Postal Regulatory Commission recommends changes as USPS implements Delivering for America

The Postal Service has committed to a 10-year strategic plan it calls Delivering for America. And whenever the Postal Service determines that it should change the “nature of postal services,” and those changes will “affect service on a nationwide or substantially nationwide basis,” it is required by law to submit a proposal to the Commission before implementing those changes.

The Postal Service says it’s most recent proposal to implement Delivering for America, which it submitted to the Commission for an Advisory Opinion, will allow it to improve productivity and efficiency, as well as achieve annual cost savings of between $3.6 and $3.7 billion once the initiatives are fully implemented.

In this case, the Commission’s Advisory Opinion disagrees with the Postal Service’s proposed changes to service standards. The Commission finds that the plan is based on defective modeling and is not ready for implementation. The Postal Service relied on overly optimistic and unsubstantiated financial projections for cost savings that are also not likely to improve the overall financial health of the Postal Service. In addition, the Commission believes that rural areas will be disproportionately affected by the Postal Service’s proposed changes.

What is Delivering for America?

In 2021, the Postal Service launched a strategic plan: Delivering for America. The plan aimed to address financial losses the Postal Service has reported since 2006 and the timeliness with which the Postal Service delivers mail.

Under Delivering for America, there are new kinds of processing facilities aimed at improving mail delivery delays and saving on costs.

But a December 2024 Inspector General report found that after piloting parts of the plan’s optimization methods at 15 regions throughout the U.S., service was negatively impacted. Service performance scores declined, and customer complaints about mail delivery delays increased.

In fact, the data indicates the Postal Service has failed to meet its on-time goal of 95 percent since 2020.

Financially, despite DFA’s pilot program, the Postal Service doesn’t appear to be on track to break even. In 2024, the Postal Service’s financial position worsened compared to the year prior.

In fact, the Postal Service has not produced an operating profit in the last seven fiscal years and the financial losses continued to grow.? In FY 2023, the Postal Service recorded a net loss of $6.5 billion. In FY 2024, the Postal Service recorded a net loss of $9.5 billion. ?For FY 2025, the Postal Service projects a net loss of $6.9 billion.

Commission’s Findings

The projected cost savings will not significantly improve the financial health of the Postal Service

As the Advisory Opinion states, the Commission finds that many aspects of the proposed initiative lack adequate research and preparation.? The Postal Service made several errors in its calculation, and in its Advisory Opinion, the Commission concludes that it is unlikely that the Postal Service will create a more efficient network.?

The Commission finds that the Postal Service’s projections are based on assumption and conjecture.

The proposal will have significant negative impacts on rural communities

In considering the Postal Service’s claims that service performance and reliability will improve because of its proposed changes, the Commission is concerned that the opposite may occur, as demonstrated by the considerable decline in service performance in areas where new facilities related to the network changes have already been opened.

Additionally, the proposal is likely to have significant negative impacts on certain mail products and rural communities. The Postal Service’s plan focuses on the potential service enhancements under the proposed service standards and downplays the significant adverse effects that its proposal will have on certain mail categories, mail classes, and rural communities.

The Commission finds that:

??Rural communities will experience disproportionate downgrading of service standards.

??For Single-Piece First-Class Mail (such as individual letters and postcards, the type of mail most likely to be used by a household), 49.5 percent of ZIP Code pairs (mail sent from one ZIP Code to another) will experience downgraded service.

??Periodicals and Package Services will experience significant downgrades.

??Considerable decline in service performance has already been demonstrated in areas such as Richmond, Virginia, and Atlanta, Georgia, where the proposed network changes have already been implemented.

??The Postal Service currently lacks a system to accurately, reliably, and representatively measure service performance at the 5-digit level.

For more on this, visit www.prc.gov where you can find the Commission's Advisory Opinion, FAQs, and more.

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