Utility providers and their direct mail counterparts in Northwest Arkansas are keeping an eye on the U.S. Postal Service’s plan to shutter 252 mail processing centers nationwide - a move that would leave Arkansas with a single center.
The Postal Service is studying the viability of consolidating the Fayetteville Processing and Distribution Center, as well as similar centers in Harrison and Hot Springs, and moving those operations to the Little Rock Processing and Distribution Center.
Another possibility is moving the Jonesboro Customer Service Mail Processing Center to Memphis.
Fayetteville Finance Director Paul Becker said losing the local mail processing center would slow the billing process for the city’s 37,000 water customers. Water customers are given about three weeks after the bill is mailed to remit payment and roughly half the customers still pay by mail, Becker said.
The longer it takes for the city to receive payment, thegreater the possibility for customers to receive shut-off notices, which are sent automatically if the bill is not been paid by the due date.
Becker said Fayetteville will consider extending payment deadlines a day or two for water customers if the Fayetteville mail processing center is closed.
Fayetteville Mayor Lioneld Jordan said he expressed opposition to the mail processing center consolidations on a recent trip to meet with the area’s congressional leaders in Washington D.C.
“Now the ball’s basically in their court,” Jordan said.
It’s too early to tell whether consolidations would have an impact on billing practices for customers of Southwest Electric Power Co., said spokesman Peter Main.
Main said the company, which has 113,700 customers in Arkansas, has a centralized billing operation based in Ohio.
Bills for all of the companies under the umbrella of American Electric Power Co. are processed in a central location to save money, he said.
“We are monitoring theUSPS developments, but don’t know yet what impact they might have,” Main said Friday.
The postal service has been consolidating mail processing operations since at least 2006, David Camp, Arkansas district manager for the service said during a public meeting in Fayetteville on Wednesday.
Camp said the postal service had 637 area mail processing centers in 2006 but has pared that down to 487. He said the service is looking at cutting the number again to less than 200, some time in or after 2013.
Consolidating mail processing centers is just one cost-saving item the Postal Service is considering, said Leisa Tolliver-Gay, customer relations manager for the service’s Arkansas district.
Tolliver-Gay said the service is also looking into changing the standard for first class mail from one to three days to two to three days.
On Tuesday, the Postal Service agreed to delay closing any of the 252 mail processing centers or 3,700 post offices until after May 15.
The pending closures are in response to years of declining first class mail volume, which has led to a loss of revenue for the service. Officials project a record $14.1 billion loss next year.
Closing processing centers may save money but it could also prompt customers to look at alternatives to the postal service, said Josh Moore, general manager of Washington Water Authority in Farmington.
Moore is looking at the possibility of electronic billing to all of the water provider’s nearly 5,600 customers. He said there are no plans to adjust the billing cycle if the Fayetteville processing center closes.
“My fear is it’ll take a couple days longer to get [bills] to the customers,” he said. “I’m notsure how that will affect them or how that will affect us as a business.”
Moore said about 20 percent of the authority’s customers have their payments automatically drafted from their bank accounts.
Moore said the authority contracts with a local direct mail service to print and distribute bills to customers each month
Direct mailing services are watching the process closely, said Joe Corn, owner of Target Direct Mailing Services Co. in Springdale.
Corn said the postal service doesn’t provide a discount for bulk mailers. Instead, it offers what’s called a “work-sharing discount.”
The discount’s calculation isbased on where the mail enters the system relative to where it is to be delivered, Corn said.
For example, mail being sent to zip codes starting with 727 are about 2 cents a piece cheaper if mailed in Fayetteville than in Little Rock, he said.
Corn said he worries that unless the formula is changed, consolidation could mean competitors in Little Rock could have an unfair advantage because they would get more of a discount for sending from the Little Rock processing center.
He said he expects to mail about 800,000 pieces of mail this week, so the per-piece discounts add up.
“We’re in a business of fractions of pennies,” he said. “It’s a volume game.”
Northwest Arkansas, Pages 11 on 12/17/2011