Lost in the Mail: Postal Service Shutting 3,700 Offices

Snail mail has taken yet another hit from the web, and this time, it could hit close to your home.

Some 3,700 post offices will soon be shut as the U.S. Postal Service reevaluates its retail network in an effort to save money as consumers continue migrating away from snail mail and toward social media and the Internet.

As more customers choose to conduct their postal business online, on their smart phones and at their favorite shopping destinations, the need for the U.S. Postal Service to maintain its nearly 32,000 retail office the largest network in the country diminishes, the USPS said Tuesday in a statement.

More than 35% of the services retail revenue comes from expanded access locations such as grocery stores, drug stores, office supply stores, retail chains, self-service kiosks, ATMs and usps.com. Since it receives no tax dollars for operating expenses, it relies on the sale of postage, products and services to fund its operations.

Our customers habits have made it clear that they no longer require a physical post office to conduct most of their postal business, said Postmaster General Patrick Donahoe.

Select post offices in 49 states and the District of Columbia will be reevaluated as part of the review. The only state not included is Delaware. Closings are slated to begin within the next four to six months, with the first closing by January.

For those locations that will be affected, the USPS said it will partner with third-party retailers to launch the Village Post Office. Under that initiative, small businesses will operate virtual post offices, offering customers the typical products and services theyd typically find at a post office such as stamps and flat-rate packaging.

The move comes after several unsuccessful attempts by the USPS to spark interest in its ancient service in an effort to cut costs and raise revenue. Earlier this year, the government agency even introduced gift cards to better appeal to todays consumer.

The USPS admitted it would likely have a cash shortfall and hit a debt borrowing limit this fiscal year. Last year the postal service booked an $8.5 billion loss.

This move and others, such as a proposal being considered to reduce service to five days a week, are necessary to close a $20 billion gap in revenue by 2015, according to Donahoe. The USPS predicted about $200 million could be saved from the closings.

The Postal Service of the future will be smaller, leaner and more competitive and it will continue to drive commerce, serve communities and deliver value, Donahoe said.

With 32,000 postal retail offices and more than 70,000 third-party retailers, which will be known as approved postal providers, customers will still have about 100,000 locations across the nation to conduct their postal business, he said.