The United States Postal Service (USPS) has announced plans to retain certain local mail processing operations at the Chattanooga postal facility in Chattanooga. This decision to leave those operations in Chattanooga is made possible due to a proposed operational strategy aimed at increasing efficiency, improving service quality, and saving USPS an additional $3 billion per-year nationwide.
This proposed strategy was outlined in its request for an advisory opinion filed with the Postal Regulatory Commission. The significant savings generated by this proposed operational strategy would enable the Postal Service to absorb the cost of continuing to provide local cancellation service in Chattanooga. As a result, the Postal Service would now not need to relocate certain local originating mail processing operations outside of the Chattanooga facility. This means that mail that is collected in Chattanooga and destined to another address there would not leave the region for processing.
This update follows a previous USPS decision to shift local originating mail processing operations to the Nashville Processing and Distribution Center (P&DC) and Music City Annex in Nashville, in 2025.
The Chattanooga facility will also see changes designed to boost its services, thanks to a previously announced USPS investment of up to $8 million. These changes will not impact business mail entry, Post Office, station, and branch retail services. Once the Chattanooga facility becomes a Local Processing Center (LPC), it is expected to handle package mailing and shipping, letters, and flats. The LPC is also expected to offer express services and accept bulk and permit mail, further improving its delivery services.
"Our proposed operational strategy, which is currently under review by the PRC, will generate substantial savings for the Postal Service. This strategy provides a solution that will ensure our organization can cover the cost of local originating mail processing operations in the Chattanooga facility,” said Postmaster General Louis DeJoy. "Moreover, our Delivering for America plan is channeling up to $8 million into upgrading the Chattanooga facility. This investment goes beyond just enhancing the work environment for our employees. It's about equipping the facility with the necessary technology and resources to deliver top-notch service to the local community for the foreseeable future."
Proposed operational improvements and corresponding refinements within the current service standards will enable USPS to improve efficiency, save money, and sustain certain local originating mail processing at the Chattanooga facility.
On Aug. 22, the USPS began the regulatory process with the PRC, proposing operational improvements and refinements within current service standards. These enhancements aim to strengthen service reliability, increase cost efficiency, and boost overall productivity. The changes, which would take effect after this year's Election and Peak Season, will allow certain local originating mail processing operations to remain in Chattanooga due to significant savings.
Earlier this year, the Chattanooga processing facility was part of the Mail Processing Facility Reviews. The main objective of these reviews was to find cost efficiencies, primarily through transportation savings. By implementing the changes proposed in the request filed with the PRC, the Postal Service intends to achieve further operational efficiencies and optimizations. These would be in addition to transportation savings but achieved through different strategies than those used in certain Mail Processing Facility Reviews.
If the regulatory process is successful, there will be no change to the location for certain local originating mail processing and cancellation operations in Chattanooga. In simpler terms, single piece mail that is sent from Chattanooga to be delivered in Chattanooga will continue to be processed at its current location.
The Postal Service initially anticipated staffing impacts due to the proposed move of certain local originating mail processing operations to the Nashville P&DC and Music City Annex in Nashville. However, with the decision to keep these operations at the Chattanooga facility, there would be no anticipated employee impacts.
This remains consistent with the stance taken in March, where no career layoffs were part of the initiative. In fact, as part of its investment strategy in the Chattanooga facility, the Postal Service is focusing on enhancing package processing and shipping capacity. This could potentially lead to increased plant activity and a future need for additional staffing support.
As announced in March, the Postal Service will invest up to $8 million in the Chattanooga LPC, which will result in expanded and streamlined package and mail processing and distribution capabilities for the facility. These funds will also be used for modernization efforts and deferred maintenance along with new workplace amenities for Postal Service employees such as new lighting and renovated bathrooms and break rooms.