Postal Service Could Eliminate 1-Day Delivery

Dec. 5, 2011 — -- The U.S. postal service wants to cut an estimated $3 billion in costs to avoid a bankruptcy, eliminating one-day delivery of first-class mail and potentially closing half of its mail processing centers in the country.

First-class mail could be delivered in two to three days, from the current one to three days in the continental U.S., the Associated Press reports. Next-day delivery could be a relic of the past starting next spring according to the postal service's plan sent to the Postal Regulatory Commission for review.

But, the postal service said mailers "who properly prepare and enter mail at the destinating processing facility prior to the day's critical entry time" could have their mail delivered the following delivery day." Delivery of periodicals could take two to nine days.

The postal service says it is projected to save up to $3 billion by 2015.

"The U.S. Postal Service must reduce its operating costs by $20 billion by 2015 in order to return to profitability," David Williams, network operations vice president of the postal service, said in a statement. "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."

On Sep. 15, the Postal Service announced it would begin studying 252 out of 487 mail processing facilities for possible closure but it has not yet confirmed closures of those facilities.

Senator Susan Collins, R-Maine, ranking member of the Senate Homeland Security and Governmental Affairs Committee, expressed her dismay at the plans announced Monday.

"Time and time again in the face of more red ink, the Postal Service puts forward ideas that could well accelerate its death spiral," Collins said in a statement. "Closing thousands of rural post offices, eliminating Saturday delivery, and slowing first-class mail delivery could harm many businesses and their customers."

The postal service did not immediately return a request for comment.

Collins introduced bi-partisan legislation, the 21st Century Postal Service Act of 2011, on Nov. 2 to help restructure the postal service. The bill was approved by the committee and is pending before the full Senate.

The U.S. postal service has been plagued by budget problems in part as digital communication has replaced traditional mail. The agency has butted heads with postal worker unions.

Collins' legislation would give the Postmaster General access to the money the postal service has overpaid into one of its pension funds -- Federal Employees Retirement System (FERS) -- and use it to offer buyouts or retirement incentives to reduce the active postal workforce by 100,000 or more employees over the next several years. The incentives could include either a cash buyout of up to $25,000, the cap for federal worker buyouts, or credited service years toward retirement annuity: up to one year for Civil Service Retirement System employees and up to two for FERS employees.

The postal service relies on the sale of postage, products and services to fund its operations and does not receive tax dollars for operating expenses.

Collins said the problem with the postal service's cuts is the combination of slower standards for First Class mail delivery, no Saturday delivery, Monday holidays, and processing centers located far apart.

"As the Postmaster General freely admitted to me, the result would be that a bill payment mailed on Thursday might not arrive until Tuesday in many cases," she said. "That long delay will drive more bill paying to electronic means, thus leading to still further declines in volume."

Collins said maintaining all the nation's rural post offices costs the Postal Service less than 1 percent of its total budget, while its labor costs are 80 percent.

"In addition, potentially hundreds of millions of dollars in savings could be available from consolidating area and district offices which would not have a detrimental impact on mail delivery," she said.