USPS to Drop Overnight Guarantee for First-class Mail

The United States Postal Service (USPS) has announced they are looking to make another cost- savings change in order to further relieve the financially struggling agency.

CNN Money reported the USPS is planning to announce a proposal that will outline a policy that no longer delivers next-day first-class mail. As a part of this proposal, the USPS wants to drop next-day delivery (one to three days) and stretch the timeframe to two to five days delivery. CNN reports Art Sackler, executive director of the National Postal Policy Council, a trade group for large mailers, said, “This isn’t a change we’re happy about,” adding, “But if they don’t cut somewhere and substantially, they’re going to run out of cash next summer. It’s one of the lesser evils.” The USPS says customers, “on average” receive mail the day after it was mailed and, while the postal service says they’ll still aim for next-day delivery, it won’t happen as often if the new proposal takes effect. Currently the USPS has been severely struggling due to a combination of issues including decision-making constraints, having to compete with the Internet and layers of bureaucracy and the mandates that accompany it, such as the $5.5 billion prepayment into its retirement fund. The $5.5 billion dollar payment was postponed, however that payment is now coming due on Dec. 18, and based on the agency’s severe deficit, the money does not seem to be available.

“These changes [elimination of next-day delivery] are being proposed, because they will allow for significant consolidation of the entire postal network in terms of facilities, processing equipment, vehicles and employee workforce,” said U.S. Postal Service spokeswoman Sue Brennan.

Currently the USPS has been steadily laying off employees and closing post offices. Additionally the agency is looking to increase the price of postage in early 2012 and the idea of shutting down service on Saturdays has been bounced around for over a year. USPS is also looking to close down several additional mail processing centers, such as the one in Orange County, New York. The USPS plans to announce the new delivery standards in a filing with the Postal Regulatory Commission on Monday. Update Dec. 5: The official press release has been issued and can be found here.The release said the agency is seeking to save $2.1 billion with this proposal and included the following statement,

“The U.S. Postal Service must reduce its operating costs by $20 billion by 2015 in order to return to profitability,” said David Williams, vice president, Network Operations. “The proposed changes to service standards will allow for significant consolidation of the postal network in terms of facilities, processing equipment, vehicles and employee workforce and will generate projected net annual savings of approximately $2.1 billion.”