USPS to Make First-Class Delivery Cuts in Spring; Could Affect Netflix, Gamefly
December 5, 2011 1:25 PM
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Postmaster General Patrick Donahoe
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
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.
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.
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RE: Need to make cuts.
12/5/2011 8:10:30 PM
What cushy benefits are you referring to? Do you have any figures to back that statement up?
Our local Post Office employs 2 full-time counterpeople, 6 part-time deliverers, and about as many part-time sorters. One of our counter people a Navy vet from the Korean War, and a bit slow (the reason he got the job), and judging by the way he lives (house, car, clothes) I have a hard time believing he makes more than 12 dollars an hour. I also know for a fact that sorters make 8-10 dollars an hour. Full-time employees contribute half the amount their medical benefits cost, as well as being matched 1:1 in retirement contributions. Part-timers.. get no benefits whatsoever.
In contrast, at the UPS plant about 5 miles away.. I knew a part-time sorter there that claimed to get 18 dollars an hour and full medical. From what I've heard of FedEx, it's about the same. Is that you are referring to as the industry standards?
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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