US Postal Service cuts jobs, processing plants, in bid to return to profitability

The U.S. postal service is looking to close nearly half of its mail processing plants and eliminate about 5% of its workforce to increase profitability. The postal service, which is expected to report an annual loss of $18.2 billion by 2015, is attempting to cut out $15 billion in by shutting 223 of its 461 plants, cutting about 35,000 jobs. The agency is looking at other cost-saving measures, including asking for a 5 cent raise in first class postage costs, making the price for a standard letter 50 cents. The office is also seeking congressional permission to end Saturday delivery as correspondence moves to the internet. The agency lost $33 billion in the fourth quarter, which included the busy holiday season. At the end of the fourth quarter there were about 650,000 people employed by the agency. The anticipated cuts will be 30,000 full-time positions and 5,000 temporary positions, which don't include full benefits. There is at least one processing center in the consolidating process in each state, except Alaska and Hawaii, according to a list from the postal service. Even states without processing center changes may see employment changes as the postal service looks to have the facilities run 18 hours a day, compared to the 10 to 12 hours a day they currently run, to improve efficiency. There is no method to prevent mail-processing center closings, as there is for post offices which have an appeals process by which challenges can be brought. The post office does not require permission from Congress, as it does to increase stamp rates, decrease delivery days or change insurance plans. As post office delivery days decrease traffic may shift to shipping companies such as UPS UPS or FedEx FEX. UPS stock has risen about $2 this year to $76.64 at the end of the day yesterday, as FedEx stock rose about $7 to $91.97. The two stocks have been pushed higher amid rumors that either company could buy TNT Express TNTEY, a Netherlands-based shipping company. The company rejected a $6.43 billion offer from UPS earlier this week and has not received an official offer from FedEx.