Attorneys general from 21 states have called on the U.S. Postal Service’s regulator to direct the agency to abandon its plans to expand parcel-delivery operations until it resolves its persistent problems with first-class mail delivery.
In a June 21 letter to the Postal Regulatory Commission (PRC), the attorneys general said so-called market dominant products like first-class mail are, by law, the Postal Service’s top priority. Parcel services as well as Express and Priority Mail, all of which are classified as “competitive products” because they compete with private-sector rivals, should not take precedence, they said.
In March, the Postal Service unveiled a 10-year plan that effectively prioritizes the agency’s fast-growing parcel business over first-class mail, which has historically been its largest and most profitable service line. The Postal Service has vowed to hit a 95% on-time delivery target for all parcel and mail traffic.
At the same time, however, it proposed to widen the delivery windows for first-class mail, an acknowledgment of the cost and complexity of delivering 52 billion pieces of mail — the volume recorded in FY 2020 — across a myriad of distances and locales, and still hit the two- to three-day target that had been set as the delivery standard for all USPS deliveries in the lower 48 states.
In their letter, the attorneys general said the proposed changes would subject nearly half of first-class mail moving within the lower 48 states to longer delivery times, with more than 30% of mail delivered in four to five days instead of two to three days.
The Postal Service’s new policy “seeks to degrade service in its market-dominant products in order to facilitate growth in its competitive products,” the attorneys general said. Aside from potentially impacting consumers who rely on the Postal Service to deliver life’s vital necessities like Social Security checks and medications, the policy runs counter to the agency’s statutory requirement that it give top priority to the movement of mail, the attorneys wrote.
“While the Postal Service would soon take up to 5 days to deliver first-class mail in the contiguous United States, it also plans to redesign its transportation network so packages “can reach up to 90 percent of the population in one day and more than 95 percent of the contiguous U.S. population in two days,” the letter said.
Postmaster General Louis DeJoy was heavily criticized through much of 2020 for implementing operational changes that were designed to boost efficiency and cut costs but instead had a negative impact on mail processing and delivery reliability. The Postal Service redeemed itself with what nearly everyone agreed was a stellar performance in delivering mountains of mail-in ballots during the 2020 presidential election.
The changes in the parcel portfolio are one component of an ambitious plan to transform the Postal Service from a consistent money loser to a break-even position by 2023 and to modest profits through the rest of the decade, DeJoy said Tuesday. Without the changes outlined in the plan, the Postal Service stands to lose $160 billion over the next 10 years and will likely need a federal bailout, DeJoy said. The agency lost $9.2 billion in its 2020 fiscal year, which ended last Sept. 30, and has lost more than $87 billion over the past 14 years.