U.S. Postal Service Plans Slower Deliveries to Remote Destinations

The Federal Communications Commission is currently in court battling  business opponents of its net neutrality rules, which require internet service providers to ensure identical access and speed to all professional and private users, no matter what they pay. The U.S. Postal Service operates under a corresponding obligation to deliver letters and parcels to all customers with similar timeliness, no matter how far flung their location. That policy of equal treatment may vanish under a proposed cost-saving reform–and affect retail businesses shipping goods to rural customers.

A Postal Service announcement Thursday said the agency is planning handling and transit changes that would increase delivery times to post offices located more than 50 miles “away from the regional hubs.” According to the Washington Post, that would involve mail sent to farther-flung destinations sitting idle an additional day in stations before being processed and transported. Postmaster General Louis DeJoy said the proposed changes would save the money-losing service $3 billion in annual costs. But they would also create a two-tiered system in which rural and other less centrally located customers would get slower deliveries than everyone else, including reception of e-commerce purchases and supplies vital to many residents of small communities.

DeJoy feels there is no longer an alternative. The agency piled up losses of $87 billion between 2007 and 2020, and lost another $6.5 billion in 2023. It’s now on target to gush an additional $7 billion in red ink this year, despite a 10-year reorganization plan DeJoy introduced in 2021. As part of that reform, the price of first-class postage has already risen by 33 percent, while the previous goal of delivering mail anywhere in the nation within three days was extended to five. 

Critics say the new proposal to delay deliveries to remote locations amounts to additional erosion of service even as costs to users increase.

“Any effort to degrade service while raising prices is a recipe for a death spiral at the Postal Service,” Representative Gerry Connolly (D-Va.) said in a statement published by the Post. “This is the second time Postmaster General DeJoy has proposed lower service standards. He might as well announce a return to delivering mail by horse and buggy.”

But DeJoy doesn’t see it that way. He described the delays in processing and transporting mail to more distant post offices as relatively minimal–a day or less in most cases, he said. Meanwhile, he noted that additional time won’t alter the agency’s continuing objective to deliver all letters and parcels within five days, no matter the destination.

“At the end of the day, I think some portion of the mail showing up 12 hours later, I think it’s a price that had to be paid for letting this place be neglected,” DeJoy told the Post of what he says are long overdue measures to keep the agency afloat. “You look around every other country, (delivery) is longer, it’s much more expensive. We’re trying to save the Postal Service–not figuratively, not to advocate for something. We’re trying to literally save the Postal Service.”

Complicating that task is the agency being bound by a Universal Service Obligation to ensure all users benefit from a minimum level of operation at affordable prices no matter where they’re located–its version of net neutrality.

Private business rivals like FedEx, UPS, and Amazon don’t have that constraint, and therefore tend to offload deliveries of parcels to unprofitable remote locations to the U.S. Postal, while they develop lucrative routes. That means small town and rural customers are certain to receive merchanzie they order from retailers online later, which which may in tun reduce their satisfaction with e-commerce partners.

Critics in Congress–which in 2022 approved $107 billion to refortify the agency’s finances and put it back on a path to profitability–claim DeJoy’s successive reforms have only worsened services and raised prices to customers while failing to stop the losses. Indeed, replacing De Joy, a Trump appointee, was widely expected after Democrats won the 2020 elections. That may yety happen if they prevail in November–especially with his performance drawing sharp criticism.

For his part, DeJoy–the founder and CEO of what became the giant XPO logistics and freight company–views the sniping from elected officials as either ignorance or politics.

“They don’t understand the business,” he told the Post. “Nobody knows what it takes to compete with FedEx and UPS and drives billions of dollars of cost out of here that’s in the critique business. Even though it’s Congress, they don’t know.”

Still, mindful of the outcry over his 2020 reductions in services, which ignited fears that millions of mail-in ballots for elections that year would be stranded, DeJoy is not planning to begin slowing deliveries to farther-flung locales until next year. To do that as intended, however, he must obtain approval for his proposal from U.S. Postal’s nine-member governing board, undergo a review by the Postal Regulatory Commission–and see whether the outcome of November’s election affects his job.

Should things not go according to his plans, both retailers sending parcels and the remote customers receiving them may not have to wait the additional day for their transactions to be completed.