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Postmaster General unveils sweeping changes to improve USPS' financial health, reliability

USPS announces prices might increase in 2021
Posted at 5:50 PM, Mar 23, 2021
and last updated 2021-03-23 18:43:59-04

CLEVELAND — Postmaster General Louis DeJoy unveiled the highly anticipated and highly scrutinized 10-year plan for the United States Postal Service on Tuesday morning. The sweeping, 58-page proposal includes the possible consolidation of post offices, longer first-class mail delivery times, and an expansion to package delivery days.

DeJoy's plan, dubbed "Delivering for America" comes as the USPS continues to report significant annual losses and declines in on-time delivery rates, especially for first-class mail. In the proposal, officials announced the USPS is projected to lose nearly $10 billion in 2021 and possibly more than $20 billion by 2030 under the current system. USPS also has more than $100 billion in unfunded pension obligations to retirees.

He believes the USPS could achieve a positive net income within three years and a break-even operating performance over the next 10 years.

The lengthening of guaranteed delivery times for first-class mail ranks among some of the biggest changes that consumers are most likely to notice. Under the 10 year plan, first-class mail would be delivered within three to five days. According to USPS data, the on-time delivery rate for first-class mail has been in steady decline over the past eight years. By dialing back the guaranteed delivery window, the agency will be able to achieve a more realistic service standard while also cutting costs, the plan states.

This will be achieved primarily through the elimination of using aircraft to transport first-class mail. The plan notes that air service comes at a great cost to USPS, which doesn't own its own planes, and fluctuations in air cargo capacity can negatively impact on-time delivery rates.

Reducing the usage of aircraft is only part of the distribution system overhaul.

Currently, there are 11 steps in the 'middle mile' of delivering mail, which includes transporting the mail from the originating plant to a terminal and then on an aircraft, which arrives at a hub. That process is then reversed when the mail reaches its destination. By relying on semi-trucks and other ground transportation, the middle mile is reduced to only 5 steps.

The plans come as the USPS continues to try to stabilize after a record-setting holiday season and the challenges brought on by the pandemic. The crushing volume of packages, cards, and letters created substantial delays in deliveries.

"I don’t think they really need to recreate the wheel. They just need to fix it," said Jakarta Steele of Parma Heights. "Everything [used to come] on time. Nowadays, you’re checking to see if you got it on time or to see if it’s delayed."

The 10-year plan also hints at the possible consolidation of low-traffic local post offices or, perhaps, the reduction of operating hours at other post office locations. Details of any possible closures have not been released.

"Overall, we project that only a small percentage of our Post Offices will have hours modified, and only a small percentage of city stations and branches will qualify for consolidation," officials said in a FAQ page on the plan's website. "The Postal Service will request advisory opinions from the Postal Regulatory Commission concerning our retail network realignments. We will share additional details as the Postal Service moves forward with these initiatives."