Postal officials have said that, without help, the USPS will default on several payments to the federal government and will be $10 billion in the red as of September 2011. They have already stopped contributing to the Federal Employee Retirement System account and are now targeting 120,000 jobs for layoffs by 2015. The Postal Service also wants to increase postage rates, reduce delivery days, increase delivery time and adjust its network infrastructure to respond to declining mail volumes.
What does this mean to those of us who send mail?
First off, we don’t know how many of the USPS proposals will come to fruition or the timing of their implementation. However, with the recent support by President Obama for a phase out of Saturday mail delivery in 2013, staggered early retirement of postal employees and partial forgiveness and alteration to the USPS funding of its retirement plan, it is a safe bet that significant change is coming.
Now the USPS wants to lengthen mail delivery time for First Class Mail from 1-3 days to 2-3 days. Coupled with a drastic size reduction of its distribution network, this could have a huge impact.
If First Class Mail doesn’t move overnight, the delivery time of other classes of mail will also lengthen as they often share transportation. With fewer trucks to transport mail, fewer machines to sort mail and fewer employees in general, it is reasonable to believe that delivery time for Standard Class mail and periodicals will increase by 10-20%.
Our take: Plan on slower mail delivery by the Postal Service in 2012. Standard Mail delivery time could lengthen by as much as three days; First Class delivery by a day.
USPS files for Postage Increase Effective January, 22 2012: As expected the United States Postal Service filed to raise Postage Rates effective January 22, 2012 The price of a first class stamp will increase from $.44 to $.45.
Standard mail letter pricing will increase on average 1.9% increasing rates from $00369 - $.00519. First Class letter pricing will increase on average 2.133% increasing rates $.00725 - $.01.
Elimination of Saturday Mail Delivery: This USPS agenda item has been gaining steam. Despite new support, it would require an act of Congress to happen. The potential of Congress to pass a bill allowing the USPS to eliminate Saturday delivery is becoming more likely, but, if this happens, implementation probably would not happen until 2013.
Distribution Network Consolidation: This USPS proposal will study mail volume at all USPS Mail Processing Facilities and, if implemented, could decrease the number of facilities by more than 300.The volume studies will take two or three months to complete. Implementation of this proposal will begin shortly thereafter. Once implemented, this plan may result in slower mail delivery.