The U.S. Postal Service offers plan for slower and more expensive mail to help cut costs

Photo (c) Stefania Pelfini, La Waziya Photography - Getty Images

The 10-year plan is aimed at preventing a $160 billion deficit

The U.S. Postal Service (USPS) has proposed a 10-year plan to help it improve its finances -- a plan that would increase postage prices and slow mail delivery.

USPS Postmaster General and CEO Louis DeJoy said the plan would head off a $160 billion deficit over the next 10 years without a government bailout, which DeJoy said the company does not want.

"The need for the U.S. Postal Service to transform to meet the needs of our customers is long overdue," DeJoy said. "Our plan calls for growth and investments, as well as targeted cost reductions and other strategies that will enable us to operate in a precise and efficient manner to meet future challenges, as we put the Postal Service on a path for financial sustainability and service excellence."

Included in the proposed cost cuts is a reduction in the speed at which the mail travels. It reduces the current one-to-three-day service goal for first-class mail to one-to-five days. However, the plan shows that 61 percent of current first-class mail would maintain the current standard.

More trucks, fewer airplanes

USPS would use more ground transport to move the mail, reducing its reliance on more expensive air transport. At the same time, the plan calls for consolidating mail processing and reducing hours at some post offices.

The plan also projects increased revenue. It estimates it could receive $44 billion in added revenue through various price increases. It also expects to generate $24 billion in net revenue in part from enhanced package delivery services for business customers, including same-day, one-day, and two-day delivery offerings.

USPS said earlier this month that it could not meet the Biden administration’s goal of replacing its fleet of delivery trucks with electric vehicles without a federal subsidy. Under current projections, DeJoy said USPS would only be able to electrify about 10 percent of its fleet.

Cool reception

USPS’s proposed 10-year plan did not get a warm reception on Capitol Hill. House Speaker Nancy Pelosi (D-Calif.) said Congress may include provisions in an upcoming infrastructure bill to ensure the company can maintain current levels of service.

“Unfortunately, Postmaster DeJoy’s planned cutbacks, if enacted, would undermine this mission, resulting in serious delays and degradation of service for millions,” Pelosi said in a statement.

Democrats generally panned the plan. Rep. Gerry Connolly (D-Va.) called it “draconian.” Rep. Carolyn Maloney (D-N.Y.), who chairs the House Oversight Committee, said she is “extremely concerned,” saying Congress and the public should “fully review” the plan and “provide substantive feedback.”

USPS was originally a department of the U.S. government, but Congress changed its status in 1970 to make it an independent agency.

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