Postal Service Cuts Means Next-Day Mail May Be a Thing of the Past
Proposed cuts to services from the US Postal Service will save the cash-strapped organization some much-needed funds, but the public may not like the outcome.
Since roughly half of the nearly 500 mail processing centers across the country would be closed, delivery times for mail would be lengthened. Currently, first-class mail within the US typically arrives in one to three days, but that would change -- two days would become the new minimum, impacting everything from Netflix's DVDs-by-mail to newspapers and time-sensitive magazines delivered by postal carrier to far-flung suburban and rural communities.
"It's a potentially major change, but I don't think consumers are focused on it and it won't register until the service goes away," said Jim Corridore, analyst with S&P Capital IQ, who tracks the shipping industry. "Over time, to the extent the customer service experience gets worse, it will only increase the shift away from mail to alternatives. There's almost nothing you can't do online that you can do by mail."
The postal service is an independent agency of government that does not receive tax money but is subject to congressional control on large aspects of its operations.
Postmaster General Patrick Donahoe says the agency must make cuts of $20 billion by 2015 to be profitable, adding in an interview, "We have a business model that is failing. You can't continue to run red ink and not make changes. We know our business, and we listen to our customers. Customers are looking for affordable and consistent mail service, and they do not want us to take tax money."