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September 15. 2011 9:49PM

Postal Service woes threaten Nashua plant

NASHUA — A national initiative to optimize Post Office distribution facilities has left the future of the Celina Avenue mail distribution center in Nashua uncertain.

The Postal Service expects to save $3 billion a year by cutting its network of mail processing plants.

“We are forced to face a new reality today,” said Postmaster General Patrick Donahoe. “First-Class mail supports the organization and drives the network requirements. With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic.”

Since 2006 the Postal Service has closed 186 facilities, retired 1,500 pieces of mail processing equipment, decreased staff by more than 110,000 through attrition, and reduced costs by $12 billion, Donahoe said.

Future cost-cutting proposals include studying nearly 250 processing facilities for consolidation or closure, reducing mail processing equipment by up to 50 percent, decreasing the transportation network, eliminating as many as 35,000 positions, and revising first-class mail standards.

Tom Rizzo, spokesman for the Northern New England District, confirmed that processing plants in Nashua and Manchester will be included in a study that will evaluate the centers for possible consolidation or closure.

A similar study in Portsmouth is completed and that facility is already in the process of consolidating with the Manchester plant, Rizzo said. Those plans will not change, he said. Only one plant in this region, located in Maine, will not be involved in the study, Rizzo said.

The Nashua facility evaluation will look at the feasibility of consolidating its functions into several other plants in the region, Rizzo said. Nashua will not be consolidated with Manchester because the plants perform different functions, he said. White River Junction could possibly be consolidated with Manchester, Rizzo, said.

It would be premature to speculate on the fate of the Nashua facility's 302 full-time and five temporary employees before the study has even begun, Rizzo said. Nationwide, 252 processing plants and 35,000 positions will be involved in the study. The Postal Service is a responsible employer, Rizzo said, and will follow the requirements of collective bargaining, as well as other laws, where they apply.

The decline in the volume of first-class mail is a major factor, Rizzo said.

Total mail volume has declined by 43 billion pieces in the past five years, Rizzo said. First-class mail dropped 25 percent during that time. First-class mail is the bread and butter of the postal system and drives network requirements.

The Internet, the recession and a congressional mandate also helped create the perfect storm for postal finances.

Online bill paying and email has cut first-class mail usage, Rizzo said. The recession has also played a role, he said. The largest mailers, banks and credit card companies, are producing fewer mailings. Businesses in general are sending less advertising flyers and lowering activity overall, he said.

One of the largest factors is a 2006 congressional mandate requiring the Postal Service to pre-fund health benefits for future retirees for the next 75 years. The funds are paid on an aggressive 10-year schedule, he said, and the postal service has been paying $5.5 billion annually.

“If not for that $5.5 billion annual payment the Postal Service would be in the black,” Rizzo said.

Four bills in Congress are currently appealing for relief from that requirement but no action has been taken, Rizzo said.



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