DeJoy Proposed Major US Postal Service Changes

By on March 25, 2021 0 814Views

The U.S. Postal Service has released its 10-year plan that calls for major changes to avoid a projected $160 billion shortfall.

The plan, named “Delivering for America,” looks to expand package delivery services and increase the prices for postage.

Specifics on the proposed price hike weren’t provided in the proposal’s outline, but last November, the Postal Regulatory Commission granted the service the flexibility to raise the costs of products.

Under the plan, the U.S. Postal Service will maintain six-day mail delivery services. Package delivery services could expand Sunday delivery to include certain types of shipping options. Customers could also have more ways of telling carriers where to leave or pick-up packages, notifying carriers to hold mail or scheduling redelivery of packages.

The expansion of delivery could generate $24 billion in revenue over a 10-year period.

Part of the goal is to improve on-time delivery performance, increasing reliability to at or above 95%.

The proposal also includes a $40 billion investment into post office and facility upgrades, new mobile devices for carriers, new employee uniforms and improved workforce training. The service recently awarded a $482 million contract to modernize its vehicle fleet. The first batch of new vehicles is expected to appear in 2023.

“The need for the U.S. Postal Service to transform to meet the needs of our customers is long overdue,” Postmaster General and Chief Executive Officer Louis DeJoy said in a statement. “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.”

The U.S. Postal Service has grappled with a deficit for more than a decade.

According to DeJoy, the Postal Service has lost $87 billion over the last 14 years. Part of that is due to COVID-19. Officials said the agency lost $2.2 billion in the early months of the pandemic due to the decrease in mail volume and increase in package volume. The workforce also took a hit as many employees contracted the coronavirus while others didn’t work during the lockdown.

The service recently reported its first-quarter earnings for fiscal 2021, which runs from October to December 2020. First-class mail revenue decreased by $177 million, or 2.7%, compared to the same time period from the previous year. Shipping and packages increased by approximately $2.8 billion, or 42.1%.

“While the record package volume we saw during the holiday season was encouraging, we are still operating in unprecedented times as we navigate the impacts of the COVID-19 pandemic, and the results from the past quarter may not be sustainable,” Postal Service Chief Financial Officer Joseph Corbett said last month. “Our mail volumes continue to decline due to the pandemic.”

“We continue to face imbalances in our business model that must be fixed through legislative change,” Corbett added.