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When the U.S. Postal Service starts talking about big changes, businesses of all sizes start paying attention.

The latest plan to alleviate the Postal Service's financial troubles — the closure or consolidation of 3,700 local post offices and 252 mail processing centers, along with the end of next-day first-class delivery — is on hold until May as Congress tries to look for other fixes. But until the threat of closures and service reductions is off the table, some Midlands businesses are grappling with the thought of delayed shipments, added costs, and potential hardships for customers.

Omaha payment processor First Data, which operates three printing and mailing facilities in the U.S., including two in Omaha, generates 1.5 billion pieces of mail each year. Executives don't think the proposed reductions will have much of an impact on the company's operations, but they believe customers could run into trouble. With fewer post offices and slower-moving mail, payments might not reach First Data in time.

"From a consumer perspective, it has the potential to result in additional fees and/or interest, depending on when consumers mail their payments," said Tim Rosenthal, First Data's senior vice president of output services.

Omaha-based insurance company Physicians Mutual, which sends out more than 85 million pieces of mail each year, doesn't plan to make any changes based on the Postal Service's proposed cuts. But senior vice president Bob Gunia said the company is doing more to encourage customers to opt for paperless statements — which help to keep costs down.

Increases to postage tend to have the biggest impact on Physicians Mutual, though Gunia said any changes that show uncertainty at the Post Office is worrying.

In short, companies like Physicians Mutual need the Postal Service to be in good health in order for them to do the same.

"We are concerned about the long-term viability of the U.S. Postal Service, and so these discussions are important because businesses, especially if you're doing more than 85 million pieces of mail a year, cannot simply absorb increased costs year after year," he said.

Representatives from Mutual of Omaha and First National Bank, both major Postal Service users, said it's too soon to tell how the reductions could impact service or operations.

Companies that depend on the Postal Service to ship packages are also sorting out what it would take to keep up promises of quick deliveries.

Sidney, Neb.-based outdoor retailer Cabela's uses both the Postal Service and UPS to handle shipments to customers. And it's a sizable number of packages; last year, 37 percent of the company's nearly $2.7 billion in revenue came from Internet and catalog sales.

Company spokesman John Castillo said he doesn't expect the cuts would cause any significant disruptions to service, because most shipping orders come with a standard three- to six-day window for delivery.

"Either one of those options — USPS or UPS — will get it there in that time frame," he said.

If customers want something faster or more specific, they pay a higher price.

But some businesses say they're expecting that any cuts would have a direct effect on their bottom line.

Ron Hunter, the general manager of Ag Valley Co-op in Edison, Neb., said the closure of the post office in that city would be significant hardship. The co-op has 20 locations across the state, but most of the billing and other paperwork goes through Edison, a town of fewer than 200 people in the south-central part of the state.

Ag Valley spends about $40,000 each year sending some 85,000 pieces of mail.

A rural mail carrier, Hunter said, just wouldn't be able to move all of the mail — and at the right time.

If the co-op wasn't able to keep business running smoothly, Hunter worries that it could have a negative impact on the community. Its 75 workers nearly double the town's population every day and help make Edison a place where a post office can survive.

"Because we're here, we bring value to the town, creating services like that — that could possibly disappear," he said.

Hunter is one of several Nebraska residents and business leaders who have sent letters detailing their concerns to Sen. Ben Nelson, D-Neb., who has been pushing for action from legislators instead of immediate cuts. The Postal Service is expected to lose $14.1 billion next year, due in large part to declining mail volume and a 2006 law that required the agency to pre-pay billions of dollars in health care for employees.

Russell K. Jensen, the president of Boelus State Bank and treasurer of the village of Boelus, northeast of Grand Island, said a post office closure there would spell trouble for the business and the city. On days the bank runs statements, it turns out 300 pieces of mail. Right now, those are dropped off at the post office across the street.

Without that option, the bank will have to spend more time and money driving the statements to another town.

"There's no way we can stuff something like that in the mailbox," Jensen said.

He's also concerned about the state-required water samples that have to be regularly shipped from Boelus, some of them on ice, all of them to be received in a specific amount of time. The situation, he said, is particularly frustrating because it feels like some decision-makers have forgotten about small communities.

"They're just not thinking on this," he said. "They can pour all this money into foreign countries and they don't do anything for the people here."

Rep. Adrian Smith, R-Neb., said the delay gives Congress a chance to consider the impact of closing small post offices, 90 of them in Nebraska, and to look for longer-term solutions.

He said the proposed closures "would not even cover the one-year pay raise for postal union workers." Possible long-term solutions, he said, include pension and benefit reforms and adjustment of delivery methods.

Contact the writer:

402-444-1543, erin.golden@owh.com

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