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Source: USPS

USPS Performance Update on New Mail Service Delivery Standards – First Look

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On October 1, USPS introduced its controversial policy to adjust the service standards for several mail services as part of the Postal Service 10-year Delivering For America plan to achieve financial sustainability and service excellence.

The effect of the change in service standards is that some lower-class mail services, including First Class Mail, will take longer to arrive.

Although the Postal Service said that 70 percent of First Class Mail (FCM) should arrive within three days — and most local FCM deliveries would not experience a difference in delivery speed (1 to 2 days) — the plan was still criticized by the Postal Regulatory Commission (PRC), which has regulatory oversight over USPS.

The PRC highlighted several deficiencies in the plan:

  • Unknown clarity on when the Postal Service planned to realize the full impact of the changes to service standards.
  • The Postal Service did not include a firm estimate for when it would meet its service performance targets, nor did it include any interim service performance targets.
  • Cost-saving estimates by the Postal Service of the proposed changes may be inflated, and the proposed changes would not substantially affect the Postal Service’s overall financial condition.
  • Flaws in the Postal Service’s transportation model could diminish its reliability with surface network impact projections and estimated cost changes potentially inaccurate and unachievable.
  • The Postal Service did not demonstrate that it would be operationally capable of running the complex surface network modeled to support service standard changes.

On the surface, extending service standards by several days should give USPS more time to deliver mail “on time.” However, since part of the plan shifts some of the long-distance transportation from air to ground, USPS also loses an in-transit time buffer when things go wrong.

In other words, if trucks are slowed down or get stuck due to weather or other events that can cause delays in the network, it would likely take longer to get them moving again versus putting the mail on planes.

Another criticism the PRC had was that USPS implementing the new service standards right before the busy holiday peak season and during the Covid-19 pandemic would be challenging.

In a somewhat bizarre turn-about after the changes were supposedly already in effect, the Postal Service announced it would delay the implementation of First Class Mail Package Service until after the new year.

This backtrack is only applicable to First Class Mail parcels, not regular First Class Mail letters.

Also, users of eBay’s standard envelope service are not excluded as it’s based on USPS FCM, and subject to the new service standards.

But in an apparent bid to make a point that the new standards are working, the Postal Service already released the first update on the new delivery performance of affected services.

USPS First Performance Update on New Delivery Standards

  • First-Class Mail: 91.2 percent of First-Class Mail delivered on time against the USPS service standard, an improvement of 3.2 percentage points from the fourth quarter.
  • Marketing Mail: 92.2 percent of Marketing Mail delivered on time against the USPS service standard, a slight decrease of .3 percentage points from the fourth quarter.
  • Periodicals: 84.3 percent of Periodicals delivered on time against the USPS service standard, an improvement of 2.2 percentage points from the fourth quarter.

USPS did not specify how much mail had shifted to ground transportation yet. Therefore, some of the gains may be due to the Postal Service still relying on air transport, especially as the US is still in the middle of a big truck driver shortage.

Hopefully, the Postal Service will become a little more transparent about how their logistics network today is different from a few months ago so that a better comparison can be made.

On an additional note, USPS said that it now has installed 84 of 112 planned high-speed package processing machines this year as it continues to beef up its resources for the holiday season.

We will provide further updates on the performance of the new service standards as they become available.

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