US Postal Service Reduces 50 Million Work Hours and Closes Facilities to Save Billions
The agency has been experiencing significant financial setbacks in recent years and is now collaborating with DOGE to enhance productivity.
The United States Postal Service (USPS) announced on Thursday that it has achieved annual savings in the billions by reducing 50 million work hours, closing unnecessary facilities, and boosting plant productivity.
Beyond work-hour reductions, Delivering for America has also led to “$2.2 billion in annual transportation cost savings by refining networks and optimizing both air and surface options.”
USPS reported an increase in revenue by $3.5 billion annually by “adjusting product offerings,” even as the volume of First-Class Mail has decreased.
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USPS further revealed plans to implement “refinements to service standards,” which they claim could save the agency at least $36 billion over the next decade by reducing costs in real estate, transportation, and mail and packaging.
While enhancements to services are not projected to delay current First-Class Mail delivery times, shifts in regional transportation schedules may extend service expectations by an additional day for mail collected at certain post office locations. Overall, USPS indicated that delivery speeds for both mail and packages are anticipated to improve.
The agency intends to roll out service enhancements in two stages, with the first beginning on April 1 and the second on July 1.
“For decades—especially during the last three years—Congress has actively resisted operational solutions and substantial change.”
The new cost-reduction plan by USPS comes on the heels of the agency reporting a net loss of $9.5 billion for fiscal year 2024, which was $3 billion more than the loss reported for 2023. These increased losses occurred despite a slight increase in revenues from $78.18 billion to $79.53 billion.
They noted that price increases had “disastrous effects” in 2023, leading to a decline in mail volume by 11 billion pieces and the agency incurring $6.5 billion in losses, according to their correspondence.
Collaboration with DOGE
Last week, DeJoy notified congressional lawmakers that USPS has entered into an agreement with the Department of Government Efficiency (DOGE) and the General Services Administration (GSA) to collaborate on several issues.
DOGE and GSA will assist the postal agency in “identifying and achieving additional efficiencies,” DeJoy mentioned in his letter. The aim will be to address the “mismanagement of our self-funded retirement assets and the actuarial miscalculations related to our retirement obligations.”
This initiative will also investigate the “mismanagement of our Workers’ Compensation Program,” which has led to $400 million in excessive annual charges compared to norms in the private sector.
GSA and DOGE intend to analyze “burdensome regulatory requirements that limit standard business practices” at USPS, which DeJoy stated have cost the postal service more than $50 billion in damages.
“Our collective bargaining agreement is established between the APWU and the Postal Service. Any attempts by DOGE, or any other entity, to undermine our union rights or target our contractual protections and working conditions will face immediate and sustained resistance from postal workers,” the union asserted.
Conversely, the National Association of Letter Carriers responded more positively regarding the agreement.
Numerous matters that DOGE could help USPS resolve are issues the National Association of Letter Carriers has been examining for years, he added.
“These involve USPS’s misallocated pension liabilities, which have cost the agency tens of billions of dollars, and a new investment strategy for USPS’s three retirement funds, currently held in Treasury bonds, thus forgoing hundreds of millions in annual returns.”
The National Association of Letter Carriers opposed the privatization suggestion. “A friendly reminder from everyone who relies on USPS (including 51.5 million rural addresses): It’s called universal service, not ‘as much as possible’ service,” the group posted on the social media platform X. “And we will #FightLikeHell to preserve it.”
Previously, President Donald Trump had also floated the idea of privatizing USPS, and last month proposed merging the postal service with the Commerce Department, a notion that was met with resistance from Democratic lawmakers.
