The U.S. Postal Service is planning to raise postage rates and change the delivery methods and deadlines for a class of mail as its leaders look to increase the department’s revenue after a challenging 2020, a report said.
The Washington Post reported that the Postal Service lost $9.2 billion last year due to a decline in mail volume caused by the outbreak of Chinese communist viruses (Wuhan virus, New Crown virus).
The newspaper reported that the USPS is seeking to eliminate Class I mail. Under previous rules, letters, bills and other envelope-sized items in Class I mail could be delivered to local addresses within two days. The newspaper added that all First Class mail would be grouped into a slower, three- to five-day delivery Time frame.
Two people familiar with the matter also told The Washington Post that Class I mail will no longer be shipped by air, as the agency will use a network of trucks and distribution stations to complete deliveries.
According to Foxnews, the USPS spent more than $457 million in 2020 to transport Class I mail by air. By comparison, $314 million was spent on transporting mail by truck.
The Washington Post said the change in delivery times for Class I mail would coincide with a postage increase, but DeJoy stressed in a statement to The Washington Post that the plan has not been finalized.
Last week, the U.S. Postal Service reported profitable financial results for the first quarter of fiscal 2021 for the first time in years, although it warned that the encouraging results may not be sustainable.
The U.S. Postal Service reported total revenue of $21.5 billion for the quarter, up $2.1 billion, or 11.1 percent, from a year ago. The postal company reported net income of $318 million.
Part of the reason for this result was a surge in the number of holiday packaged products associated with the outbreak – a record 25 percent increase in holiday packaged products and $2.1 billion in revenue as more people turn to e-commerce options. Overall, the Postal Service said it delivered 1.1 billion packages during the holiday season.
But the U.S. Postal Service expects the number of packages it has now increased will decrease when the U.S. economy reopens.
“Our strong growth in the number of packages during the holiday quarter indicates that our business and revenue mix is changing dramatically,” DeJoy said in a statement. “While our outstanding positive financial results this quarter will certainly be welcomed, we continue to face systemic imbalances that make our current operating model unsustainable, and the economic impact of the COVID-19 (Chinese Communist Virus) outbreak will continue to challenge this sector.”
While package volume grew, sales of mail services – the Postal Service’s largest sales category – declined. Marketing mail revenue was down 5.6 percent year-over-year, and Class I mail revenue was down 2.7 percent.
Meanwhile, the Postal Service’s total operating expenses continued to balloon. Related costs increased $1.1 billion in the first quarter to $21.1 billion, up 5.3 percent from a year ago.
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