The USPS® unveiled its 10-Year Strategic Plan today. Highlights include a focus on financial sustainability, a modernization of the postal infrastructure and workforce, and a focus on package processing and delivery. These changes have raised concerns about First-Class™ mail Delivery Standards changes and another anticipated Market Dominant postage increase this year.
Highlights for the plan called “Delivery for America” include:
- Preserves affordable, six-day mail and expands seven-day package delivery
- Generates $24 billion in net revenue in part from enhanced package delivery services for business customers, including same-day, one-day, and two-day delivery offerings
- Improves cash flow to allow for the investment of $40 billion in the workforce, new vehicles, improved Post Offices, technology improvements, and infrastructure upgrades
- With congressional support accelerates a move to an electric delivery vehicle fleet
- Adjusts select delivery standards to improve efficiency and reliability
- Enhances customer experience via a new suite of consumer and small business tools
- Stabilizes workforce with a goal of cutting non-career employee turnover in half, and creating more opportunity for growth including more predictable progression into career workforce
- Aligns pricing to reflect market dynamics
- Asks for bipartisan legislation in Congress to repeal the retiree health benefit pre-funding mandate and to maximize future retiree participation in Medicare
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GrayHair would like to highlight a couple of items from the USPS plan
First, the USPS is proposing a change to First-Class to reduce reliance on air transportation and change service standards level to 95%.
The USPS proposes to modify existing service standards for First-Class Mail Letters and Flats from a current one-to-three-day service standard (for mail being delivered within the continental United States) to a one-to-five-day service standard. This will also require adjustments to the standards for end-to-end Periodicals (which travels with FirstClass Mail). The Postal Service® will seek public comment through a formal rulemaking process and will also request an advisory opinion from the Postal Regulatory Commission concerning this proposed change before it is implemented.
Next, the USPS is looking to convert Network Distribution Centers (NDCs) to Regional Distribution Centers (RDCs), and have these facilities only handle parcels. What that will mean is letter and flat mail will be directed to Sectional Center Facilities (SCFs)/Processing and Distribution Centers (PNDCs) or inducted at origin. This change is due to the USPS’s continued focus on parcel growth. As part of this change, some flats sorting equipment will be removed to make way for parcel sorters.
The USPS provided the following statement for the reduction of flats sorters:
Due to the dramatic decline of flat mail, we will replace flat sorting equipment as appropriate with much-needed package processing machines.
We will continue to adjust our letter-sorting infrastructure and invest in package sorting equipment in accordance with market needs while continuing to ensure that we will provide timely and consistent service for our customers across all of our product lines.
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