Major changes at Postal Service could slow mail delivery

The new head of the U.S. Postal Service established major operational changes Monday that could slow down mail delivery, warning employees the agency would not survive unless it made “difficult” changes to cut costs. But critics say such a philosophical change would sacrifice operational efficiency and cede its competitive edge to UPS, FedEx and other private-sector rivals.

Postmaster General Louis DeJoy told employees to leave mail behind at distribution centers if it delayed letter carriers from their routes, according to internal USPS documents obtained by the Washington Post and verified by the American Postal Workers Union and three people with knowledge of their contents, but who spoke anonymously to avoid retribution.

“If the plants run late, they will keep the mail for the next day,” according to a document titled, “New PMG’s [Postmaster General’s] expectations and plan.” Traditionally, postal workers are trained not to leave letters behind and to make multiple delivery trips to ensure timely distribution of letters and parcels.

The memo cited U.S. Steel, a onetime industry titan that was slow to adapt to market changes, to illustrate what is at stake. “In 1975 they were the largest company in the world,” the memo states. “They are gone.” (U.S. Steel is a $1.7 billion company with 27,500 employees.)

Analysts say the documents present a stark reimagining of the USPS that could chase away customers — especially if the White House gets the steep package rate increases it wants — and put the already beleaguered agency in deeper financial peril.

Congress authorized the USPS to borrow an additional $10 billion from the Treasury Department for emergency operations in an early coronavirus relief bill. But postal leaders have yet to access the money over disagreements with Treasury Secretary Steven Mnuchin, who attached terms on the loan that would turn over operations of much of the USPS to his department.

The Postal Service’s governing board appointed DeJoy, a major Trump donor and seasoned logistics executive, in the middle of that back-and-forth.

Steep drop-offs in first-class and marketing mail, the Postal Service’s most profitable items, have exacerbated the USPS’ cash crisis. Single-piece, firstclass mail volume fell 15 percent to 20 percent week to week in April and May, agency leaders told lawmakers last month. Marketing mail, the hardest-hit segment, tumbled 30 percent to 50 percent week to week during the same period.

Skyrocketing package volume, up 60 percent to 80 percent in May as the coronavirus pandemic pushed consumers toward e-commerce, has propped up the Postal Service’s finances and staved off immediate financial calamity. But the packages also have intensified the USPS’ competition with FedEx and UPS, industry leaders looking to capitalize on enduring changes in consumers habits brought on by shelter-in-place orders.

The Trump administration has consolidated control over the Postal Service, traditionally an apolitical institution, during the pandemic. President Donald Trump in April called the agency “a joke” and demanded it quadruple package rates before he’d authorize any emergency aid or loans.

The Postal Service’s future needs to be as a low-cost package carrier, industry analysts contend, as parcels make up a growing portion of the agency’s volume and profits, and paper mail volumes continue to decline as coupons and bills increasingly move online.