The United States Postal Service has announced the possible closure of as many as 3,200 of their nearly 33,000 locations. The official USPS statement blames a decline in mail volumes, citing email, online bill paying, and the recession as reasons for the closings. As volumes have been dropping the USPS top-line higher fuel prices have had an impact on the bottom-line.

The drop in mail volume is significant enough to necessitate downsizing. Last year postal volume dropped by a little more than 4 percent and this year’s drop is estimated to be 14 percent. USPS tried to make up the lost revenue by raising rates, an action many claim is partially contributing to the volume decrease.

Contraction strategies are a viable, but painful, aspect of successful business development. However many companies will delay contraction until after a bankruptcy filing so they can walk away from the leases of shuttered outlets. Yet proper advanced analysis of market threats can allow a company to prepare for downturns in sales or increases in expenses. Southwest Airlines, for one, has been able to have consistently lower fuel expenses due to advances analysis of market threats.

Downsizing typically takes one of three forms: reducing the number of stores or outlets, cutting back on offered products or services, or headcount reductions. Each must be carefully examined for short and long term liabilities and benefits. The difficulty in all three is that it is hard to give up what the company worked so hard to gain. Employees and leaders involved in site selection, product or service development, or hiring have emotional attachments to the corporate assets on the chopping block. Most companies find that using an outside consultant allows an unbiased approach resulting in better decision making.

In addition to shedding outlets, USPS will consolidate some operations and has asked Congress for permission to cut down on the number of delivery days. Each day cut from the schedule would save $3.5 billion annually. This seems like a logical approach as a recent USA Today poll from Gallup found that more Americans would rather the Postal Service reduce days than raise rates. Of course the poll would probably be different if taken in neighborhoods around post offices on the closure list.

Proof of this can be seen by examining Detroit Public Schools. Their enrollment has dropped by slightly more than fifty percent since 2000. With 84,000 fewer students there should be a major asset reduction. However taxpaying residents and alumni add to the people with emotional attachment to the assets needing to be shed. Each announced downsizing is met with immediate emotional negative reaction causing the process to be dragged out.

Author Rick Weaver is founder of Max Impact, a leadership and business strategy development company. His white paper “You’re Not Running a Vineyard — so stop your whining!” provides insight into lame excuses for poor performance, is one of the complimentary resources available in the MaxImpact Resource Center.

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