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June 2012
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HARMFUL Local postal closing bad news for businesses

We understand the dilemma of the United States Postal Service. It has lost billions on its operations in recent years and has to find efficiencies.

However to us and we think most people the concept of efficiency means providing the same or faster service using fewer resources. It doesn't mean providing far worse service at the same price.

But that is how the proposed closure of the Paducah postal processing center will shake out for many businesses, including ours. In addition to the business impact, it is a slight to the local workers at the center, who despite having older equipment are consistently more efficient than the processing center in Louisville and are among the most efficient in the state.

Simply put, the Postal Service plan is to close an efficient local operation and save money by adding a couple of days or more to the time it takes to deliver local customers' out-of-county mail. Is it any surprise, then, that this quasi-government operation continues to hemorrhage revenue and mail volume?

The closure will mean that a letter mailed from Paducah to Murray will now route through Evansville rather than being sent directly, adding at least a day to the delivery time. For The Paducah Sun it will likewise mean that many of the 368 newspapers we currently deliver by same-day mail to our customers will now be delivered two or three days after the publication date. This will cost us some customers and greatly inconvenience those who remain. (People who receive our newspaper by mail live in areas where carrier delivery is not feasible).

The change will also mean delays in processing and delivery of billing statements for the newspaper and other local businesses that have a regional customer base.

Overall it is fair to say that from a business competitiveness standpoint, none of this is good for Paducah businesses or the Paducah market.

Of course the Postal Service is burdened by the fact that it is a quasi-governmental agency under the thumb of Congress. Many of its financial woes stem from onerous mandates Congress has placed upon it.

There was an illustrative article in the Washington Post recently dealing with a federal mandate that the Postal Service deliver groceries at a loss by air to small Alaskan bush communities. This is not exactly in tune with the Postal Service's mission to deliver the mail. This "mail" includes such items as dog food and TV sets, and delivering it isn't cheap. A 12-pack of Coke costs the Postal Service $21 to deliver to the bush, but it is required to do so - and at less than cost. Further, the Postal Service is required to pay air carriers above-market rates for the deliveries. The Post article says the Postal Service has lost $2.5 billion over the past three decades running this program.

Another major source of bleeding for the Postal Service is the congressional mandate that it put aside $5 billion a year to fund future health care costs of retired postal workers, well in excess of what actuaries say is needed.

So yes, efficiency is hard when Congress gets into the act, and the Postal Service suffers greatly from that. But in the case at hand, it is hard to understand how the Postal Service expects to stop the bleeding of customers and mail volume when it takes actions such as the one proposed for Paducah, which is sure to drive away business.

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