USPS says it wants to save $3 billion a year. Some rural mail delivery could get slower.
The U.S. Postal Service on Thursday said it needs to shave more costs from its operations to get into better financial shape. To do that, the postal agency wants to overhaul its delivery logistics, resulting in some customers likely seeing a slowdown in their mail delivery.
The new plan, which will be filed with the USPS' regulatory commission, comes about three years after the mail service embarked on a 10-year plan to stanch billions of dollars in losses and put the agency on the path to profitability. The 10-year plan, implemented by Postmaster Louis DeJoy, also slowed delivery standards, with the service guaranteeing five-day delivery instead of its previous three-day delivery window.
The proposed changes will shave about $3 billion a year, the USPS said on Thursday. But, it added, "Depending on location, time and distance, expected time to deliver will increase for some ZIP code pairs."
The USPS has also boosted the price of Forever stamps several times within the past few years, prompting some critics to say that customers are paying more for worse service. With the proposed changes, the slower service could be felt by rural areas and for mail that needs to travel long distances, DeJoy told the Washington Post.
"At the end of the day, I think some portion of the mail showing up 12 hours later, I think it's a price that had to be paid for letting this place be neglected," DeJoy told the publication.
Under the proposed changes, all mail would still be delivered in its service standard of delivery within two to five days, a USPS spokesman told CBS MoneyWatch. The majority of mail from rural areas is currently delivered in 3 days or less, which would continue to be the case, he added.
Mail delivery from some rural areas, however, may take an additional 12 to 24 hours, but would still arrive within a range of two to five days, he added. In some cases, a piece of mail that might have taken three days to arrive could take four days instead, for example, the spokesman added.
A USPS fact sheet about the proposed changes notes that the plan would have no impact on 75% of first-class mail.
The combination of higher prices and slower delivery raises the risk that the USPS will lose more customers, critics say. That would come at a time when the postal service has already seen a sharp drop in first-class mail volume, which has slipped to 28% to 46 billion pieces in 2023 from almost 64 billion pieces in 2014, according to USPS data.
"Any effort to degrade service while raising prices is a recipe for a death spiral at the Postal Service," said Rep. Gerry Connolly, a Democrat from Virginia and critic of DeJoy's, in a statement emailed to CBS MoneyWatch.
He added, "This is the second time Postmaster General DeJoy has proposed lower service standards. He might as well announce a return to delivering mail by horse and buggy."
The Coalition for a 21st Century Postal Service, an advocacy group for greeting card, magazine and newspaper publishers, also expressed concern about the proposed change. It said it's waiting to hear more details and an explanation about the plan's savings estimates.
"With record high postage prices and slower service, we are wary of what these changes will mean for rural communities and the rest of the country," the group said in an email to CBS MoneyWatch. "Service can only be degraded so much, and prices increased so high, before individuals and businesses lose confidence in the postal system, as the current steep slide in business seems to indicate."
Losses at the USPS
All told, the Postal Service has amassed more than $87 billion in losses from 2007 through 2020.
Details were unveiled by the Postal Service ahead of a September 5 meeting in which the proposed changes will be discussed with stakeholders before being submitted to the Postal Regulatory Commission, the USPS' regulatory body.
Election mail and holiday shipments won't be affected because the proposed changes would not take place until the next calendar year, officials said. Medications also should continue to be delivered at their current speed, or faster, under the proposal, officials said.
The plan could also increase the speed of some mail delivery, because of changes to better utilize existing ground networks, officials said.
The proposal reflects the Postal Service's move to overhaul its processing and transportation network with an emphasis on large regional hubs, something that is already beginning to take place in Atlanta; Richmond, Virginia; and Portland, Oregon.
Postal customers who live closer to regional hubs will see the greatest reductions in transit time for mail, the USPS said.
— With reporting by the Associated Press.