The U.S. Postal Service announced on Monday that it will be implementing cuts to first-class mail next spring due to its dismal financial outlook. The changes will result in a slower delivery service and is the first time in 40 years that change of this type has taken place at USPS.
This is all in an effort to cut nearly $3 billion dollars in cost for the agency that has steadily lost customers for the past decade due to the rise of the Internet.
The cuts are still being finalized, but if passed it would close approximately 250 of the 500 mail processing centers around the country as early as next March. The coming changes means that first class mail will not be delivered within one to three days as is accustomed. Instead, the recipient could expect the mail two to three days after it is sent, thus eliminating the option of receiving it the next day. There will also be a one cent increase in the price of sending first-class mail, beginning Jan. 22.
Reportedly, delivery times for Priority and Express mail will not change.
Postmaster General Patrick Donahoe said in an interview with The Associated Press that the agency has to “act while waiting for Congress to grant it authority to reduce delivery to five days a week, raise stamp prices and reduce health care and other labor costs.”
“We are forced to face a new reality today,” Donahoe said in a released statement.
“First-Class Mail supports the organization and drives network requirements. With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic. Since 2006, we have closed 186 facilities, removed more than 1,500 pieces of mail processing equipment, decreased employee complement by more than 110,000 through attrition and reduced costs by $12 billion.”
According to the USPS, mail volume has dropped by more than 43 billion pieces in the last five years and that decrease is expected to continue. First class mail has dropped by 25 percent in the past five years and approximately 50 percent in the past decade.
Time Magazine reports that nearly 42 percent of all mail delivered currently is First Class delivered the next day, so this change will affect many USPS customers.
David Williams, vice president of network operations for USPS, reiterated the urgent need for change, saying, "We have to do this in order for the Postal Service to become financially viable," according to Fox News.
USPS expects to have a $14 billion debt this year. This debt is mainly due to the fact that the USPS has delayed its congressionally mandated $5.5 billion pre-payment for retiree health benefits and is expected to default on its last payment. The agency does not receive any tax dollars from the government but is under congressional control.
Overall, the USPS is hoping to save $20 billion by 2015.