Postal Service to adjust delivery standards for network efficiency

The U.S. Postal Service will soon end afternoon collections at a large swath of the nation’s post offices, adding another day to delivery times for some outgoing mail and packages as part of a multi-year transformation aimed at reducing inefficiency and financial losses.

Some outgoing first-class mail will be delayed while still holding to the five-day expected service range, the independent agency acknowledged in an announcement Wednesday. Periodicals, marketing flyers and bound printed material will move faster as they get raised to First-Class standards in the effort to create a more integrated network.

The new standards, which will be implemented in two phases beginning April 1, are designed to facilitate operational initiatives pushed by Postmaster General Louis DeJoy. Under the plan to optimize regional transportation, the Postal Service is reducing the number of truck trips and mail collections at most postal facilities farther than 50 miles from a processing plant to eliminate inefficient truck runs. It is also creating a nationwide network of regional processing distribution centers and local processing centers that consolidate and reduce transportation lanes among facilities.

The Postal Service estimates the two initiatives will improve productivity and save at least $3.6 billion per year once fully implemented, or $36 billion over 10 years, from transportation, mail processing and real estate cost reductions. 

The decision to revise service standards ignores recommendations by the Postal Regulatory Commission. The PRC faulted management’s network modeling, operational preparedness and “overly optimistic” projections for cost savings, and determined the proposals would have a significant negative impact on rural communities. According to the advisory opinion, about three-fourths of zip codes will be impacted by the service change. DeJoy, who last week gave notice of his intent to resign, recently issued a blistering response to the PRC’s criticism. 

“In lieu of a fair and comprehensive assessment, however, the PRC’s advisory opinion presents a one-sided narrative that mischaracterizes the Postal Service’s proposal, ignores the benefits it can be reasonably expected to yield, baselessly magnifies its alleged downsides, downplays the necessity of financial self-help, and makes unrealistic demands that would, if heeded, impede urgently needed progress,” the Postal Service echoed in a formal rulemaking about the standards. 

The Postal Service has lost more than $100 billion since 2007, including $9.5 billion in the 2024 fiscal year ending Sept.

The regional transportation optimization will kick off April 1 with the addition of an extra day to expected delivery times for First-Class mail originating from remote post offices and zip codes.  The goal is to better fill trucks by consolidating mail on fewer trips. On July 1, the new standards will go into effect for processing centers transporting mail to remote areas.

Current standards require the Postal Service to conduct separate trips to drop processed mail at local post offices in the morning for same-day delivery and then pick-up volume from there in the afternoon bound to processing centers, or pay trucking vendors to wait several hours between the outbound and return legs of their routes. The regional transportation optimization initiative aims to eliminate some of the costs and waste associated with excess trips by allowing certain mail and packages to be picked up the next day from the post office by the same truck that also dropped off mail for delivery that day. 

Nearly all of the 17,500 comments received during the rulemaking process raised concerns that the proposed changes would slow down delivery of critical items, such as bills, checks, election mail, business supplies and medicines.

The revised service standards will improve service reliability and provide two-to-three-day turnaround service within a region, the U.S. Postal Service said. More than 80% of mail volumes for primary products will be unaffected by the changes.

Similar changes will be made with respect to the Postal Service’s competitive products.

“The Postal Service has been historically burdened by service standard regulations and onerous business rules that have not been appropriately adjusted to account for volume and mail mix changes, forcing costly and ineffective operations,” said Postmaster General DeJoy in the announcement, referring to the secular decline in mail volume. “For decades — and most specifically during the last three years — Congress has actively resisted operational solutions and meaningful change. By implementing the new standards and the operational initiatives to which they are aligned, we will be better able to achieve the goals of our modernization plans and create a high-performing, financially sustainable organization, which is necessary to achieve the statutory policies and objectives established for the Postal Service by law.” 

The “Delivering for America” plan in four years has lowered annual transportations by $1.8 billion by eliminating redundant truck routes and rationalizing the use of air and surface transportation, according to the Postal Service. It saved another $2.3 billion per year by improving plant productivity and eliminating unnecessary facilities. Pricing and product adjustments have increased annual revenue by $3.5 billion.

The agency said it will share information at its retail locations and with commercial customers to ensure customers are aware of the changes. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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