Tue. Oct 19th, 2021

© Reuters. FILE PHOTO: U.S. Postal Service (USPS) workers load mail into delivery trucks outside a post office in Royal Oak, Michigan, USA on August 22, 2020. REUTERS / Rebecca Cook

By David Shepardson

WASHINGTON (Reuters) – The U.S. Postal Service (USPS) finalized an effective plan on Friday (October 1st) to curb some first-class mailings as part of efforts to cut red ink.

Postmaster General Louis DeJoy proposed in March to revise existing service standards from one to three days to one to five days for first-class mail. The USPS said Friday that 61% of first-class mail will remain at its current standard.

The USPS said in a notice published in the Federal Register current regulations require “relying heavily on air transportation, using cargo air carriers and commercial passenger air carriers.”

Delivery standards will be slower in approximately 7% of periodicals.

Airplanes, the USPS added, are less reliable than surface transportation and cost much more because of “weather delays, network congestion, and ground stops in air traffic control.”

“Adding a day or two to current service standards for first-class mail and periodicals would allow the postal service to transmit a larger volume of mail within the contiguous United States via surface transportation,” he said.

While acknowledging “some awkward changes,” DeJoy defended the plan early Friday at a board meeting of governors, saying he pledges to deliver to “all the nation’s addresses, six days a week, and strives for financial sustainability “.

On Friday, the USPS posted a quarterly net loss of $ 3 billion, with a 1.1% increase in first-class mail shipments to 12.1 billion pieces. But “volumes remain below pre-pandemic levels and we expect continued secular declines,” he added.

For the first-class mail minority affected by the slower delivery window, “the standard would only change one or two days (most of that volume experiences a one-day change),” the USPS said.

USPS added that it has been unable to meet the “service performance targets that have existed for many years and that these service failures illustrate the weakness of the current transportation model.”

In June, 20 state attorneys general called on the U.S. Postal Regulatory Commission to reject plans to slow some first-class deliveries, saying allowing this to happen could hurt the ability of local governments to perform essential functions.

DeJoy presented in March a plan to reduce projected losses by $ 160 billion over the next decade, with changes in service standards a key part.

USPS has struggled with poor delivery performance over the past year, facing a huge boost in packages and staffing problems due to the coronavirus pandemic. He said on Thursday that by July he had delivered on time 89% of first-class mail, an increase of 1.5 percentage points.

Starting Aug. 29, USPS will raise prices for first-class postage stamps to 58 cents from 55 cents. Price hikes are needed because, over the past decade, mail volume has decreased by 46 billion pieces, or 28%, while first-class one-piece mail has decreased by 47%, he said. USPS.

Congress is considering a plan to provide USPS $ 46 billion in financial relief for 10 years, including removing the requirement that USPS pre-finance retiree health benefits for 75 years.

The agency has reported net losses of about $ 90 billion since 2007. One reason is that 2006 legislation requires it to pre-fund more than $ 120 billion in health and pension responsibilities for retirees, a requirement that unions have described as an unfair burden that other companies do not share.

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