backtop


Print 52 comment(s) - last by jRaskell.. on Dec 7 at 5:20 PM


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



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: Need to make cuts.
By christojojo on 12/6/2011 10:19:13 PM , Rating: 3
quote:
quote: The only thing that keeps UPS and Fed Ex prices anything close to reasonable is the fact that you have USPS to compete with them. If USPS disappears, see what it costs you to ship something. It will pretty much cost you the same price as now for packages. Maybe even better than the USPS since the USPS is currently running as a monopoly (budget level shipping). UPS, FedEx and DHL are all competing against each other for most of their business. The USPS has a stranglehold on plain old letters.


Seriously the USPS has a disadvantage. They are regulated by politics, that quasi independent stuff is primarily smoke and mirrors with many hands in the coffers and less able to be scrutinized by the public with a few rare other exceptions. (I worked as a mailman (yes I delivered mail and I am a man (for those sexists out there)) for 12 years and hated it.

The postal service MUST deliver to ALL destination. Private businesses like Fedex and UPS do not. I know for a fact that UPS and Fedex used to drop off delivery to the USPS for destinations they did not want to deliver for cost effective reasons. Which is fine. The problem with saying the world would be better without the government in this service is a bit myopic. In some cases it would make sense but others we are cutting of some of our society. I don't think the world will be hurt by a 5 day delivery cycle, but I think that the USA needs to keep all its citizens in touch no matter the distance.


"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki