U.S. Postal Service proposes plan to slow current first-class delivery standards

WASHINGTON – The U.S. Postal Service (USPS) on Tuesday outlined a proposed 10-year strategic plan that would slow current first-class delivery standards and raise some prices to stem $160 billion in forecasted red ink over the next decade.

The plan would revise existing first-class mail letters service standards from the current one to three days to one to five days. USPS said 61% of current first-class mail volume would stay at its current standard. More deliveries would be shifted to trucks rather than airplanes, consolidate mail processing, and cut hours at some retail locations.

USPS Postmaster General Louis DeJoy, former President Donald Trump’s supporter, named last year to head USPS, said without changes the Postal Service would need a “government bailout” — something it does not want to seek.

USPS seeks considerable financial relief from Congress and the Biden administration from pre-funding obligations and other changes that could address $58 billion in expected losses.

From 2007 through 2020, net losses totaling $86.7 billion were reported by USPS. Congress in 2006 passed legislation requiring USPS to pre-fund more than $120 billion in retiree health care and pension liabilities is one reason for the red ink. Labor unions have called this requirement an unwanted burden that other businesses do not share.

Representative Carolyn Maloney, who chairs the committee that oversees USPS, has circulated draft legislation to address pre-funding obligations and other USPS financial issues.

USPS says the current standards are “not achievable.” The average first-class mail service performance for the last budget year was 89.7 percent, more than 6 percentage points below target.

The plan seeks to move more first-class mail by trucks rather than air but won’t eliminate the use of airplanes.

USPS vows to spend $11 billion on vehicles and would commit to an all-electric delivery fleet by 2035 with assistance from Congress. USPS said it could electrify its fleet to the “maximum extent” operationally feasible if it received about $8 billion in government assistance at the beginning of the month.