WASHINGTON – The US Postal Service (USPS) outlined on Tuesday a proposed 10-year strategic plan that would reduce current standards for first-class delivery and raise some prices to reach $ 160 billion in red ink scheduled for the next decade.
The plan would revise existing one to three-day service standards for first-class letters for one to five days. The USPS said 61% of the current volume of first class mail would remain at the current standard.
This would shift more deliveries to trucks instead of airplanes, consolidate mail processing and reduce hours at some retail locations. The plan assumes an additional $ 44 billion in revenue from price increases, but officials have declined to offer further details.
USPS Postmaster General Louis DeJoy, an advocate for former President Donald Trump who was appointed last year to head the USPS, said that without change the Postal Service would need a “government bailout” – something it does not want to pursue.
DeJoy acknowledges that the USPS performed poorly during the holiday season, as it was inundated by package deliveries, even as the volume of first-class mail was reduced.
The USPS needs significant financial relief from Congress and the Biden administration for pre-financing obligations and other changes that could address $ 58 billion in anticipated losses.
US House Speaker Nancy Pelosi criticized DeJoy’s plan, but said that Congress will ensure in an upcoming infrastructure bill that “the postal service has the necessary resources to serve the American people.”
The USPS reported net losses totaling $ 86.7 billion from 2007 to 2020. One reason for the red ink is that Congress in 2006 passed legislation requiring the USPS to pre-fund more than $ 120 billion in health plans and pensions for retirees .
Representative Carolyn Maloney, who chairs the committee that oversees the USPS, distributed a bill to address USPS financial issues.
DeJoy says the current standards “are not achievable”. In the last budget year, the average performance of the first class courier service was 89.7%, significantly below the target.
The plan invests US $ 4 billion to renovate points of sale, consolidates some post offices in the city and seeks to transport more first-class mail by trucks than by air. The USPS does not have its own planes.
The USPS also said it could commit to a fully electric delivery fleet by 2035 with the assistance of Congress – and promises to spend $ 11 billion on vehicles over the next decade. Earlier this month, the USPS said it could electrify its fleet to the “maximum extent” operationally viable if it received $ 8 billion in government assistance.
In February, the USPS chose Oshkosh Defense for a multi-billion dollar contract to make up to 165,000 delivery vehicles, rejecting an all-electric offer from the Workhorse Group.