APPENDIX N — Procedures for Closing Postal Facilities 
This Appendix explains the legal requirements for post office closings and details the internal procedures 
the Postal Service has adopted to consolidate operations. It also explains requirements for nationwide 
changes in postal services.
Under the Postal Reorganization Act, the Postal Service may not close post offices solely for economic 
reasons. Also, postal patrons have the right to appeal post office closings to the Postal Rate Commission. 
Further, pursuant to the Reorganization Act, the Postal Service must seek an Advisory Opinion from the 
Postal Rate Commission if it intends to change postal services on a nationwide basis. These external legal 
requirements, when combined with internal guidelines for plant consolidations, help determine next steps to 
improve operational efficiency and customer service. 
Post Office Closings and Consolidations 
Certain regulations based on federal law apply when postal managers propose to replace a post office with 
an alternate form of postal service. These regulations are designed to ensure that the reasons for proposing 
such changes in postal service are fully disclosed at a stage when customers can make helpful contributions 
toward a final decision. The full text of the statutory provisions appear in Title 39, United States Code, 
Section 404(b). The Postal Service’s implementing regulations appear in Title 39, Code of Federal 
Regulations, Part 241.3. 
Under postal regulations an initial investigation and any subsequent formal proposal to discontinue a post 
office originate with postal field managers responsible for post offices in their area. The proposal explains 
the services recommended as substitutes and the rationale that supports this recommendation. The written 
proposal is prominently posted for 60 days at affected post offices, along with an “Invitation for 
Comments,” which formally invites customer comments. At the end of the 60-day comment period, 
additional review is made at lower and upper levels of postal management.
When a final decision is made at Postal Service Headquarters in Washington, DC, that decision is posted in 
affected post offices for 30 days, during which customers may appeal the decision to the Postal Rate 
Commission in Washington, DC. The Postal Rate Commission has 120 days to consider and decide an 
appeal. It may affirm or remand. Even without an appeal, postal regulations specify that a post office may 
not be closed sooner than 60 days after the public posting of the final decision.
The Postal Reorganization Act’s promise of a more businesslike approach to providing the nation’s mail 
service prompted considerable concern over the fate of small post offices, particularly rural ones. Section 
101(b) of the Postal Reorganization Act reflects this concern by providing that: 
“No small post office shall be closed simply for operating at a deficit, it being the specific 
intent of the Congress that effective postal services be ensured to residents of both urban 
and rural communities.” 
The Act as originally approved did not provide any role for the Commission in small post office closings. It 
contemplated only Postal Service involvement. However, the early-to-mid seventies saw mounting concern 
over Postal Service administrative proposals to close small post offices, and in 1976 Congress amended the 
Postal Reorganization Act of 1970 to provide for Commission review of appeals of post office closings or 
consolidations brought to it by affected persons. 
The Commission makes its review based on statutory standards that evaluate the legal sufficiency of the 
Postal Service’s treatment of the statutory criteria. This involves determining i) whether procedural 
requirements, such as providing adequate notice to patrons, were satisfied, ii) whether the Postal Service 
has made, on the record, the statutory findings it is required to make, and iii) whether they are supported by 
substantial evidence. 
The Commission must affirm the determination to close or consolidate a post office unless its inquiry 
discloses inconsistency with the law or the Postal Service’s failure to comply with due process 
requirements. If inconsistencies exist, the Commission cannot disapprove the closing or consolidation 
proposal. Rather, it must remand the case to the Postal Service for reconsideration of the criteria in 
question. In other words, returning a determination to the Postal Service does not mean that the Postal 
Service may not eventually close the office, only that it first must take further action to address the matters 
raised by the Commission, and may face another appeal. 
In 1998 the Postal Service placed a moratorium on the closure of small post offices. This moratorium 
remains in place. Should the moratorium be lifted, the following closure procedures adopted by the Postal 
Service prior to 1998 would likely be implemented once again. 
Procedures for Discontinuance of Independent Post Offices
A. Initial Review (0-10 Days)
*	Postmaster vacancy. 
*	Emergency suspension. 
*	Decision to study post office for discontinuance or fill postmaster vacancy.
B. Review / Investigation Study (10 days–2 months)
*	Gather information on community.
*	Contact county and city officials for community demographics and growth trends.
*	Conduct window transaction and mail volume surveys to evaluate office workload.
*	Analyze service alternatives.
*	Analyze data gathered during investigation.
*	Decision made to proceed with discontinuance study.
C. Community Input (2-6 months)
*	Questionnaires sent to affected communities and/or community meeting held.
*	Customer input analyzed.
*	Decision made to proceed with discontinuance study.
D. Proposal (6-12 months)
*	Written proposal prepared that provides a description and analysis detailing the nature and cause of 
change.
*	Proposal addresses the following: Responsiveness to Community Postal Needs; Effect on Community; 
Effect on Employees; Economic Savings; Other Factors; Summary; and Notice.
*	Proposal and invitation for customer comments are posted at affected post office(s) for 60 days. 
*	Written analysis of customers’ concerns prepared.
*	Revised proposal prepared and re-posted for an additional 60 days if significant changes are made to 
the original proposal.
*	Decision made to proceed with discontinuance study.
E. Final Determination (12-24 months)
*	Discontinuance study reviewed by Headquarters.
*	Written final determination prepared providing customers with information on appeal rights to Postal 
Rate Commission.
*	Final determination posted at affected post office(s) for 30 days.
*	Affected post office is officially discontinued 60 days after the posting of the Final Determination (if no 
appeals).
*	Financial close out of post office / establishment of alternate service.
F. Appeals to the Postal Rate Commission (24-28 months)
*	Discontinuance study reviewed by Headquarters General Counsel and decision made to either proceed 
with discontinuance or withdraw study.
*	Postal Rate Commission has 120 days to make decision on appeal.
*	Postal Rate Commission either remands or affirms Postal Service decision.
The chart on the following page illustrates graphically the process explained above.



PROCEDURES FOR DISCONTINUANCE OF INDEPENDENT POST OFFICES




Revenue-Losing Small Post Offices: Some Examples
A few examples of rural post offices that operate less than 40 hours a week and are not self-sustaining 
highlight the Postal Service’s inability to make business decisions regarding retail outlets. 
Post Office A. This office is currently located in the Postmaster’s home. It makes no deliveries and has no 
post office box customers. Its annual walk-in revenue is $600, while its annual costs reach about $11,000. 
There is one post office located within three miles of Post Office A. This post office is open 10 hours a 
week.
Post Office B. This office, which is open 24 hours a week, has no deliveries but does have 45 post office 
box customers. Its annual walk-in revenue is approximately $6,000; its annual costs are around $19,000. 
There are two post offices located within three miles of Post Office B. 
Post Office C. This office is currently located in a “coal shed” leased by the Postal Service. Its annual 
walk-in revenue is approximately $1,400, while its annual costs are around $22,000. Open 10 hours a week, 
there is another post office located within four miles of Post Office C. 
Post Office D. Located in an old farm house, this 10-hour-a-week office makes no deliveries and has nine 
post office box customers. Annual walk-in revenue amounts to about $2,000, while annual costs are around 
$19,000. There is one post office located within four miles of Post Office D. 
Post Office E. This office makes 68 deliveries daily, is open 39 hours a week, and has 64 post office box 
customers. Its annual walk-in revenue is about $15,000; its annual costs are around $60,320. There are two 
post offices located within one mile of Post Office E. 
Consolidations — Implementation of Area Mail Processing Procedures
In addition to restrictions on closing post offices, when considering streamlining operations the Postal 
Service also looks to facility consolidations. The following describes the procedures for consolidating 
operations under Area Mail Processing (AMP) concepts. This is an internal procedure that is used to 
ascertain if operational efficiencies are available by consolidating operations that are geographically 
adjacent. 
A. Pre-Implementation Review (0-60 Days)
*	Consider impact on service
*	Identify possible service commitment changes
*	Forecast community impacts
*	Forecast employee impacts
*	Identify transportation, Highway Contract Route, and network concerns
*	Identify operating plan changes
*	Firm up future equipment deployments
*	Consider impact on new and existing facilities
*	Quantify productivity impacts and other costs
B. Decision to study and quantify impacts of Area Mail Processing action on operating environment
*	Notify Area Office (1 day)
*	Provide notification that AMP study will be conducted
*	Request assistance if needed
C. Decision to proceed with Area Mail Processing study and proposal
*	Complete Area Mail Processing study
*	Identify which offices will be consolidated (0-6 months)
*	Quantify volume of mail to be shifted
*	Prepare narrative listing reasons for consolidation
*	Validate impacts on service commitments, employees, and transportation
*	Validate impacts on cost / productivity
*	Identify changes that will affect operating plans at all facilities involved inthe consolidation
*	Identify redundant equipment
*	Provide anticipated implementation date
*	Identify probable effects on the community 
*	Create file for supporting documentation
*	Notify area of results
D. Decision submitted to Area recommending implementation of Area Mail Processing or 
cancellation of the study
*	Area evaluation of AMP proposal; validate transportation routings (30 days)
*	Address workhour, cost, and budget adjustments
*	Document customer satisfaction, community impacts, while exploring operational feasibility
*	Document contacts with all respective local government officials and Congressional representatives
*	Administer human resource and employee contingency issues
E. Decision by Area to notify initiating office to cancel study or to Headquarters to recommend AMP 
implementation
*	Headquarters evaluation of AMP proposal; coordinate final arrangements with Legislative Affairs, 
Consumer Affairs, Inspection Service, Transportation, and Operations Support. (30 days) 
*	Arrange for any changes to service commitments
F. Decision by Headquarters approving implementation of Area MailProcessing study
*	Implement date assigned (1 day)
*	Headquarters will assign an implementation date
*	Headquarters notification of official AMP
*	Postmaster or designee will brief local union representatives prior to implementation
G. Decision by Headquarters assigning Area Mail Processing implementation date
*	Implement Area Mail Processing (0-365 days)
*	Conduct semi-annual Post-Implementation Review (PIR)
*	Conduct a PIR within 30 days after the second full quarter following implementation (30 days)
*	Identify proposed versus actual expectations
*	Identify accountability
*	Evaluate performance against corporate / local goals and objectives
*	Conduct annual PIR (30 days)
*	During the first year after implementation an annual PIR will be conducted by the initiating office and 
the Area.
*	Evaluate the Semi and Annual Post-Implementation Reviews; Headquarters will evaluate the PIRs (30 
days each)
*	If necessary, decision made to reverse a current implementation of an AMP plan
The chart on the following page illustrates graphically the process explained.



PROCEDURES FOR AREA MAIL PROCESSING CONSOLIDATIONS




Efforts to Close a Larger Facility
An example of the difficulty inherent in attempting to close a postal facility is described below. 
In order to streamline operations and minimize redundancy, the Postal Service developed a plan to close a 
facility. In this plan, the Postal Service offered to provide jobs to all bargaining unit employees at another 
facility and to cover basic relocation costs.  For EAS employees, the plan called for some positions to be 
transferred and others to be eliminated. An organization functioning within a more businesslike, commercial 
model would have encountered minimal resistance in implementing such a plan. However, implementation 
of the Postal Service’s plan has been delayed by legal and regulatory constraints.
The Postal Service itself conducts studies prior to deciding to close a facility, and only pursues those that 
will benefit the rate payer through lower costs.  Although the closure of the facility was found to result in 
greater efficiency and reduced fixed cost, by request of the House of Representatives a study of the proposal 
to close the facility was initiated. As part of the study, a questionnaire was not only sent to employees to be 
impacted by this closure, but also included former employees of another facility that was closed in 1993.   A 
copy of the questionnaire sent to employees can be found at the end of this Appendix.  
This is but one example of Congressional oversight.  Attempts to close facilities often generate files that are 
thousands of pages thick. Cost avoidance and network optimization, demanded by customers and other 
postal stakeholders, are difficult to achieve in such a restricted, regulated environment.
Advisory Opinions
A final consideration for operational efficiency is the statutory requirement that the Postal Service obtain 
Advisory Opinions for nationwide changes of service. The Postal Reorganization Act directs the Postal 
Service to develop and promote efficient postal services. It also provides a role for the Postal Rate 
Commission whenever the Postal Service intends to change, on a nationwide or substantially nationwide 
basis, the postal services offered. The Act states: 
“When the Postal Service determines that there should be a change in the nature of postal 
services which will generally affect service on a nationwide or substantially nationwide 
basis, it shall submit a proposal, within a reasonable time prior to the effective date of such 
proposal, to the Postal Rate Commission requesting an advisory opinion on the change.” 
The Commission has stated that in deciding whether to file a request for an advisory opinion, the Postal 
Service should be governed by a good faith judgment whether a jurisdictional issue could be raised which is 
so difficult, doubtful, serious, or substantial as to make it a fair ground for litigation. 
Upon receiving a request for an advisory opinion, the Commission must allow interested parties, the Office 
of the Consumer Advocate, and the Postal Service an opportunity for a hearing on the record. The 
Commission will then render a written advisory opinion as to whether the change conforms to the policies 
of the Act. 
The nature of the Commission’s role is truly advisory. Thus, although the Postal Service must ask the 
Commission for an advisory opinion and the Commission must offer to hold hearings, the Commission’s 
advice is not binding. To date, the Postal Service has requested four advisory opinions on changes in the 
nature of Postal Services. These have involved a retail analysis program, the provision of airmail services to 
First-Class Mail, payment provisions for Collect on Delivery Service, and realignment of First-Class Mail 
delivery standards.


QUESTIONNAIRE THAT WAS SENT TO POSTAL SERVICE EMPLOYEES


















United States Postal Service Transformation Plan
April 2002 | Appendix N–1