The U.S. Postal Service is set to implement major cost-cutting measures starting in 2025, including reduced delivery days and branch closures, but faces pushback from lawmakers concerned about service impacts.
At a Glance
- USPS plans to cut costs by $3 billion annually starting in 2025
- Measures include reducing delivery days and closing underperforming branches
- Postmaster General Louis DeJoy paused consolidation plans until 2025 due to lawmaker concerns
- USPS aims to reduce greenhouse gas emissions by 40% by 2030
- New policies like Local Transportation Optimization (LTO) are already affecting rural communities
USPS Pauses Consolidation Plans Amid Concerns
The United States Postal Service has announced a pause in its mail processing consolidation plans until at least January 1, 2025. This decision comes in response to concerns raised by lawmakers about potential impacts on delivery reliability. Postmaster General Louis DeJoy conveyed this information in a letter to Senator Gary Peters, acknowledging the need to address these concerns before proceeding with the planned changes.
The consolidation effort is part of the USPS’s 10-year “Delivering for America” plan, aimed at improving the agency’s financial health. With estimated annual savings ranging from $133 million to $177 million, the plan involves potential changes to nearly 60 out of 427 processing plants. However, the pause indicates a willingness to reassess and potentially modify these plans to ensure service quality is maintained.
Environmental Goals and Cost-Cutting Measures
While cost-cutting remains a priority, the USPS is also setting ambitious environmental goals. The agency aims to reduce its greenhouse gas emissions by 40% by 2030, alongside plans to cut indirect emissions from its business by 20% over the same period. These efforts are supported by a $3 billion Congressional allocation for electrification initiatives, leading to plans for 62% of new vehicles to be battery-powered.
“We haven’t been doing that,” DeJoy said of his cost coverage mandate. “And in the process of trying to do that, to the extent that we can align all of these initiatives with the reduction of carbon burning is important. It’s an important aspect for us to take on and alignment happens because of cost reduction initiatives.”
The USPS’s environmental initiatives extend beyond vehicle electrification. The agency plans to divert 75% of its waste from landfills and ensure 74% of its packaging is from recycled content by 2030. Additionally, USPS has started installing EV charging stations, with contracts for 14,000 chargers already in place.
Impact on Rural Communities
While the USPS aims for efficiency and environmental responsibility, some of its cost-cutting measures are already affecting rural communities. In Oregon, a new policy called Local Transportation Optimization (LTO) was introduced in February, impacting 170 post offices. This policy reduces daily mail trucks from two to one, potentially delaying mail delivery by a day.
“While USPS claims these changes overall will improve service while reducing costs, there is evidence to the contrary in locations where USPS has implemented changes so far,” according to the letter. “USPS must stop implementation, restore service in those areas where changes were implemented, and fully understand the nationwide effects of its plan on service and communities.”
The LTO policy aims to reduce carbon emissions and save the USPS $1 billion annually. However, concerns have been raised about its impact on mail-in ballots and overall mail delivery times. The USPS has not publicly disclosed which post offices are affected by LTO, adding to the uncertainty faced by rural communities.
Progress and Future Outlook
Despite the challenges and concerns, the USPS reports progress in its transformation efforts. Several regional processing and distribution centers have been activated recently, and improvements have been made to more than 20 local processing centers. The agency has also launched 25 sorting and delivery centers as part of its modernization efforts.
“The Delivering for America plan has changed this organization in so many positive ways,” DeJoy said. “It represents the Postal Service’s commitment as an independent agency to evolve our services to enable us to cover our costs by selling our products and services. This is what we must continue to do to survive — we must evolve — and that means change.”
The USPS has reduced its projected 10-year losses from nearly $160 billion to $65 billion and is developing strategies to reduce these losses further. As the only carrier obligated to provide universal service at affordable prices to all Americans, regardless of location, the USPS faces unique challenges in balancing cost-cutting measures with its mandate to serve all communities effectively.
