Duluth mail-processing center survives; others close nationwide

• Mail-processing facility

The U.S. Post Office says this facility in West Duluth will remain open at least through February 2014. (File / News Tribune)

Talk about it

Duluth’s mail-processing center escaped the first round of closings announced Thursday by the U.S. Postal Service, which said it can no longer wait for Congress to help pull it from the brink of bankruptcy.

“As of today there will be no consolidation of Duluth at this time,” said Pete Nowacki, Postal Service spokesman in Minneapolis. “We announced 140 facilities that were going to be consolidated between now and early next year. Duluth is not on that list.”

But the Duluth processing center may not be off the hook for long. Nowacki said another 89 processing centers will be closed beginning in February 2014. It isn’t known which centers will be on that list. Originally, the Postal Service planned to close 250 processing centers this year, consolidating them into larger operations.

Sen. Al Franken, D-Minn., welcomed the news.

“I’ve been fighting to save Duluth’s processing center since I heard it was on the chopping block last winter,” he said in a written statement. “I’m relieved to announce that it will remain open for the foreseeable future and that the approximately 100 people employed there won’t lose their jobs.”

Todd Fawcett, president of the local unit of the American Postal Workers Union, said Duluth postal employees are “very excited. I mean, our jobs are safe for now.”

The news isn’t as good elsewhere in Minnesota. Processing centers in Mankato, St. Cloud and Rochester will close, Nowacki said. The Bemidji center was spared.

Fawcett said geography favored Duluth, since it’s farther away from the Twin Cities than the communities that are losing their centers. He also credited Franken’s office for interceding on behalf of the Duluth center, along with the efforts of local businesses and residents.

“We’re definitely relieved,” Fawcett said. “We’ve been through a lot. You never know with the Postal Service what will happen. Hopefully it will be a long-term solution.”

At a news briefing, Postmaster General Patrick Donahoe said the agency’s mail-processing network had simply become too big, given declining mail volume and its mounting debt.

Earlier this month, nearly half the Senate had written letters to Donahoe asking that he hold off on closing any mail facility until Congress could pass final postal overhaul legislation. The Senate last month passed a bill that would halt many of the closings; the House remains stalled over a measure allowing for more aggressive cuts.

“To return to long-term profitability and financial stability while keeping mail affordable, we must match our network to the anticipated workload,” Donahoe said. Failure to do so, he stressed, would “create a fiscal hole that the Postal Service will not be able to climb out of.”

Under the modified approach, up to 140 mail-processing centers will be consolidated by next February; roughly 48 in August and about 90 next January and February, with closings suspended during the Postal Service’s busy election and holiday mail season. Another 89 closings would occur in 2014.

The Senate bill includes a provision that requires the Postal Service to maintain regional overnight delivery, which probably would ensure that the Duluth processing center would remain open. If the Duluth processing center were closed, Duluth mail would be sent to St. Paul for processing before being sent back to Duluth, adding a day to the guaranteed minimum delivery time.

The consolidations proposed by the Postal Service are expected to reduce postal staff by 13,000 and save the struggling mail agency about $1.2 billion annually once they are fully implemented. By the time the full round of cuts is implemented by late 2014, the Postal Service will have 28,000 fewer employees with estimated annual savings of $2.1 billion.

The Postal Service has been grappling with losses as first-class mail volume declines and more people switch to the Internet to communicate and pay bills. The agency has predicted a record $14.1 billion loss by the end of this year. Without changes, it said, annual losses would exceed $21 billion by 2016.

Donahoe stressed that even with its latest moves, the agency still faces mounting losses without congressional action that would give it more leeway to eliminate Saturday mail delivery and reduce health and labor costs.

If the House fails to act soon, postal officials say they will face a cash crunch in August and September, when the agency must pay more than $11 billion to the Treasury for future retiree health benefits. Already $13 billion in debt, the health payment obligation will force the agency to run up against its $15 billion debt ceiling, causing it to default on the payments.

The Associated Press contributed to this report.

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