Gilroy
– Despite deep lines of customers at Gilroy’s post office,
revenues dropped 5 percent in 2006, reflecting industry-wide trends
away from over-the-counter sales and toward mailing outposts and
online mailing, postal officials said.
Gilroy – Despite deep lines of customers at Gilroy’s post office, revenues dropped 5 percent in 2006, reflecting industry-wide trends away from over-the-counter sales and toward mailing outposts and online mailing, postal officials said.
“Do you really need to come to the post office to conduct your business?” asked Augustine Ruiz, a Northern California postal service spokesperson. For many in Gilroy, the answer seems to be no. Though Gilroy resident Kelly Ramirez picks up her mail at the post office, she prefers to send it at Nob Hill Foods, where the postal service operates a contract postal unit.
“The lines are always too long here,” Ramirez said of the Gilroy Post Office, “and the parking is inadequate.”
Others click on the USPS Web site to print out labels or order stamps, buy stamps at the drugstore, or use competing private carriers such as FedEx and UPS to ship packages. The results are less traffic at the post office – and fewer over-the-counter sales. Stamp sales at the Gilroy post office are down 47 percent from last year, said Gilroy postmaster Penny Yates. Packaging products such as tape and boxes are down almost 25 percent. The only item that’s up is a passport, now required to return to the U.S. from Canada and Mexico.
The drop doesn’t worry Ruiz, who explains that contract units and online sales have generally offset decreases in walk-in revenue, and allowed the postal service to keep up with growth without opening new offices. Internet bill-pay may have cut some sales, Ruiz said, but online shopping has sent more heavy, oddly-shaped items through the mail, a new revenue stream for USPS. Others say the declining sales reflect larger industry trends.
“The postal service’s mission isn’t as relevant as it has been in years past,” said Sam Ryan, a senior fellow at the Lexington Institute, a Virginia-based think-tank that believes in limiting the role of the federal government. “The logical thing is that the postal office should probably scale down.”
Rate increases limited in the future
Ruiz expects a temporary jump in traffic at post offices nationwide this month, as USPS begins selling the new 41-cent stamp. The rate increase goes into effect May 14, and new stamps will be available April 12.
But financial pressures continue to squeeze the postal service – in Gilroy and nationwide. Recently passed legislation limits rate increases for standard and first-class mail, the only services USPS has the exclusive right to offer. Now, the postal services’ costs must stay below the consumer price index, keeping pace with inflation. Postal workers have protested the change, saying it limits the service’s freedom to respond to price increases such as gasoline costs. Ruiz estimated that each extra penny paid at the pump costs USPS nearly $8 million each year.
Ryan, a critic of the USPS’ “monopoly-protected services,” says the legislation will force greater efficiency at the postal service.
“It’s going to be a fairly grim future for the post office,” Ryan said, “if they can’t stay within that inflationary cap.”
And that’s exactly why the American Postal Workers Union opposed it.
“It’s highly inappropriate,” said Sally Davidow, union spokesperson. “It’s very constraining, and it won’t give the postal service sufficient freedom to respond to spikes in gas prices and other things of that nature.”
Union says Discounts hurt bottom line
Postal workers argue that the USPS should cut costs by re-evaluating the work-sharing program, which gives discounts to businesses that pre-sort their mail, such as advertising mailers and credit-card solicitors. The discounts are intended to reimburse businesses for doing work that postal workers, in turn, don’t have to do. Businesses save a few pennies per piece of mail – but with millions of mailers going out, said Davidow, it adds up.
“Their discounts are so large that the postal service is giving bigger discounts than the money they’d save if they did the sorting themselves,” Davidow said. “At that point, it becomes a subsidy … It’s depriving the postal service of this revenue.”
Others complain that the USPS can’t offer the same discounts that commercial services like FedEx and UPS can. Though USPS discounts pre-sorted mail, it doesn’t discount for bulk like its competitors, said Ted Viola, former San Martin postmaster.
“The postal service always charges one rate,” Viola said. “They’re not allowed to compete with UPS and Fed-Ex … If they could, they could outdo anybody. They’ve got resources that the competition doesn’t.”
Ruiz said offering bulk discounts would compromise the postal service’s obligation as a government agency to provide universal, affordable service. Privatizing the mail could put less-profitable areas, such as rural counties, at risk of losing service.
“A company like UPS and FedEx can change its rates at will, anytime it wants,” Ruiz said. “We’re a quasi-governmental business … Our mandate has not changed since 1775, when we were first created by Congress … The USPS belongs to the American people.”
crowding complaints could be a factor
Though postal officials say declining over-the-counter revenues in Gilroy are a result of new mailing options, others say the post office itself is to blame.
“You guys have got to get a new post office,” said Viola. “I never go there even though I live in Gilroy. It’s too small. You can’t expect people to go when there are 15, 16 people in line, and there isn’t any parking.”
Tuesday afternoon, cars idled on Fourth Street, waiting to turn into the packed parking lot. Nine parking spots serve the building; additional cars stop along red-painted curbs and let passengers out to drop off mail. Inside, waits are short: Even with 12 people in line, customers were served within four minutes. Many praised the workers’ politeness. But the parking situation still frustrates customers. Across town, PostNet owner Yousry Abdel-Shafy says most of his customers cite quicker service and no waits as the reason they come to his shop.
Population growth prompts USPS to expand or upgrade post offices, said Ruiz. But Gilroy’s post office is unlikely to be replaced soon, despite complaints about its crowded parking lot, because the existing facility accommodates the city’s needs at its current 2 percent growth rate, said Yates. Plans to house a new post office at Las Animas Elementary School, due to be vacated this September, have apparently been abandoned since 2004, when the Dispatch last reported on the post office’s capacity.
Community leaders can also lead the push to replace post offices. Daniel Kohns, a spokesperson for Congressman Mike Honda, said the office hadn’t received any recent phone calls or mail on the issue, and that the Congress has a limited role in proposing new offices.
