight.house.gov/documents/20090730130525.pdf.
14 U.S. Postal Service, “Stations/Branches Identified for Full Study,” July 28, 2009, submitted to the Postal Regulatory
Commission, at http://www.prc.gov/Docs/63/63990/SBOC%20Full%20Study%20July%20List.pdf.
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Post Office and Retail Postal Facility Closures: Overview and Issues for Congress
Figure 1. Location and Number of Post Office Branches and Stations Identified for
Possible Closure by State
Source: Congressional Research Service, based upon the list of 677 post office branches and stations submitted
to the Postal Regulatory Commission by the U.S. Postal Service on July 28, 2009.
Figure 2. Location of Post Office Branches and Stations Identified for Possible
Closure by City
Source: Congressional Research Service, based upon the list of 677 post office branches and stations submitted
to the Postal Regulatory Commission by the U.S. Postal Service on July 28, 2009.
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Post Office and Retail Postal Facility Closures: Overview and Issues for Congress
The USPS has not said whether facilities in addition to the 677 depicted above will be studied for
possible closure.
The USPS’s Financial Challenges
The USPS is experiencing significant financial challenges.15 It lost $5.3 billion in FY2007 and
$2.8 billion in FY2008 (Error! Reference source not found.3). This fiscal year, the USPS’s
operating costs have exceeded revenues by $4.2 billion thus far.16 These operating income
shortfalls are a result of significantly increased operating costs, which are attributable in part to
the Postal Accountability and Enhancement Act of 2006.17 These losses also are the product of
flattening operating revenues, the result of a drop in mail volume and attendant postage
purchases.18
Figure 3.USPS’s Operating Income
Operating Revenue
Operating Expense
$82.5
) $77.5
ons
illi
B $72.5
(
rs
lla
o $67.5
D
$62.5
2005
2006
2007
2008
Year
Source: U.S. Postal Service, Annual Reports 2007 and 2008, p. 3.
The USPS’s statutory debt limit is $15 billion (39 U.S.C. 2005(a)(2)(C)). Between FY2005 and
FY2008, the USPS’s debt rose from $0 to $7.2 billion. The USPS has said it may run out of cash
in September 2009.19
15 For further details, see Government Accountability Office, U.S. Postal Service: Escalating Financial Problems
Require Major Cost Reductions to Limit Losses, GAO-09-475T (Washington: GAO, March 25, 2009).
16 U.S. Postal Service, “Postal Service Ends Third Quarter with $2.4 Billion Loss,” press release, August 5, 2009, at
http://www.usps.com/communications/newsroom/2009/pr09_066.htm.
17 PAEA requires the USPS to prefund its future retirees’ health benefits at a cost of approximately $5.6 billion per
year. U.S. Postal Service, Annual Report 2008 (Washington: USPS, 2008), p. 20.
18 Between FY2006 and FY2008, mail volume declined from 213.1 billion mail pieces to 202.7 billion mail pieces.
U.S. Postal Service, “Form 10-K,” November 26, 2008, p. 13.
19 U.S. Postal Service, “Postal Service Ends Second Quarter with $1.9 Billion Loss,” press release, May 6, 2009.
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On July 28, 2009, GAO added the USPS’s financial condition “to the list of high-risk areas
needing attention by the Congress and the executive branch.”20
The USPS’s Request for an Advisory Opinion
The USPS has asked the Postal Regulatory Commission (PRC) for an advisory opinion to
determine whether its proposed closure of the post office branches and stations “would constitute
“a substantially nationwide change in the nature of postal services, within the meaning of 39
U.S.C. 3661(b).”21 This portion of federal law reads,
When the Postal Service determines that there should be a change in the nature of postal
services which will generally affect service on a nationwide or substantially nationwide
basis, it shall submit a proposal, within a reasonable time prior to the effective date of such
proposal, to the Postal Regulatory Commission requesting an advisory opinion on the change
(39 U.S.C. 3661(b)).
The USPS’s request does not make clear precisely how many branch and station post offices will
be considered for possible closure. It states that the retail facilities under review constitute
“approximately two-thirds of the universe of over 4,800 postal stations and branches nationwide,”
which would be 3,168.22
The PRC has initiated Docket No. N2009-1 “to provide a public hearing and issue an advisory
opinion on the national service implications” of the USPS’s proposed closures.23 According to 39
U.S.C. 3661(c), the PRC’s hearing permits participation by “the Postal Service, users of the mail,
and an officer of the Commission [PRC] who shall be required to represent the interests of the
general public.” Those who wish to participate must file a request by July 28, 2009.24
20 Government Accountability Office, Restructuring the U.S. Postal Service to Achieve Sustainable Financial Viability,
GAO-09-937SP (Washington: GAO, July 28, 2009), p. 1, at http://www.gao.gov/press/d09937sp.pdf.
21 Daniel J. Foucheaux, Chief Counsel, Ratemaking, U.S. Postal Service, “Request for an Advisory Opinion on Postal
Services: Station and Branch Optimization and Consolidation Initiative, 2009,” July 2, 2009, at http://www.prc.gov/
Docs/63/63556/FINAL.Request.pdf, p. 1. The USPS has stated that it is not necessarily required by law to seek this
advisory opinion. See Ibid., p. 2, footnote 1.
22 Ibid., p. 6.
23 Postal Regulatory Commission, “PRC Initiates Docket to Review USPS Retail Network Optimization Plan,” press
release, July 10, 2009. The docket may be found at http://www.prc.gov/prc-pages/library/dockets.aspx?activeview=
DocketView&docketType=Single&docketid=N2009-1.
24 For further details, see Postal Regulatory Commission, “Notice and Order Concerning a Postal Service Request for
an Advisory Opinion on a Plan to Optimize the Retail Network,” July 10, 2009, at http://www.prc.gov/Docs/63/63656/
Order_No_244_Final.pdf.
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Historical Data on the Number of Retail Postal
Facilities
What Is a Post Office?
Colloquially, the term “post office” often is employed to refer to any place where stamps are sold
and postal services are provided. Post offices, branches, stations, and community post offices all
offer to the public a range of postal services. They are where many individuals go to buy stamps
and ship packages.
The USPS, however, administratively differentiates the types of retail postal facilities that
conduct these same activities:
main post office - The basic organizational unit of the USPS. Generally, each post office has
primary responsibility for collection, delivery, and retail operations in a specific geographic
area. [Also called post office.]
post office branch - A unit of a main post office that is outside the corporate limits of the city
or town of the main post office. [Also called classified branch.]
post office station - A unit of a main post office that is within the corporate limits of the city
or town of the main post office. [Also called classified station]. 25
The USPS also provides postal services to customers through privately operated facilities:
community post office - A contract postal unit that provides service in small communities
where independent post offices have been discontinued. [It] bears its community’s name and
ZIP Code as part of a recognized address.
contract postal unit - A postal unit that is a subordinate unit within the service area of a main
post office. It is usually located in a store or place of business and is operated by a contractor
who accepts mail from the public, sells postage and supplies, and provides selected special
services (for example, postal money order or registered mail).26
For the purpose of this report, the term “USPS retail postal facilities” will encompass all five of
the aforementioned postal facilities—post offices, post office branches, post office stations,
community post offices, and contract postal units.
The Number of USPS Retail Postal Facilities
The USPS’s annual reports contain tabulations of the number of USPS retail postal facilities in
existence at the end of each fiscal year. Data on the number of facilities from the FY1970 through
FY2008 annual reports are presented in Error! Reference source not found.4. Over time, the
USPS has altered the terms used to refer to some of these facilities. Additionally, the USPS’s
25 U.S. Postal Service, Publication 32: Glossary of Postal Terms (Washington: USPS, July 5, 2007), at
http://www.usps.com/cpim/ftp/pubs/pub32/pub32h_p.html.
26 Ibid., at http://www.usps.com/cpim/ftp/pubs/pub32/pub32a_g.html.
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annual reports have disaggregated post office branches from post office stations only since
FY2004. Hence, Error! Reference source not found.4 and Table 1 present the retail postal
facilities data as compiled into three categories: post offices (POs), post office branches and
stations (POBs and POSs), and community post offices and contract postal units (CPOs and
CPUs).
Figure 4.The Number of USPS Retail Postal Facilities, FY1970-FY2008
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
POs
POBs and POSs
CPOs and CPUs
Source: U.S. Postal Service, Annual Reports, 1970-2008.
Error! Reference source not found.4 and Table 1 indicate that the total number of USPS retail
postal facilities has declined steadily. 27 In FY1970, the USPS had 43,112 retail facilities; in
FY2008 it had 36,065—16.3% fewer. The number of POs has dropped 14.9%; and the number of
CPUs and CPOs has declined 45.0%. Meanwhile, the number of POBs and POSs has increased
25.4%.
Table 1. The Number of USPS Retail Postal Facilities, FY1970 vs. FY2008
Retail Postal Facility Type
1970
2008
% Change
Post Offices
32,002
27,232
-14.9%
Post Office Branches and Post
Office Stations
3,869 4,851 25.4%
Community Post Offices and
Contract Postal Units
7,241 3,982 -45.0%
27 These data should not be interpreted to mean that customer access to postal services has declined. Customer access to
postal services depends on many variables. For example, these data exclude non-USPS retail outlets that provide postal
services, such as grocery stores that sell postage stamps. On USPS’s retail access, see Government Accountability
Office, USPS Needs to Clearly Communicate How Postal Services May Be Affected by Its Optimization Plans, GAO-
04-803, July 13, 2004, at http://www.gao.gov/new.items/d04803.pdf.
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Retail Postal Facility Type
1970
2008
% Change
Total 43,112
36,605
-16.3%
Source: U.S. Postal Service, Annual Reports, 1970-2008.
Figure 5.The Number of USPS Post Office Branches and Stations,
FY1970-FY2009 (Proposed)
7,000
6,000
5,000
r
e 4,000
mb 3,000
Nu
2,000
1,000
0
70
72
74
76
78
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
Year
Source: U.S. Postal Service, Annual Reports, 1970-2008.
Error! Reference source not found.5 above depicts the magnitude of the USPS’s possible closure
of 1,000 branches and stations. Were the USPS to close all 1,000 facilities, it would amount to a
20.6% reduction in POBs and POSs, from 4,851 to 3,851.
Additionally, such a reduction would lower the number of retail postal facilities 2.7%, from
36,605 to 35,605. The closure of 1,000 post office branches and stations also would be a dramatic
increase from the number of closures in recent years. According to the USPS, it closed a total of
96 post office branches and stations between FY2005 and FY2008, an average of 24 per year.28
Relevant Legal Authorities
The USPS: A Self-Supporting, Independent Entity
The USPS was established in 1971 by the Postal Reorganization Act (PRA; P.L. 91-375; 84 Stat.
725). Hitherto, postal services had been provided by the U.S. Post Office Department (USPOD),
28 Direct Testimony of Alice M. Vangorder on Behalf of the United States Postal Service, Postal Regulatory
Commission Docket N2009-1, p. 6, at http://www.prc.gov/Docs/63/63567/FINAL.VANGORDER.W.ATTACH.pdf.
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a government agency that received annual appropriations from Congress. Members were involved
in many aspects of the USPOD’s operations, including the selection of managers (e.g.,
postmasters) and the pricing of postal services. Under this configuration, the Post Office had
operational difficulties and developed a reputation for incompetence and corruption.29
PRA abolished USPOD and replaced it with the U.S. Postal Service, an “independent
establishment of the executive branch” (39 U.S.C. 201). The USPS is a marketized government
agency that has far greater freedom to run its operations than the former Post Office
Department.30 It does not rely on appropriations for its operating revenue.31
Congress assigned the USPS the “general duty” to “maintain an efficient system of collection,
sorting, and delivery of the mail nationwide” (39 U.S.C. 403(b)). In order to carry out this
obligation, the law gives the USPS the “specific powers” to
• “provide for the collection, handling, transportation, delivery, forwarding,
returning, and holding of mail, and for the disposition of undeliverable mail” (39
U.S.C. 404(a)(1)); and
• “determine the need for post offices, postal and training facilities and equipment,
and ... provide such offices, facilities, and equipment as it determines are needed”
(39 U.S.C. 404(a)(13)). 32
The USPS’s Public Service Obligation
In enacting the PRA, Congress sought to establish the USPS as a financially self-sufficient
governmental entity, but one that also would serve the public satisfactorily. The USPS’s public
service obligations are located in the PRA’s chapters on “postal policy” (39 U.S.C. 101) and the
USPS’s “general authority” (39 U.S.C. 403).
The nation’s postal policies contain language relevant to the issue of retail postal facilities:
• “The United States Postal Service shall be operated as a basic and fundamental
service provided to the people by the Government of the United States,
authorized by the Constitution, created by Act of Congress, and supported by the
people. The Postal Service shall have as its basic function the obligation to
provide postal services to bind the Nation together through the personal,
educational, literary, and business correspondence of the people. It shall provide
29 The view of USPOD as an agency riddled with patronage and scandal began long ago. For example, Joseph L.
Bristow, who served as an assistant postmaster general from 1897 to 1905, provides accounts in his book, Fraud and
Politics at the Turn of the Century (New York: Exposition Press, 1952).
30 The term “marketization” refers to the redesign of a government agency in order to make it provide goods and
services in the manner of a private firm. On marketization as an alternative to privatization, see CRS Report RL33777,
Privatization and the Federal Government: An Introduction, by Kevin R. Kosar, pp. 23-29.
31 Congress does provide an annual appropriation to the USPS to compensate it for the revenue it forgoes in providing,
at congressional direction, free mailing privileges to the blind and overseas voters. For further information on the USPS
and the appropriations process, see CRS Report RL34523, Financial Services and General Government (FSGG):
FY2009 Appropriations, coordinated by Garrett Hatch, pp. 58-61.
32 Similarly, Congress requires the USPS in “selecting modes of transportation, the Postal Service shall give highest
consideration to the prompt and economical delivery of all mail” (39 U.S.C. 101(f)).
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prompt, reliable, and efficient services to patrons in all areas and shall render
postal services to all communities” (39 U.S.C. 101(a)); and
• “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)).
Congress assigned the USPS the general duties to
• “receive, transmit, and deliver throughout the United States, its territories and
possessions ... written and printed matter, parcels, and like materials and provide
such other services incidental thereto as it finds appropriate to its functions and in
the public interest... (39 U.S.C. 403(a))”; and
• “establish and maintain postal facilities of such character and in such locations,
that postal patrons throughout the Nation will, consistent with reasonable
economies of postal operations, have ready access to essential postal services”
(39 U.S.C. 403(b)).
Congress has underscored the USPS’s duty to serve less densely populated areas by including a
provision in annual appropriation laws that reads, “none of the funds provided in this Act shall be
used to consolidate or close small rural and other small post offices in [this] fiscal year.”33
Post Office Closures and the Public
Federal postal law sets forth the basic rules by which the USPS may proceed to close a post
office. The USPS must “provide adequate notice of its intention to close or consolidate such post
office at least 60 days prior to the proposed date of such closing or consolidation to persons
served by such post office to ensure that such persons will have an opportunity to present their
views” (39 U.S.C. 404(d)(1)).
In deciding whether to close a post office, the USPS must consider
(i) the effect of such closing or consolidation on the community served by such post office;
(ii) the effect of such closing or consolidation on employees of the Postal Service employed
at such office;
(iii) whether such closing or consolidation is consistent with the policy of the Government ...
that 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;
(iv) the economic savings to the Postal Service resulting from such closing or consolidation;
and
33 For example, see P.L. 110-161; 121 Stat. 2013.
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(v) such other factors as the Postal Service determines are necessary (39 U.S.C.
404(d)(2)(A)).
If the USPS decides to move forward with the closure, it must notify the persons served by the
post office of its decision and the findings used to arrive at this decision. The USPS must wait at
least 60 days before proceeding with the closure, and any person served by the post office slated
for closure may appeal the closure to the PRC, which has 120 days to consider the appeal.
The PRC may fault the USPS’s decision to close a post office only if the PRC finds the decision
to be “(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the
law; (B) without observance of procedure required by law; or (C) unsupported by substantial
evidence on the record” (39 U.S.C. 404(d)(5)). The PRC may require the USPS to reconsider its
decision, but the ultimate authority to close a post office rests with the USPS.
The USPS’s Retail Facilities Closure Processes
The USPS’s Post Office Closure Process
The general public probably does not see much difference between the various types of retail
postal facilities. Indeed, in her filing with the PRC, the USPS’s Alice Vangorder wrote the
following of the USPS’s differentiation between post offices and other retail postal facilities:
These important facility designations and administrative relationships often do not matter to
members of the general public. In the common vernacular, virtually every postal facility
offering retail services is referred to as a ‘post office.’ And the Postal Service does not
always clearly communicate these differences.34
The USPS’s administrative differentiation of these retail postal facilities has at least one major
consequence to the USPS’s customers—the closure process differs. The USPS uses one closure
process for post offices, and another for other retail postal facilities.
The Postal Operations Manual (POM) “sets forth the policies, regulations, and procedures of the
Postal Service governing retail, philatelic, collection, mail processing, transportation, delivery,
and vehicle operations.”35 It contains many of the rules that the USPS has adopted to implement
federal postal laws.36
The POM’s Section 123.6 provides the process for closing a post office.37 It requires the USPS to
provide public notice, and to receive public comments for 60 days. The USPS then must review
the comments and issue a decision, after which anyone who is regularly served by the post office
34 “Direct Testimony of Alice M. Vangorder on Behalf of the United States Postal Service,” Postal Regulatory
Commission, Docket No. N2009-1, p. 4, footnote 2, at http://www.prc.gov/Docs/63/63567/
FINAL.VANGORDER.W.ATTACH.pdf.
35 U.S. Postal Service, Postal Operations Manual (Washington: December 18, 2008), p. i.
36 On the rulemaking process generally, see CRS Report RL32240, The Federal Rulemaking Process: An Overview, by
Curtis W. Copeland.
37 These procedures also may be found in U.S. Postal Service, Post Office Discontinuance Guide, Handbook PO-101
(Washington: USPS, June 2004), at http://www.prc.gov/Docs/63/63880/Handbook%20PO%20101.pdf.
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in question may appeal the proposed closure to the Postal Regulatory Commission.38 The PRC
has 120 days to determine the merits of the appeal (Figure 6).
Figure 6.The USPS’s Post Office Closure Process
Source: Reproduced from U.S. Postal Service, Postal Operations Manual, Section 123.12, p. 12.
The USPS’s Expedited Closure Process for Other Retail Postal
Facilities
Section 123.611 of the POM on “post office discontinuance” states that the above process only
applies to “any proposal to replace a Post Office with a community Post Office, station, or branch
by consolidation with another Post Office and any proposal to discontinue a Post Office without
providing a replacement facility.”39
In contrast, Section 123.8 of the POM treats “station, branch, and community post office
discontinuance.”40 It does not require public notification or provide an appeals process. Instead, a
USPS district manager must produce written justification to the USPS’s vice president for
delivery and retail, who may approve or disapprove the decision. According to the POM, the
process concludes with the filing of PS Form 1362, Post Office Status Change Report, a
document that the USPS forwards to its accounting service center in St. Louis, Missouri.
38 This process is for non-emergency closures of post offices. Section 123.7 of the POM provides the USPS’s approach
to the emergency suspension of service at a post office.
39 U.S. Postal Service, Postal Operations Manual, p. 11.
40 It is unclear whether this policy applies to the closure of contract postal units.
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Although the POM does not explicitly say so, it would appear that the USPS holds that 39 U.S.C.
404(d) on post office closures does not apply to post office branch and station closures. This
interpretation is substantiated by the following statement from the USPS’s Post Office
Discontinuance Guide:
Although thorough investigation and customer participation are encouraged in the
discontinuance of a classified station, branch, or a community Post Office (CPO), the formal
process followed in the discontinuance of independent Post Offices is not required.41
In 2006, the Postal Rate Commission, the predecessor of the Postal Regulatory Commission,
considered a USPS motion to dismiss the appeal of a post office closure case involving a post
office station.42 The USPS argued that the 39 U.S.C. 404(d) did not apply in this instance because
the law’s use of the term “post office” applied only to
an independent post office, which is a facility occupied and immediately supervised by a
postmaster, and not the closing or consolidation of a station, branch, contract unit, or other
subordinate facility under the administrative supervision of a post office.43
The PRC responded that it had “repeatedly rejected” this argument since 1978.44 For the purposes
of 39 U.S.C. 404(d), it stated, the term “post office” should be defined in “its ordinary sense” as a
“fixed retail facility serving the public and acting as a point of origin for delivery routes.”45
The USPS has developed an expedited closure process for post office branches, stations, and
community post offices. In one of its submissions to the PRC, the USPS has said that it “has in
place a longstanding process through which District offices routinely initiate studies and submit
proposals to [USPS’s] Headquarters for the discontinuance of operations in a particular retail
station or branch.”46 This document carries a “process flowchart” that indicates the USPS
provides the public with a 20-day comment period, and that no appeals are permitted.47
Similarly, the APWU has made publicly available a June 2009 USPS document stating that an
affected community is given 20 days to comment on a proposed post office branch or post office
station closure, but that no appeal is permitted.48 This document suggests that the post office
closure process typically takes 100 days (if no appeal if filed), and that the discontinuance of
other USPS retail facilities takes only 60 days.
41 U.S. Postal Service, Post Office Discontinuance Guide, p. 55.
42 Postal Rate Commission, “Order Denying Postal Service Motion to Dismiss and Remanding for Further
Consideration,” Docket No. A2006-1, September 29, 2006, at http://www.prc.gov/
(S(n1s0xjy3u40bmm55tcccwo55))/Docs/53/53679/A2006-1Decision.pdf.
43 U.S. Postal Service, “Motion to Dismiss Proceeding,” Docket No. A2006-1, July 26, 2006, p. 4, at
http://www.prc.gov/(S(n1s0xjy3u40bmm55tcccwo55))/Docs/51/51287/Motion_to_Dismiss.pdf.
44 Postal Rate Commission, “Order Denying Postal Service Motion to Dismiss and Remanding for Further
Consideration,” p. 5.
45 Ibid., p. 6.
46 Direct Testimony of Kimberly I. Matalik on behalf of the United States Postal Service, Postal regulatory
Commission Docket No. N2009-1, at http://www.prc.gov/Docs/63/63568/FINAL.MATALIK.TESTIMONY.pdf, p. 3.
47 Ibid., p. 12.
48 U.S. Postal Service, “Station/Branch Optimization and Consolidation,” (Washington: USPS: June 2009), p. 3, at
http://www.apwu.org/news/webart/2009/09-076-consolidatingstations-090701-c-uspsbriefing.pdf.
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Post Office Closure Appeals
Appeals of post office closures are rare. According to the PRC, it received 25 appeals between
FY1998 and FY2007. The number of post offices dropped from 27,952 to 27,276 during this
period, so the USPS closed at least 676 post offices.49 This means that at most 3.7% of post office
closures were appealed to the PRC.
When it receives an appeal, the PRC may dispose of it in three ways; it may
1. affirm the USPS’s proposed closure as in accordance with the law;
2. dismiss the case for lack of jurisdiction; or
3. remand the case to the USPS for reconsideration.
The appellant also may withdraw the case, thereby relieving the PRC of making a determination.
Error! Reference source not found.7 indicates that the PRC remanded the proposed closure for
reconsideration by the USPS in three instances.
Figure 7.PRC Disposition of Post Office Closure Appeals, FY1998-FY2007
19
20
18
16
14
12
10
8
6
3
4
2
1
2
0
Affirmed
Lacked
Remanded
Withdrawn
Jurisdiction
Source: Postal Regulatory Commission.
Disposal of a Closed USPS Retail Postal Facility
By law, the USPS may
enter into and perform contracts, execute instruments, and determine the character of, and
necessity for, its expenditures.... acquire, in any lawful manner, such personal or real
property, or any interest therein, as it deems necessary or convenient in the transaction of its
business; to hold, maintain, sell, lease, or otherwise dispose of such property or any interest
49 As noted earlier, data on the number of post offices closed and opened each year are unavailable. If the USPS opened
any new post offices between FY1998 and FY2007, then the number of closures would be higher than 676.
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therein.... [and] to construct, operate, lease, and maintain buildings, facilities, equipment, and
other improvements on any property owned or controlled by it (39 U.S.C. 401(3)-(6)).
The USPS has sited retail facilities in spaces that it leased from other parties as well as on its own
properties. After the USPS closes a facility in a rented space, it clears out its property and
terminates its lease. After the USPS shutters a retail postal facility on property that it owns,
“Postal Service policy is to dispose of excess real property under the terms and conditions that
provide the greatest value to the Postal Service. Disposition may be by sale, exchange, outlease,
sublease, or by other means determined to be in the best interest of the Postal Service.”50
Recent Legislation
On January 22, 2009, Representative Albio Sires introduced H.R. 658, which would alter the
statutory post office closure process. As of July 24, 2009, 74 Members of Congress have
cosponsored H.R. 658. The bill was referred to the House Committee on Oversight and
Government Reform’s Subcommittee on Federal Workforce, Post Office, and the District of
Columbia.
H.R. 658 would reduce the USPS’s discretion to close retail postal facilities. In effect, the bill
would require the USPS to apply the POM’s section 123.6 post office discontinuance process to
post office branches, stations, and other USPS-operated retail postal facilities. H.R. 658 also
would expand the public notification provisions by requiring the USPS to
• notify the affected public of the possible closure of a facility via newspapers and
mail, and invite public comment for 90 days;
• conduct a study prior to the closure of a facility, and in the event of a decision to
proceed with a closure, publish the results of this study in the facility under
consideration, and notify affected members of the public of this posting via mail;
and
• post a copy of its decision in the post office under consideration, and in the event
of a decision to discontinue a facility, notify the public via mail of its rights to
appeal the decision to the PRC.
H.R. 658 also would strike the requirement in 39 U.S.C. 404(d)(2)(A)(4) that the USPS consider
in its decision to close a post office “the economic savings to the Postal Service resulting from
such closing or consolidation.”
H.R. 658 is a revision of a bill from the 110th Congress—H.R. 6217, which Representative Sires
introduced on June 9, 2008. One hundred Members cosponsored that measure.
Issues and Possible Options for Congress
As noted earlier, Congress established the USPS as
50 U.S. Postal Service, Facilities Guide to Real Property Acquisition and Related Services, Handbook Re-1
(Washington: USPS, October 2008), p. 15, at http://www.usps.com/cpim/ftp/hand/re1.pdf.
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a basic and fundamental service provided to the people by the Government of the United
States, authorized by the Constitution ... and supported by the people. The Postal Service
shall.... provide prompt, reliable, and efficient services to patrons in all areas and shall render
postal services to all communities (39 U.S.C. 101(a)).
Intending the USPS to operate as a financially self-supporting commercial entity, Congress
authorized it to arrange its delivery and service network to most efficiently serve the public. Yet,
Congress also assigned the USPS the duty to offer “prompt, reliable, and efficient postal services
to all communities.”
The USPS’s recent financial challenges have illuminated the inherent tension in this model for
delivering public services. In an attempt to balance its flattening operating revenues and
increasing operating costs, the USPS has undertaken a variety of cost-cutting measures. For
example, the USPS has reduced its total employment by nearly 41,000 persons in the past five
years, from 805,796 (FY2004) to 765,088 (FY2008).51 The USPS now is undertaking more
significant reductions to its overhead, including the closure of post office branches and stations.
The USPS’s possible closure of 1,000 post office branches and stations prompts a number of
observations and suggests some possible issues that Congress may wish to examine.
• To directly address possible public discontent over retail postal facility closures,
Congress has at least two direct policy options.52 It could either amend law to
forbid the closures, or it could enact permanent appropriations to cover the cost
of keeping open all or some portion of the USPS’s retail postal facilities. Both of
these measures would be substantial departures from current postal law and
policy, which designed the USPS as an independent and financially self-
sustaining entity.
• Congress also may devise other policies to avert retail postal facility closures. If
the root cause for the USPS’s movement to shutter branches and stations is its
financial troubles, Congress might take actions to ameliorate the USPS’s deficits,
thereby relieving the Postal Service of the need to shutter retail postal facilities.
GAO has suggested a handful of cost-cutting suggestions, such as reducing the
frequency of mail delivery from six to five days, raising the USPS’s statutory
debt cap, and lowering the USPS’s annual payment to its future retiree health
benefits fund.53 Additionally, the PRC has found that the USPS carries some
types of mail at postage rates that are below their costs.54 Congress may wish to
51 U.S. Postal Service, Annual Report 2008 (Washington: USPS, 2008), p. 64. Additionally, the USPS recently reported
that efforts to “match work hours to reduced volume have resulted in a work-hour decline of 58 million hours–the
equivalent of a reduction of 33,000 full-time employees–in the first half of FY2009, despite an increase in the number
of delivery points by 1.1 million from the same period last year.” U.S. Postal Service, “Postal Service Ends Second
Quarter with $1.9 Billion Loss,” at http://www.usps.com/communications/newsroom/2009/pr09_047.htm.
52 See Government Accountability Office, U.S. Postal Service: Network Rightsizing Needed to Help Keep USPS
Financially Viable, pp. 11-12.
53 GAO, U.S. Postal Service: Networking Rightsizing Needed to Help Keep USPS Financially Viable, pp. 11-12. On 6
day mail delivery, see CRS Report R40626, The U.S. Postal Service and Six-Day Delivery: Issues for Congress, by
Wendy R. Ginsberg.
54 Postal Regulatory Commission, Annual Compliance Determination (Washington: PRC, March 30, 2009), pp. 5-6, at
http://www.prc.gov/Docs/62/62784/ACD Report_2008_FINAL.pdf.
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examine the reasons for these disparities and consider policies to ameliorate
them.
• The USPS has cited financial duress as an impetus for the possible closure of
1,000 post office branches and stations. However, the USPS has said that it
would not close any of these facilities before October 2, 2009—after the start of
FY2010. It would appear, then, that these closures will not ameliorate the USPS’s
FY2009 cash shortage. The USPS also has not said how much money it may save
from this undertaking. Congress may wish to ask the USPS what its projected
savings are and when these savings might be realized.
• The USPS has not said whether any employees at closed retail facilities will lose
their jobs. Most, however, probably will be offered positions at new facilities. It
is unclear how many employees will want to accept these transfers. For example,
an employee may be reassigned to a facility that is located a great distance from
his former post office branch or station. Also, it is unclear whether these transfers
might create collective bargaining issues.55 Congress may wish to solicit the
opinions of the USPS and the leaders of affected employees on these matters. 56
• Whenever the USPS moves to close a retail postal facility, there is the potential
for public concern over a decline in the adequacy of postal services. Additionally,
some members of the public may view their post offices as an integral part of
their communities, and they may turn to their Members of Congress to ask for the
protection of their postal facilities from closure. Both Congress and the USPS
may wish to devise steps to prepare for public inquiries. Furthermore, the USPS
might wish to provide affected communities with clear standards for what
constitutes adequate retail service under federal law, and indicate how the USPS
will meet those standards after closing retail facilities. In addition, Congress may
wish to require the USPS to provide it with periodic reports to show that the
USPS is providing adequate service to areas affected by postal facility closures.
• The USPS suggests that much of the public probably does not understand the
difference between post offices and other retail postal facilities, and the differing
processes for their closure and options for public participation. Thus, should the
USPS’s large scale postal facility closure proposal go forward, there may be
public confusion and duress. Congress and the USPS may wish to consider
whether the USPS should be permitted to continue to use two different retail
postal facility closure processes.
• The small number of appeals of post office closures between FY1998 and
FY2007 may indicate that the public is unaware of the right to appeal, or that
some significant barrier is impeding public appeals.57 Congress may wish to
55 One news article has reported of postal facility closures resulting in workers being reassigned to facilities located up
to 300 miles away from their former facilities. Gregg Carlstrom, “Postal Service Relocating More Employees,” Federal
Times, July 27, 2009, p. 8.
56 The APWU already has expressed concerns regarding collective bargaining agreements and retail facility closures.
American Postal Workers Union, “Changes and Challenges,” July 14, 2009, at http://www.apwu.org/news/burrus/2009/
update08-2009-090714.htm.
57 Alternatively, should the USPS’s proposed closures elicit a large public response, both the USPS and the PRC may
have to allot additional resources toward handling a spike in closure appeals.
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solicit the USPS’s and PRC’s opinions on why so few post office closures have
been appealed.
• Should the post office branch and station closure initiative go forward, affected
members of the public may grow concerned about the fate of the properties
occupied by the USPS. As noted earlier, the current USPS real estate disposition
policy is to “dispose of excess real property under the terms and conditions that
provide the greatest value to the Postal Service.”58 Whether the USPS’s interest
here coincides or collides with the interests of communities affected by post
office closures is unclear. Persons in affected communities may worry about
blight, and local governments may express the desire to acquire discontinued post
offices for the purpose of redeveloping them. Congress may wish to consider
whether a policy should be developed to assist communities affected by closures.
• Inherent to the current postal law is the assumption that some portions of the
United States provide profitable markets for postal services, while others do not,
and that the former should subsidize the latter. Thus, current law forbids the
USPS from closing “small post offices solely for operating at a deficit,” and it
requires the USPS to “provide a maximum degree of effective and regular postal
services to rural areas, communities, and small towns where post offices are not
self-sustaining (39 U.S.C. 101(b)). The law does not forbid closures of large
facilities located in suburban and metropolitan places. The USPS’s present
facility closure proposal may steer clear of the law’s prohibitions. However, the
USPS’s selection of facilities in metropolitan areas for closures may raise equity
concerns in affected areas, especially if these urban areas already are subsidizing
more rural places. The USPS and Congress may wish to devise some means to
address possible complaints about equity.
Author Contact Information
Kevin R. Kosar
Analyst in American National Government
kkosar@crs.loc.gov, 7-3968
Acknowledgments
The author thanks CRS’s Amber Hope Wilhelm, graphics specialist, and Paul F. Schirle,
geographic/geospatial information systems analyst, for creating the maps in this report at Figure 1 and
Figure 2..
58 U.S. Postal Service, U.S. Postal Service Facilities Guide to Real Property Acquisitions and Related Services, p. 15.
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