The U.S. Postal Service has announced it will move forward with its proposal to change service standards, including cuts to first-class mail that will slow delivery, beginning next spring.
This action is being taken in response to on-going financial challenges caused by the dramatic and continual decline in First-Class Mail volume and the resulting revenue loss.
"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."
This is part of the overall savings expected from the network optimization initiative, which is projected to save up to $3 billion by 2015.
The size of the existing Postal Service network is dictated by the current overnight transit time in existing service standards. The Postal Service is proposing, through the rule-making process, to move first-class mail to a two- to three-day standard for contiguous U.S. destinations, basically ending next-day deliveries of stamped letters.
However, there would be an opportunity for mailers who properly prepare and enter mail at the correct processing facility prior to the day's critical entry time to have their mail delivered the following delivery day.
The plans also include closing more than 250 mail processing centers around the country, including 10 in Ohio, and the shutdown of about 3,700 local post offices.
On Sept. 15, 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.
The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.