The postal service has lost $20 billion in revenues over the last four years — $8.5 billion in fiscal year 2010 alone. People aren't mailing letters like they used to, due to the economic crisis and use of the Internet, spokesman Augustine Ruiz said. Mail volume has dropped by 20 percent in four years.
Changes must be made so that the postal service can pay $5.5 billion it owes to its retiree health-benefit program and so that it can have cash reserves, according to the President's Plan for Economic Growth and Deficit Reduction.
To cut costs, the postal service is installing machines to sort packages, which will reduce the need for carriers to sort them. With more time on their hands, the carriers would be given longer mail-delivery routes.
One postal worker who asked to remain anonymous said he feared that Palo Alto could lose 14 or more carriers. Palo Alto employs 129 carriers and 17 relief carriers, according to the postmaster's office.
"The public is definitely going to see changes — and soon," the carrier said.
But Palo Alto Postmaster Dean Maeda did not specify how many, if any, positions would be cut.
In Menlo Park, Portola Valley and Atherton, the consolidation of mail routes on Aug. 30 resulted in 12 fewer routes. The number of routes changed from 67 to 55, according to Menlo Park Postmaster Jeffrey D. Gaskill. The 12 postal carriers were to be reassigned to local post offices that needed them, he said.
Customers and mail carriers have expressed sadness about the changes, Gaskill said. Some carriers have had the same route for 20 years and have seen residents' kids grow up.
Fewer carriers on the street would also mean the consolidation of some routes in Palo Alto, Ruiz said. Customers who now get mail in the morning could see their deliveries arrive in the late afternoon, or vice versa.
Ruiz said the postal service is still working out the details, but mail carriers who lose their routes could be placed in another facility if there are vacancies or might be moved off the streets and into other positions.
Ruiz said some carriers might retire, but no one would be forced to take early retirement.
Saturday delivery could also be on the chopping block.
On Sept. 19, President Barack Obama's administration backed a postal-service plan that would cut Saturday mail delivery and would allow the sale of non-postal products. If approved by Congress, the Saturday delivery could be eliminated by the end of this year or early in 2012, Ruiz said.
The postal service is also considering closure of 37,000 postal stations nationwide, but none of the stations would be in Palo Alto or Menlo Park. The postal service could also consolidate 252 mail-preparation facilities, which could affect 30,000 to 35,000 employees, he said.
"We're doing everything we can while suffering this downturn," Ruiz said, adding the postal service has made $12 billion in cost reductions in four years and reduced employee ranks by another 110,000.
But Ruiz said staff cuts would not be enough.
"It's the things that are out of our control that we can't change. We don't control the Internet and the economy," he said.
The postal service saw mail volume decrease from 213 billion pieces in 2006 to 171 billion through fiscal year 2010.
"The first-class letter probably won't see those volumes come back, but as more people shop in the Internet, more packages will be shipped. To my knowledge, nobody has figured out how to email a sweater," he said.
At this point, package shipments and standard or advertising mail growth are stagnant, although Ruiz said both remain areas of projected growth as the economy recovers. The postal service is seeing signs of recovery now, he said.
"It takes roughly three pieces of standard mail to replace the contribution of a single piece of first-class mail. However, we have introduced a new product called Every Door Direct Mail that has proven profitable in the direct-mail business," he said. Small businesses with tight budgets can target specific areas without needing a permit or investing in a mailing list, he said.
The postal-service plan would also restructure a mandatory annual $5.5 billion retiree health benefit payment. It would also refund nearly $7 billion the postal service said it has overpaid into the Federal Employee Retirement System.
The postal service is also asking for a legislative change to eliminate layoff protections in its union agreements so it can eliminate jobs quickly to meet its 2015 goals. The plan or any portion of it would not take effect unless it receives a favorable vote from Congress, potentially in early 2012, Ruiz said.