USPS Downgrades First-Class Service

The U.S. Postal Service plans to move forward with its proposal to change service standards. This action, the USPS says, 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,” says 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 USPS network is dictated by the current overnight transit time in existing service standards. The USPS is proposing, through the rulemaking process, to move First-Class Mail to a 2-3 day standard for contiguous U.S. destinations; however, there would be an opportunity for mailers who properly prepare and enter mail at the destinating processing facility prior to the day's critical entry time to have their mail delivered the following delivery day.

On Sep. 15, the USPS announced it would begin studying 252 out of 487 mail processing facilities for possible closure. At that time, the USPS also announced it would be considering changes to service standards in an Advance Notice of Proposed Rulemaking published in the Federal Register. The Advance Notice filing was a formal effort to gather input from the public early in the process to ensure their views can be factored into the service change proposal.

The Postal Service will send to the Postal Regulatory Commission (PRC) a request for an advisory opinion regarding service standard changes associated with a significant rationalization of its mail processing network. Shortly thereafter, the Postal Service will publish a notice in the Federal Register soliciting public comment on the specific proposed changes.

Related Articles: U.S. Postal Service Plans to Lay Off 35,000

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