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Postal Service to Drop Next-day Delivery Promise
December 5, 2011

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You've got slow mail.

That's the potential for many people in the coming years as a result of a wide-ranging series of cost-cutting by the U.S. Postal Service in the wake of a large budget deficit.

The USPS, on the verge of bankruptcy because of a variety of factors, announced a $3 billion of cuts, including the planned closing of half the country's 500 mail processing centers as early as March 2012. The plan is to consolidate, so the job loss wouldn't be as steep as first appears, but the Postal Service is also planning to close nearly 3,700 local post office, which would result in a large number of jobs lost.

The result would be that the standard time for mail delivery would no longer have a minimum of one day; instead, the expected delivery time would be two to three days: no more sending a birthday card the day before and expecting it to get there overnight. Currently, bout 42 percent of first-class mail now arrives at its destination the next day, with 27 percent getting there in two days and 31 percent arriving three days after being sent. The Postal Service estimates that, after the switch next year, 51 percent of first-class mail would arrive in two days and the rest in three days.

Such delivery times would change the way many businesses use the postal service. Netflix, for instance, touts its next-day delivery as a key part of its service. Many prescription drugs are sent through the mail, and patients are certainly accustomed to next-day delivery.

Companies that send large numbers of news publications through the mail could see their subscription numbers drop, as customers lose interest in news that is more than one or two days old — or get that news elsewhere. More and more people are getting news and other information in other ways, most notably online. The ease of use of email has made a large dent in the number of items send first class mail in recent years, and many people fear that this latest round of Postal Service cuts will only accelerate that trend.

Still, the Postal Service is, first and foremost, a business, one that depends on Congressional funding but might have to do without it, since bills containing funds to forestall the painful cuts are stalled in Congress that is taking a hard look at businesses like the Postal Service, which has lost money for five years in a row.

A planned 1-cent increase in the price of a first-class stamp, to 45 cents, is to take effect on January 22, 2012, but the added revenues from that price increase are expected to be nowhere near what is needed to cope with an expected $14.1 billion loss, much of it because of increasing costs of employee and retiree benefits.



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