Have you been experiencing long lines at your local post office or dealing with frustrating delivery delays? These problems are largely the result of the U.S. Postal Service (USPS) sinking under the weight of major financial issues that have been growing over the past few years and were only exacerbated by the COVID pandemic. The crisis is so dire that the agency released a 10-year plan called Delivering for America (DFA) in March 2021 to try to get itself back on track, and in April of this year, President Joe Biden signed the Postal Service Reform Act to provide nearly $50 billion in relief to the USPS over the next decade. Still, that might not be enough, as Postmaster General Louis DeJoy just revealed that the agency needs to make even "more aggressive" changes to its services soon. Read on to find out what the USPS is gearing up to do.
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The USPS has already made a number of changes to your mail this year.
iStockThe Postal Service's financial struggles have resulted in the agency making several changes already this year. Back in April, the USPS introduced two new shipping surcharges for nonstandard packages. That was followed by another price hike soon after, when the agency raised First-Class Mail prices by 6.5 percent on July 10.
The Postal Service also slowed the delivery timeframe for almost one-third of its small, lightweight packages by introducing new service standards for its First-Class Packages in May—after the agency had already slowed down shipping speeds in Oct. 2021.
But if you think the agency's adjustments ended there, think again.
The Postal Service says it will be "more aggressive" with this.
iStockIf you already feel like you're paying too much for services from the USPS because of earlier price hikes, you won't want to hear this. During a public meeting with the USPS Board of Governors on Aug. 9, the Postmaster General said that he believes the agency needs to make "more aggressive" changes to its pricing structure in the future.
"Because of this, my recommendation to the governors will be to remain on course to raise prices again in January," DeJoy explained. This past January, the USPS increased shipping prices by around 3.1 percent.
DeJoy said the Postal Service is still dealing with significant financial issues.
ShutterstockDeJoy was first appointed by the USPS Board of Governors as Postmaster General in 2020, under the administration of former President Donald Trump. At the time, the agency was projected to lose $160 billion over the next 10 years, according to DeJoy. But while the Postmaster General said the USPS' current financial results are "showing improvement," he noted that without "immediate and substantial action," the Postal Service is still looking at around $60 to $70 billion worth of losses over that same period.
"All stakeholders need to realize that each day lost in executing on our strategy will consume cash and eventually accumulate to a cash deficit that will necessitate more aggressive actions by us or the federal government," DeJoy said during the Aug. 9 meeting.
Inflation is also reportedly impacting the agency.
iStockDuring the meeting, USPS Chief Financial Officer Joe Corbett said that the agency remains "in a financial hole," but it doesn't appear to just be part of the same ongoing problem. According to DeJoy, the agency is now also dealing with "some stiff inflationary pressure." The Associated Press reported on Aug. 10 that while inflation has fallen from its 40-year-record high of a 9.1 percent consumer price index (CPI) increase in June, it was still high in July at a CPI increase of 8.5 percent compared to the year prior.
"As everyone knows, inflation has hit the nation hard, and the Postal Service has not avoided its impact. We expect inflation to exceed our expectations by well over a billion dollars against our planned 2022 budget," DeJoy explained, noting that this is the primary reason he is recommending another price hike for Jan. 2022.
The Postmaster General added, "We must deal with the reality of our financial status and the impact inflation will have on our improvement strategies."
