Postal Service Overhaul Runs Into Challenges

More than three years ago, the U.S. Postal Service unveiled a sweeping 10-year plan meant to steer the organization out of a financial crisis. The plan, which included consolidating locations, raising prices and lengthening promised delivery times, was meant to stabilize an agency that had lost $87 billion over the past 14 years.

That effort has run into major obstacles. Early attempts to modernize the delivery network temporarily led to worse service in areas like Atlanta and Richmond, Va., where the agency has rolled out new regional processing and distribution centers.

The Postal Service’s long-term financial viability also remains in doubt. Revenue is up, but expenses have climbed, in large part because inflation has surged in recent years and driven up labor costs. At the same time, the agency is grappling with declining mail volume.

In early 2021, Postal Service management initially projected that it would break even by fiscal year 2023. Instead, the agency, which is supposed to be self-sustaining, lost $6.5 billion that year and is projected to lose an additional $6.3 billion this fiscal year.

Lawmakers have pushed back on the changes, in part because of complaints about mail service in their districts. In May, a bipartisan group of 26 lawmakers sent a letter to the agency’s leaders expressing concern about the decline in on-time delivery in regions where there have been major changes. The lawmakers also called on the agency to pause changes to its processing network until its regulator fully studied their potential impact.

In response, Louis DeJoy, the postmaster general, said the agency would pause some of the changes until January and move forward with others that were underway.