GAO: USPS needs a retail network revamp

The report comes just days after the Postal Service announced that it lost $5.1 billion in fiscal 2011, even after a mandatory $5.5 billion prepayment for retiree health care benefits was pushed back by Congress.

The Postal Service has also said that, unless Congress overhauls its operations, losses could reach $20 billion by 2020 and it could be insolvent in less than a year.

The agency has asked for, among other things, the ability to scrap Saturday delivery as it tries to get its finances in order.

USPS also said earlier this year that as many as 3,700 offices could be earmarked for closure, as it tries to streamline operations by looking to take more advantage of the Internet and enhance its presence in retail shops.

Rural state lawmakers have long been skeptical of local branch closures, as well as five-day delivery.

In all, GAO says, the Postal Service is thinking about closing close to half of its 32,000 local post offices by 2015.

The agency also said, in response to the GAO report, that it was working on getting its message out more effectively.

“The Postal Service is in the process of completing a comprehensive strategic plan to outline an optimized retail access plan for the entire country and to identify efforts and activities occurring across the organization that align with optimizing the retail network,” the agency’s Kelly Sigmon wrote.

Competing postal reform plans have been passed out of both House and Senate committees. Rep. Darrell Issa (R-Calif.), the House Oversight Committee chairman and one of the lawmakers who requested the GAO study, said the report reiterated the need for USPS to change its ways.

“This report confirms that USPS must realign its retail network in order to control costs and remain competitive,” Issa, the sponsor of the House postal reform bill, said in a statement.

Meanwhile, Sen. Susan Collins (R-Maine), one of the sponsors of a bipartisan Senate reform bill, said her chamber's legislation would help get the agency where it needed to go.

"The GAO’s finding – that the Postal Service should develop a data-driven plan to guide its retail network – supports our goal to establish new standards for retail postal service," Collins said in a statement.