Postal Service: Slower Mail Can Save Billions

The U.S. Postal Service has a plan that it says will save billions of dollars and help it keep the doors open a bit longer.  And what do you think it is? Faster mail? Better service?  Lower Prices?

No, the USPS says the answer is slower mail. By taking longer to deliver letters, checks, Netflix DVDs. newspapers, magazines and junk mail, the Postal Service says it can save billions.

“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.”

The problem, of course, is that there simply isn't as much mail as there used to be.  As more and more consumers and businesses abandon letters for email and paper checks for online transactions, the volume of first-class mail continues to plummet.

Pays the freight

It's first-class mail that basically pays the freight for everything else, so its decline has a huge impact on USPS' bottom line.

The Postal Service says the size of its network is dictated by its service standards, which currently call for overnight delivery of much first-class mail.

What USPS is proposing is to cut the service standard for first-class mail to a 2-3 day window instead of overnight for nearby destinations. Mailers who pre-sort their mail and deliver it to the proper sorting facility would still be able to get delivery the following day in most cases, USPS said.

Back in September, the Postal Service announced it would begin studying 252 out of 487 mail processing facilities for possible closure. At that time, the Postal Service also announced it would be considering changes to service standards. Today's announcement is the next step in that process.