USPS sets slower delivery standard for small packages starting May 1st

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The postal service is moving forward with plans to introduce a slower delivery standard for almost a third of small, light packages.

USPS announced Monday that it will implement its new service standard for its first-class package service starting May 1.

The agency expects the new service standard to impact 32% of premium parcel service volume. The new standard allows USPS to add an extra day or two to deliver these packages and still consider them on time.

Parcels shipped via first class carrier weigh less than a pound. Businesses rely on world-class parcel service for items containing small electronics and prescription drugs.

USPS introduced slower delivery standards for nearly 40% of first-class mail last fall.

The agency said the service standards are “delivery benchmarks” for how long customers can expect USPS to deliver various types of mail and packages from their point of origin to their destination.

Service standards, USPS added, are not the same as percentage targets or actual service performance measured.

The agency had initially considered implementing the new first-class parcel service standard by October 1, but postponed the start date.

The service standards are just one element of the agency’s 10-year reform plan released last year. Postmaster General Louis DeJoy said in a recent interview that USPS, more than a year on schedule, is on track to have an “exponentially improved year” compared to 15 straight years of net losses.

USPS implements these standards despite some concerns from its regulator.

The Postal Regulatory Commission warned in an advisory opinion last September that new service standards for the postal service’s first-class parcel service would have “no material impact on the overall financial position of the postal service”.

Those conclusions echo the commission’s non-binding advisory opinion in July, when it found plans to slow down first-class mail would not result in a “substantial improvement” in its long-term financial woes.

The commission found that USPS did not conduct a detailed analysis of how the standards of service would affect customers, such as those who rely on first-class package service to obtain prescription drugs.

However, USPS estimates that nearly all prescription drugs currently subject to two-day delivery and the majority of prescriptions that take three days to deliver would remain unchanged under the new standards.

The new standard will allow the agency to shift more of its volume to its own ground transportation delivery network, rather than relying on contracted air transportation. The agency said air travel was becoming too expensive and not providing a reliable service.

“Changing these service standards will allow for additional transit time for long-distance parcel deliveries and increased network efficiencies,” the agency wrote.

USPS estimates the new standard would save the agency $42 million per year and allow for more reliable and consistent package delivery. The agency believes the changes won’t significantly impact package volume and may actually result in modest growth.

Slower service standards for first-class packages are likely to improve on-time metrics, but the PRC said USPS has not provided a firm estimate of when it will meet its goal of 95% on-time delivery, and has not set more realistic delivery targets in the meantime.

While the new service standard would result in slower delivery for small packages that travel the furthest, USPS expects about 4% of its first-class package volume that travels relatively short distances to arrive a day faster under these new standards.

DeJoy said in a statement the service standard is a “key growth element and enabler of our 10-year plan.”

“This action will contribute to our cost savings efforts and improve our reliability across all product classes, including our growing packaging market,” said DeJoy.

“By executing the elements of our 10-year plan, we will provide the consistent, reliable service that the American people and our customers expect and deserve, and increase package volumes, thereby driving revenue growth that will be reinvested in the postal service can.”

USPS also removes an additional tag for priority mail that is transported over the ground. The extra day was temporarily introduced in April 2020 to reflect the ongoing challenges related to the global supply chain, transportation and availability of staff across our network caused by the COVID-19 pandemic.

However, given continued high demand on the air network, the Postal Service is still granting an extra day for priority mail transported via air transport “until the reliability of our key providers improves,” the agency wrote.

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