There is an assumption by many politicians and believing citizens, the USPS is supposed to be profitable entity and run like a business. This is what the Postmaster General brings to the table as a solution. It was never the goal of the USPS to be such. Its task is to deliver mail to every place in the nation at the same amount of time. This in itself costs. PMG Dejoy believes this is ok. The USPS can penalize people who live outside of a 50-mile radius of the new distribution centers and increase the costs of first-class mail as the delivery time increases. Something is wrong with the proposed logic. The issues with the billion in losses? A large part of this was the pre-funding of the USPS retirement plan. This was sponsored by Senator
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There is an assumption by many politicians and believing citizens, the USPS is supposed to be profitable entity and run like a business. This is what the Postmaster General brings to the table as a solution. It was never the goal of the USPS to be such. Its task is to deliver mail to every place in the nation at the same amount of time. This in itself costs.
PMG Dejoy believes this is ok. The USPS can penalize people who live outside of a 50-mile radius of the new distribution centers and increase the costs of first-class mail as the delivery time increases. Something is wrong with the proposed logic.
The issues with the $87 billion in losses? A large part of this was the pre-funding of the USPS retirement plan. This was sponsored by Senator Susan Collins.
The mandate requires the Postal Service to prefund its retiree health care benefits 75 years in advance, paying for retirement health care for individuals who haven’t been born yet, let alone enter the workforce.
Since 2013, the prefunding mandate is responsible for most of the Postal Service’s net losses, and it has defaulted on its prefunding payments since 2012. No other federal agency or private sector business prefunds its retirement benefits. The uncertainty inherent in satisfying the PAEA prefunding mandate is creating real instability in the Postal Service’s operations. Postal Accountability and Enhancement Act (PAEA) of 2006
On April 6, 2022; The Postal Service Reform Act of 2022, H.R. 3076, was passed by the House on February 8, passed by the Senate on March 8, and signed into law by President Biden on April 6. This repealed the PAEA of 2006 and the need for prefunding.
Some additional information by Farm Week on the results of Dejoy’s USPS modernization and who suffers the most from his plan.
USPS changes could mean slower rural delivery, Farm Week Now
Proposed operational changes within the U.S. Postal Service aim to financially stabilize the agency and improve service reliability, but critics say the plan discriminates against rural America.
The changes, which were announced last month but have not been approved, would entail faster service to customers within 50 miles of the Postal Service’s largest processing facilities. But for outlying areas, the change could add an additional day to delivery, though mail would still be delivered within five days or fewer across the continental U.S.
The proposed operational updates will modernize the ground transportation network to reflect changing customer needs, reduce costs to become financially self-sufficient and provide more predictable and reliable service, according to a USPS fact sheet.
For more than a decade, the postal service has operated under a broken business model that amassed more than $87 billion in losses from 2007 through 2020. The proposed actions are projected to reduce costs by approximately $3 billion annually.
Underpinning the plan is the need to pivot to a network built around both letters and parcels.
The USPS is introducing “Regional Transportation Optimization,” which is consolidation of delivery and collection activities. For post offices far from regional hubs, pick-up and drop-off of mail will occur primarily in the morning. Essentially, USPS would allow mail and packages to sit at certain facilities for an extra day instead of transporting them immediately for processing and delivery.
Many stakeholders who spoke during a pre-conference virtual hearing with USPS legal representatives and leaders Thursday said the changes discriminate against rural residents, who can live hundreds of miles from regional hubs. The lack of internet availability and seniors needing timely prescriptions force rural residents to heavily rely on the postal service, they added.
USPS panelists stressed most customers will see the same or upgrades in service, while 6% are expected to experience downgrades. They also noted medications also should continue to be delivered at their current speed, or faster, under the proposal.
“Delivery for approximately 75% of first-class mail will not be impacted by the refinements to our current service standards, and around two-thirds of mail will be delivered in three or less days,” according to USPS. “All first-class mail and USPS ground advantage will continue being delivered within five days. Our other products, like marketing mail and periodicals, will also see improved service standards, with the day ranges for those products being shorter overall than they are today.”
Three years ago, Postmaster General Louis DeJoy announced the 10-year Delivering for America plan, but practices continue to reflect a Postal Service designed for three decades ago, he said.
Many central and southern Illinois residents can attest to breakdowns in the network. U.S. Rep. Mike Bost, R-Murphysboro, has received more than 250 complaints about postal service since January from nearly every one of the 34 counties in his congressional district.
“Southern Illinoisans have been consistently facing delivery delays, missing mail and significant problems that all link back to the USPS St. Louis Distribution Center,” Bost said on X following a visit to the distribution center to discuss ways to work together to find a resolution. “This has caused serious disruptions, like delayed medications or utility bills, late fees and even the loss of cremated remains. This widespread problem is not just a service failure but a violation of trust, and it demands accountability and urgent reform.”
Illinois Farm Bureau President Brian Duncan sent a letter to DeJoy in March about the consequences of a proposal to transfer Peoria’s mail sorting operations to suburban Bedford Park. USPS officials have announced similar changes for facilities in Champaign, Springfield and the Quad Cities.
IFB members also consistently rely on the news and market information contained within FarmWeek to make important decisions about their farming operations, Duncan wrote.
U.S. Rep. Nikki Budzinski, D-Springfield, criticized DeJoy’s proposal.
“From prescriptions to letters from loved ones, mail is essential for folks to stay connected,” she said on X. “Postmaster DeJoy has no business slowing service in areas already struggling to receive mail on time — including rural communities in central and southern Illinois.”
The Postal Service will consider the comments received during the virtual conference and will file its formal request asking for an advisory opinion from the Postal Regulatory Commission (PRC). After receiving an advisory opinion from the PRC, the Postal Service will consider the commission’s opinion and finalize its decision. The changes would not be implemented until 2025.