Postmaster General Louis DeJoy unveiled the largest rollback of consumer mail services in a generation, part of a 10-year plan that will include longer first-class delivery windows, reduced post office hours and higher postage prices.
DeJoy presented his long-awaited strategic vision for the U.S. Postal Service during a Tuesday webinar. Portions of the initiative already made public have raised alarms from postal advocates, who say they could further diminish agency performance. Mailing industry officials have said that substantial service cuts could drive away business and worsen its already battered finances.
But DeJoy has cited the need for austerity to ensure more consistent delivery and rein in losses. The agency is weighed down by $188.4 billion in liabilities, and DeJoy told a House panel last month that he expects the Postal Service to lose $160 billion over the next 10 years.
The plan, which he told the panel was eight months in the making, is meant to reset expectations for the Postal Service and its place in the express-shipping market. It is couched in the view that the historically high package volumes of the pandemic era will persist, and reorients the agency around consumers who don't rely on the mail service for letters, advertisements or business transactions as much as they once did.
"Does it make a difference if it's an extra day to get a letter?" DeJoy told the House Oversight and Reform Committee in February. "Because something has to change. We cannot keep doing the same thing we're doing."
Sen. Gary Peters, a Michigan Democrat who has been critical of DeJoy, cautioned that any reduction of delivery standards would have a big impact on customers.
"While I understand Postal Service leadership's desire to set long-term goals, I am concerned that several of the initiatives in this plan will harm service for folks across the country who rely on the Postal Service for prescription drugs, financial documents, running their small businesses, and more," Peters said.
DeJoy rolled out his plan as Democrats have renewed calls for his ouster and the removal of the agency's governing board, which backs him and the proposals. More than 50 House Democrats last week asked President Joe Biden to fire the board's six sitting members for cause -- citing "gross mismanagement," "self-inflicted" nationwide mail delays and "rampant conflicts of interest" -- and to allow a new slate of Biden nominees to consider DeJoy's fitness for office.
Biden already has nominated two Democrats and a voting-rights advocate to fill three of four vacancies (board chairman Ron Bloom, a Democrat, is serving in a one-year holdover term) on the board of governors. If confirmed by the Senate, Democrats and Biden appointees would hold a 5-to-4 majority with the votes to remove DeJoy, if desired.
Biden cannot fire DeJoy. Postal operations are purposefully insulated from the presidency and Congress to prevent politicians from tinkering with the mail system for political gain. The postmaster general answers only to the board of governors. Bloom told the House panel in February that the board "believes the postmaster general in very difficult circumstances is doing a good job."
Most of DeJoy's changes will not face regulatory roadblocks. The postmaster general unilaterally controls operating hours at post offices, and the board of governors appears to back DeJoy's changes to delivery times.
The Postal Service must consult the Postal Regulatory Commission on price increases, but the regulator issues only a nonbinding advisory opinion. A group of mailers is suing the commission to block the new pricing schedule, but DeJoy has signaled he plans to forge ahead with new prices regardless.
Current standards call for delivering first-class mail in one to three days. Under revised standards, delivery time would stretch to as much as five days, according to the Postal Service plan. It also said it would "align hours of operation" at low-traffic post offices.
First-class mail traveling within a local area will continue to be delivered in one or two days, and 70% of first-class mail will still arrive in three days or less, the Postal Service said in a news release.
The agency has missed those metrics for years but has struggled mightily during DeJoy's tenure.
Over the holiday season, postal performance reached its worst levels in generations: 71% on-time delivery for two-day mail and 38% for three-day mail during the last week of December. Rep. Raja Krishnamoorthi, D-Ill., compared those scores to unfavorable odds in a Las Vegas casino.
"Sending a letter should not be a game of chance," he said during last month's hearing.
The Postal Service's delivery scores have rebounded in recent weeks, to nearly 83.7% for first-class mail the week of March 12. The agency attributed the improvement to more capacity in the air transportation network and the end of winter storms that delayed operations in much of the country.
The metrics remain well short of the agency's marks from before DeJoy's arrival last June. The week before DeJoy implemented his midsummer changes, the Postal Service delivered 90.6% of first-class mail on time. It hasn't reached 90% in the eight months since.
OFFICE HOURS, POSTAGE
DeJoy also will cut retail post office hours, a return to one of the changes he first implemented. The Postal Service's Office of Inspector General found that the agency expanded lunch breaks in certain post offices beginning July 22 and often sought to match consumer demand with operating hours by closing post offices early. DeJoy suspended the policy after a public uproar and after members of Congress accused him of shuttering postal facilities in the run-up to the election.
DeJoy also has discussed an "imminent" postage rate increase with industry officials tied to a new ruling from the Postal Regulatory Commission that created a new pricing system. Industry officials said that increase could come as soon as this summer and be as large as 9%, a cost many say will be passed on to customers.
But the rate increase, along with changes proposed in a postal reform bill from Rep. Carolyn Maloney, D-N.Y., could create budgetary breathing room for the Postal Service for the first time in years. DeJoy backs the legislation, which includes eliminating the agency's burdensome retiree health-care pre-funding mandate and enrolling postal workers in Medicare.
Its key provisions would immediately save the Postal Service $35 billion in liabilities -- money the agency has not paid into the health care accounts since 2011. Integrating retired postal employees into Medicare would save the Postal Service another $10 billion over 10 years.
Information for this article was contributed by Anthony Izaguirre of The Associated Press and by Todd Shields of Bloomberg News (TNS).