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Federal Eye
Posted at 09:50 AM ET, 08/23/2011

Slower mail could save Postal Service $1.5B


(Justin Sullivan - GETTY IMAGES)
Think snail mail is too slow? Imagine if it got slower.

The U.S. Postal Service could save about $1.5 billion annually if it relaxed its one- to three-day guarantees for First-Class and Priority Mail deliveries by a day, according to a new study.

Postal executives are seriously considering the idea and are expected to announce new plans regarding delivery schedules after Labor Day, according to USPS officials.

Currently the Postal Service guarantees that First-Class mail deliveries will arrive within one to three days, on average. Priority Mail shipments arrive within two to three days.

But relaxing the guarantee by a day would cut about $336 million in premium pay for employees working overnight and Sundays to meet current delivery schedules, according to the study. Adding one day to the schedule would put less emphasis on speed and allow USPS to save at least another $1.1 billion by delivering some long-haul Priority Mail shipments by ground instead of air, consolidating mail processing facilities and employing fewer workers, the study said.

The Postal Service’s inspector general commissioned the study, which was authored by the economic analysis firm Christensen Associates.

The study said USPS currently spends about $2.5 billion annually on mail processing, transportation and other delivery-related functions. It estimates however that first-class mail volume will drop to about 50 billion pieces annually in 2020, down substantially from the 78 billion pieces delivered last year. Volume for standard mail, a cheaper delivery option, is expected to remain flat at about 150 billion pieces annually.

The study’s authors acknowledge that with households and companies relying more on online payment systems and e-mail, the Postal Service still maintains a reputation for reliable service, no matter the speed.

“Some of the Postal Service’s largest business mailers have stated that they value consistency over speed and they would tolerate slightly slower service to save costs,” the report said.

But many readers who have contacted The Federal Eye through the years complain that the Postal Service is already taking too long to deliver important letters and packages. Others say that packages and other mailings are too often lost or damaged upon arrival. (Case in point: A birthday Priority Mail package sent in July to The Eye’s mother took eight days to ship from Washington to upstate New York — at least three days longer than normal. A postcard sent to The Eye and Mrs. Eye from Montreal took more than two weeks to arrive.)

There are no current plans to relax delivery USPS schedules, but top executives are slated to unveil changes to the agency’s delivery network after Labor Day, a spokeswoman said Monday.

Would you still use the post office if it took a little longer for your mail and packages to be delivered? Is slower, reliable service still worth it if USPS save money? Share your thoughts in the comments section below.

Read more Federal Eye coverage of the Postal Service

Follow Ed O’Keefe on Twitter: @edatpost

By  |  09:50 AM ET, 08/23/2011

Categories:  Postal Service

 
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