Every day at Corporate Disk in McHenry, workers package and send out CDs and DVDs of training guides and newsletters for clients around the world.
To ship the materials, the company routinely uses the U.S. Postal Service, UPS and FedEx, said Joe Foley, vice president of sales and marketing.
How the company ships products is the client’s choice, Foley said. However, the post office is the most economical.
“We get a lot of mail to our facility,” Foley said. “We need it to come every day.”
Planned Postal Service changes, including eliminating Saturday deliveries, could have a long-term effect on Corporate Disk, Foley said.
As technology changes and fewer people turn to the post office to send items, the U.S. Postal Service finds itself looking at service cuts to remain solvent.
According to the USPS website, the service is looking at several proposals to save on costs, including studying about 250 processing facilities for possible consolidation or closure, reducing mail-processing equipment by as much as 50 percent, dramatically decreasing the nationwide transportation network, decreasing the workforce by as many as 35,000 positions, and revising service standards for first-class mail.
Under the current system, first-class mail is delivered in one to three days, depending on where the mail is going. With the proposed infrastructure changes, first-class mail could take two to three days for delivery.
“If implemented, the change in service standards would allow for significant infrastructure changes to be made across the nation,” the Postal Service said on its website.
Revenue to the post office has dropped because of the reduction in volume. However, expenses have stayed the same, because carriers still stop at each address regardless of the amount of mail. This has led to a growing deficit. Without change, losses are expected to reach $238 billion by 2020, according to the post office.
At Corporate Disk, the potential changes worry Foley, he said.
The company spends about $1 million in postage each year.
If a product becomes harder to ship, people might try to digitally download the product rather than have the physical CD or DVD, Foley said.
It is a practice being seen with music, TV shows and even movies.
“We don’t want people to decide to sell products online and stop having a physical product,” Foley said.
In the past five years, USPS mail volume has decreased by 43 billion pieces, according to the Postal Service. This has led to excess capacity within the Postal Service’s processing network.
Because the Postal Service is waiting for Congress to enact comprehensive postal reform, the specific changes that will take place remain up in the air.
Sean Hargadon, spokesman for the Postal Service, said career employees with the Postal Service would not lose their jobs if changes were implemented. However, part of the Postal Service is made up of temporary workers who have yearly contracts that get renewed as needed.
Hargadon would not speculate how many jobs could be lost with the changes.
In recent years, there has been a freeze on people becoming career or full-time employees, Hargadon said.
The possible consolidations under study are meant to help save the Postal Service money while running a more efficient service. Currently, 252 mail processing centers are under study for possible consolidation. The Rockford processing plant is one of the centers under study.
As the Postal Service conducts its studies, officials are looking at how much mail-sorting machines can handle in the processing plants.
To further cut costs, the Postal Service has suggested going to five-day-a-week delivery.
Mail would not be delivered or picked up on Saturdays to homes or businesses, and there would be no collection from blue boxes.
Saturday is the least affected day, and it preserves the five-day workweek, Hargadon said.
It also would save about $3.1 billion, according to U.S. Postal Service estimates.
“We’re going to run out of money at the end of the [fiscal] year in September,” Hargadon said.
Much of the Postal Service’s budget deficit has been due to the shift to online communication, he added.
“Customers’ habits have changed,” Hargadon said. “We’re trying to adapt.”
At the Pioneer Center for Human Services, clients help put together bulk mailings for other companies, said Craig Adams, director of business development.
Three to four times a week they put together bulk mailings for companies such as Jostens that will include 5,000 to 10,000 pieces of mail.
Pioneer clients put on labels, stuff envelopes, and sort for companies whose mailings go around the country.
Pioneer sends items through bulk mail, which would take one to two weeks for arrival, but at a cheaper rate.
“Businesses we’re working for want that stuff to get there as soon as possible,” Adams said.
Sometimes mailings, such as Jostens’ high school class ring orders, are time-sensitive and have to be prepared a month in advance, Adams said.
“Depending on what happened, we might have to go to two months,” Adams said. “We’re going to have to plan further ahead, so [mail] will get there on a timely basis.”
If mailings take longer, some businesses might opt for email campaigns rather than bulk mail, Adams said.
“I would be more concerned about the speed and decreasing business,” Adams said.
However, if processing plants are shut down, Adams said he isn’t sure how it would affect his operations.
For bulk mailing projects, Pioneer receives $50 per 1,000 pieces.
“If you do a lot of those, it adds up,” Adams said.
The Postal Service’s fiscal woes
• In the past five years, first-class mail has dropped 25 percent and single-piece first-class mail – letters bearing postage stamps – has declined 36 percent in the same time frame, and about 50 percent in the past 10 years.
• The increased use of the Internet and the economic recession have severely affected Postal Service revenues. From fiscal 2007 to fiscal 2009, mail volumes declined 16.4 percent.
• The Postal Service concluded fiscal 2009 with a $3.8 billion loss, despite federal legislation that deferred a payment to its future retiree health benefit trust fund by $4 billion.
• The Postal Service’s operating losses could be reduced in part by eliminating Saturday delivery, which would save about $3 billion annually. Five-day delivery operations would help the Postal Service bring costs in line with declining revenues and allow it to continue to operate well into the future.