Lack of cash means slower mail delivery

The U.S. Postal Service moved to change first-class mail delivery standards for the first time in decades, seeking to end next-day delivery for letters, a grim reminder of the need to save the nation's mail service, one lawmaker said.

Facing up to $14 billion in losses in fiscal 2012, the Postal Service also moved forward with plans to close about half of its 461 mail processing facilities resulting in the loss of 28,000 jobs.

“Our network is simply too big to handle the revenues that are coming in and, more importantly, way too big for what we’re projecting in the future,” David E. Williams, vice president for network operations at the Postal Service, said Monday.

“We have to do this,” he said. “We have to make this change in order for the Postal Service to become financially viable.”

The shuttering of the processing sites is in addition to the anticipated closure of many post offices.

Mr. Williams and U.S. Postmaster General Patrick Donahoe briefed reporters on the plans while officials filed additional details with the Postal Regulatory Commission.

Mr. Williams said the Postal Service needs to slash its operating costs by $20 billion by 2015 as forecasts predict continuing steep declines in revenue from first-class mail.

“The challenge now isn’t a challenge of growth,” Mr. Williams said. “It’s a challenge of staying ahead of the cost curve. We’ve got to pull out significant excess capacity out of our network.”

In 2006, the Postal Service handled 98 billion pieces of first-class mail; in 2010, it dropped to 78 billion. What’s more, projections call for volume to drop to 53 billion pieces in 2016 and 39 billion in 2020.

“The American public pays bills online, more than 50 percent today,” Mr. Donahoe said. “We can’t sit back and wait for another five or six or 10 years before we make these changes.”

The service standards in place now call for deliver of first-class mail in one to three days; under the new standard, it would be two to three days. The current standards have been in place for “many, many decades,” Mr. Williams said.

But the plans are likely to encounter at least some opposition on Capitol Hill.

Within hours of the announcement by the Postal Service, Sen. Thomas R. Carper, Delaware Democrat and chairman of the subcommittee that oversees the Postal Service, warned that the changes could make problems even worse.

“This situation is less than ideal,” he said. “The few measures that the Postal Service can adopt on its own — such as closing distribution centers and slowing down first-class mail delivery times — to extend its survival and avoid insolvency will also potentially further erode its declining business.”

Fredric Rolando, president of the National Association of Letter Carriers, said diminished quality of service would exacerbate financial problems.

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