WASHINGTON – The US Postal Service (USPS) on Tuesday outlined a proposed strategic plan for ten years that will slow down current first-class delivery standards and raise prices to hamper $ 160 billion in predicted red ink over the next decade.
The plan will review existing standards from one to three days for first-class postal letters to one to five days. USPS said 61% of the current first class mail volume will remain at the current standard.
This will shift more deliveries to trucks rather than airplanes, consolidating mail processing and reducing hours at some retail locations. The plan assumes $ 44 billion in extra revenue from price increases, but officials declined to give further details.
USPS Postmaster General Louis DeJoy, a supporter of former President Donald Trump, who was named head of USPS last year, said the postal service needed a “lifeline for the government” without change – something he does not want do not search.
DeJoy admits USPS performed poorly during the holiday season as it was flooded with parcel deliveries, even though first-class mail volume shrank.
USPS needs significant financial relief from Congress and the Biden administration due to pre-financing commitments and other changes that could address $ 58 billion in expected losses.
U.S. House Spokeswoman Nancy Pelosi criticized DeJoy’s plan, but said Congress would ensure in an upcoming infrastructure bill that “the postal service has the necessary resources to serve the American people.”
USPS reported a net loss of $ 86.7 billion from 2007 to 2020. One reason for the red ink is that in 2006 Congress passed legislation requiring USPS to pre-fund more than $ 120 billion in health care and retirement pension obligations.
Representative Carolyn Maloney, who chairs the committee overseeing USPS, has circulated draft legislation to address financial problems at USPS.
DeJoy says current standards are “not achievable.” For the last budget year, average first-class postal service performance was 89.7%, well below target.
The plan invests $ 4 billion to renovate retail stores, consolidates some post offices in the city and seeks to transport more first-class mail by truck rather than by air. USPS does not own its own aircraft.
USPS also said it could commit to an electric supply fleet by 2035 with the help of Congress – promising to spend $ 11 billion on vehicles over the next decade. Earlier this month, USPS said it could carry out its fleet to the “maximum extent” operationally achievable if it received $ 8 billion in government aid.
In February, USPS selected Oshkosh Defense for a $ 1 billion contract to build up to 165,000 delivery vehicles, which turned down an electric bid from Workhorse Group.