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Postmaster General Patrick Donahoe  (Source: federaltimes.com)
The U.S. Postal Service plans to slow first-class mail delivery and close 250 mail processing centers come March

The U.S. Postal Service has announced that it will make about $3 billion in reductions next spring in order to climb out of the red, which is expected to affect first-class mail delivery and those who use it such as Netflix and Gamefly.

After five years of being in the red, the U.S. Postal Service is taking action to reduce costs while waiting for Congress to allow it to raise stamp prices, reduce health care/labor costs, and reduce delivery to five days per week.

Despite having to wait on Congress for such larger aspects of authority regarding cost reduction, the U.S. Postal Service is an independent agency of government that does not receive tax money, thus enabling it to make smaller-scale decisions of its own.

The U.S. Postal Service has decided to make its cuts in first-class mail delivery, which will slow delivery and eliminate next-day USPS delivery.

First-class mail is currently delivered to homes and businesses within one to three days in the continental U.S. Forty-two percent of first-class mail arrives the following day while 27 percent arrives in two days and 31 percent arrives in three days. Less than 1 percent arrives in four to five days. With the cuts in progress taking place, 51 percent of first-class mail would arrive in two days while much of the remainder would arrive in three days.

In addition to slowed mail delivery, 250 mail processing centers and 3,700 local post offices will close if the cuts are finalized, which would eliminate about 100,000 postal employees. This would save the U.S. Postal Service $6.5 billion annually.

These changes are currently awaiting advisory opinion from the independent Postal Regulatory Commission in March 2012, but Postmaster General Patrick Donahoe has said that the cuts are urgent and will be put into action come March after the opinion is released.

The U.S. Postal Service is expected to have a loss of $14.1 billion next year. According to Donahoe, it must make $20 billion in cuts by 2015 in order to climb back into the black.

The U.S. Postal Service has already made a few announcements in regards to changes, such as a 1-cent increase in first-class mail to 45 cents starting January 22. It also announced in September the possibility of closing the processing centers, and it received 4,400 public comments where many opposed the idea. State legislators and small-town mayors were on the list of opposition, while companies like AT&T strongly urged the U.S. Postal Service to educate the public about any changes so that there is no confusion or delinquent payments when it sends its monthly billing statements. DVD-by-mail companies like Netflix and Gamefly will also be affected, since these services depend on timely DVD delivery. Customers will likely cancel such services if they feel they are not getting their money's worth.

"DVD by mail may not last forever, but we want it to last as long as possible," said Netflix CEO Reed Hastings.

Many who oppose the U.S. Postal Service's approach say that these cuts will likely make its situation worse by pushing customers to internet services instead such as online bill payment.

Source: Yahoo News



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Don't care
By Motoman on 12/5/2011 1:35:35 PM , Rating: 2
..."DVD by mail may not last forever..."

Yes it will. People can survive getting a DVD in 2 days instead of one. Especially for those people who have no access at all to broadband internet. Which I'm guessing is around 20-25% of the population of the US.

At any rate, the USPS *needs* to radically downsize and cut costs. The current status of that organization is that it is wildly disproportionately-sized compared to it's workload. Massive facility closures and layoffs are needed...as are cutbacks in service (like, no Saturday delivery) and rises in cost (what, you're not going to mail your grandma a birthday card because it costs $.50 instead of $.45?).

Times have changed. USPS needs to change to match.




RE: Don't care
By kingmotley on 12/5/2011 1:47:14 PM , Rating: 2
Makes absolutely no difference to be at all regarding Netflix. What would kill netflix for me would be that my mailman no longer picks up the movies from my mailbox. That would kill my subscription pretty quick. An extra day or two won't affect me enough for me to even notice. If it does, I'll just increase my sub by 1 more disc out at a time to cover the extra 1 day.


RE: Don't care
By nafhan on 12/5/2011 2:25:34 PM , Rating: 2
I don't think they were referring to these changes when they made that statement. I am pretty sure that DVD by mail WILL go away at some point. Netflix was just reassuring current customers that this postal service change won't be what causes it to go away, and that there are no immediate plans to do away with DVD's by mail.


RE: Don't care
By danjw1 on 12/5/2011 3:32:05 PM , Rating: 2
The problem is Congress won't let them. Congress doesn't want them to cut down on delivery/pickup days, they don't want them to shutdown any post offices either. So the Post Office is up a creak with no paddle. We will see if Congress decides to allow them to slow down delivery service, but I am doubting it.


RE: Don't care
By Motoman on 12/5/2011 11:32:02 PM , Rating: 1
That's like saying Congress won't let the sun rise in the east tomorrow. They can "not let" stuff happen all they want to - bankrupt is bankrupt.


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