Postal Updates

Commission casts doubt on DeJoy’s slower mail delivery plan

Jul 23, 2021, 10 AM

By Bill McAllister, Washington Correspondent

The Postal Regulatory Commission has cast doubt that Postmaster General Louis DeJoy’s plan to slow mail delivery will work or save the United States Postal Service as much money as it expects.

A day after endorsing the higher stamp prices the Postal Service requested, the commission urged caution on DeJoy’s plan to lengthen the time for delivery of first-class mail from three days to five days and questioned the benefits such a change would bring.

The commission’s doubts were raised July 20 in an advisory opinion on the planned changes.

While the Postal Service is free to implement the changes, the five-member commission urged the agency to reconsider a number of issues first, including the certainty of its projected cost savings and that customer satisfaction can be maintained.

In its advisory opinion, the commission expressed doubts about both.

“The Commission finds that the estimated cost savings may be inflated as the data are not complete and several underlying assumptions appear untenable,” it said.

The estimated cost savings, which the commission said were $165.9 million, are based on a year when costs were “in flux compared to prior years.”

“Further, even if the Postal Service’s cost savings estimates are accurate, the Commission finds that the proposal does not substantially affect the Postal Service’s financial condition,” the PRC said.

The commission noted in a news release that its ruling was “advisory in nature” and it does not have a veto over the Postal Service’s plans.

“As a result, the Postal Service is not required to implement or take any further action with regard to the commission’s advisory opinion,” the PRC said, adding it urges the USPS to “review these recommendations with serious consideration.”

The news release also noted that the PRC was concerned that the mail delivery plan “appears to target mail that consistently fails to meet service performance goals and has the most opportunity for improvement.”

In the news release, the commission said it was concerned that the USPS “did not conduct any operational or pilot testing” of its proposed new delivery standards.

It also warned that any savings from transportation costs, such as moving from air to surface transport, would likely be consumed by “the additional costs associated with the growth in packages.”

Package mail grew sharply during the COVID-19 pandemic, while first-class letters, the foundation of postal revenues, continued to decline.

The USPS has predicted that any loss in first-class mail and periodicals from the changes “will be modest,” the release said.

But that conclusion “is premised upon analysis of customer satisfaction and demand that relies on numerous unproven assumptions,” the PRC said.

At issue were the delivery times for what the commission said were 38.5 percent of first-class mail and 7 percent of periodicals.

But the five-member commission held “that the Postal Service cannot conclude with any statistical confidence the impact to First-Class Mail and Periodicals mail volume as a result of an increase in days to delivery.”

Kimberly Frum, a Postal Service spokeswoman, said, “We are reviewing the recommendations of the Postal Regulatory Commission and will consider them as we move forward with our plan.”

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