USPS cuts to slow 1st-class mail delivery

WASHINGTON -- Facing bankruptcy, the U.S. Postal Service is pushing ahead with unprecedented cuts to first-class mail next spring that will slow delivery and, for the first time in 40 years, eliminate the chance for stamped letters to arrive the next day.

The estimated $3 billion in reductions, to be announced in broader detail today, are part of a wide-ranging effort by the Postal Service to quickly trim costs, seeing no immediate help from Congress.

The changes would provide short-term relief, but ultimately could prove counterproductive, pushing more of America's business onto the Internet. They could slow everything from check payments to Netflix's DVDs-by-mail, add costs to mail-order prescription drugs, and threaten the existence of newspapers and time-sensitive magazines delivered by postal carrier to far-flung communities.

That birthday card mailed first-class to Mom also could arrive a day or two late, if people don't plan ahead.

"It's a potentially major change, but I don't think consumers are focused on it and it won't register until the service goes away," said Jim Corridore, analyst with S&P Capital IQ, who tracks the shipping industry. "Over time, to the extent the customer service experience gets worse, it will only increase the shift away from mail to alternatives."

The cuts, now being finalized, would close roughly 250 of the nearly 500 mail processing centers across the country as early as next March. Because the consolidations typically would lengthen the distance mail travels from post office to processing center, the agency also would lower delivery standards for first-class mail.

Currently, first-class mail is supposed to be delivered to homes and businesses within the continental United States in one day to three days. That will lengthen to two days to three days, meaning mailers no longer could expect next-day delivery in surrounding communities.

Expressing urgency to reduce costs, Postmaster General Patrick Donahoe said in an interview that the agency has to act while waiting for Congress to grant it authority to reduce delivery to five days a week, raise stamp prices and reduce health care and other labor costs.

The Postal Service, an independent agency of government, does not receive tax money, but is subject to congressional control on large aspects of its operations. The changes in first-class mail delivery can go into place without permission from Congress.

"We have a business model that is failing. You can't continue to run red ink and not make changes," Donahoe said.

"We know our business, and we listen to our customers. Customers are looking for affordable and consistent mail service, and they do not want us to take tax money."