The US Postal Service said on Thursday that it needs to reduce costs more to make its operations and business profitable and improve its overall financial condition. To do that, the postal agency is looking to overhaul its delivery logistics. This might result in a delay in mail delivery for some people.
Three years ago, USPS embarked on a 10-year plan to adjust its operations to stanch billions of dollars in losses and put the agency on its way to profitability. Now, this new plan extends the previous plan to take the company on a profitable path. The 10-year plan introduced by Postmaster Louis DeJoy also includes slowing down the delivery service. Instead of USPS’s previous three-day delivery plan, it will now guarantee a five-day delivery.
The changes proposed will shave off $3 billion a year, USPS said on Thursday. It also added, “Depending on location, time and distance, expected time to deliver will increase for some ZIP code pairs.”
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Moreover, the postal agency has also increased the price of their Forever Stamps several times in the last few years, prompting some users to say that they are paying extra for worse service. Now, with the proposed changes, the delivery of mail to rural areas or at long distances will slow down. DeJoy also 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.”
However, critics believe that slow delivery pace and higher prices will drive customers elsewhere, resulting in USPS losing a huge customer base. Moreover, this comes at a time when the postal agency has already lost 28% of its clientele. USPS’ first-class mail volume fell from 64 billion pieces in 2014 to 48 billion pieces in 2023. This has also resulted in huge losses throughout the years. According to the agency, it has amassed more than $87 billion in losses from 2007 to 2020. It will be interesting to see if this new plan of USPS will be able to drive it to a path of profit.
