The United States Postal Service will slow delivery times for a third of its first-class packages in an effort to cut costs and its dependency on air transportation amid financial struggles.
The move — effective May 1 — is part of USPS’s 10-year plan to reduce more than $100 billion in projected losses. The slower delivery times will allow USPS to use more trains and trucks as modes of transportation, which is more cost-effective and reliable than air transportation, according to USPS.
“This action will contribute to our cost savings efforts and improve our reliability across all product classes, including our growing package market,” Postmaster General Louis DeJoy wrote in a statement.
USPS will also remove the extra day for Priority Mail transported via ground which was added in April 2020 given global supplychain and transportation issues during the pandemic.
Earlier in April, President Biden signed a Postal Service Reform Bill into law, which will save the company $107 billion over the next 10 years by eliminating a requirement to prefund retiree health benefits.
DeJoy pushed for the legislation as USPS has been operating at a net annual loss for over a decade, warning that it could run out of cash by 2024 without reforms.
“This bill recognizes the Postal Service as a public service and we’re ensuring that it can continue to serve all Americans for generations to come,” Biden said at the signing.
Throughout DeJoy’s tenure heading USPS, the agency has come under scrutiny for delays in delivering COVID-19 tests and mail-in ballots in November 2020.