Ask Randy: USPS 10-Year Plan Proposal Recap

The USPS 10 year plan, unveiled on March 23, 2021, has been presented as the path for the USPS to achieve financial sustainability and service excellence. Items highlighted in the 10-year plan include:

  • Asks for bipartisan legislation in Congress to repeal the retiree health benefit pre-funding mandate and to maximize future retiree participation in Medicare
  • Maintains affordable, six-day mail delivery while expanding seven-day package delivery
  • Generates $24 billion in net revenue in part from enhanced package delivery services for business customers, including same-day, one-day and two-day delivery offerings
  • Improves cash flow to allow for investment in workforce, new vehicles, improved Post Offices, technology improvements, and infrastructure upgrades
  • With congressional support, accelerates move to an electric delivery vehicle fleet
  • Enhances customer experience via new suite of consumer and small business tools
  • Stabilizes workforce with a goal of cutting non-career employee turnover in half, and creating more opportunity for growth including more predictable progression into career workforce
  • Aligns pricing to reflect market dynamics
  • Adjusts select delivery standards to improve efficiency and reliability

Many of the above items are not new topics for the Postal Service. 

  • For years, the USPS has been asking for support from congress to repeal the current retiree health benefit pre-funding mandate. Maybe the USPS feels that there is now an opportunity for this to happen.
  • The USPS has recently signed a contract to purchase a fleet of electric delivery vehicles.
  • The USPS, based on congressional pressure, has a hard time getting away from 6-day mail delivery, especially when the proposal is offering 7-day package delivery in some areas. Proposing the ability to maintain or expand these offerings at affordable prices taps in to increasing pricing on other market dominant products as well as moving the transport of many items from air to surface. Which brings us to:

Select delivery standards adjusted to improve efficiency and reliability.

On April 6, the USPS conducted a call regarding their 10-year plan and the anticipated impact this plan will have on First Class mail delivery. Past delivery performance was reviewed as well as current delivery standards.

The USPS wanted attendees to consider the fact that for years the USPS has not been achieving the established service standard delivery goal of 1-3 days for first class mail. I guess to make themselves look better and eliminate valid concerns regarding slow delivery the USPS has proposed changing this delivery standard to 1-5 days. To further justify the proposal the USPS coupled lengthening delivery time with changing the mode of transportation, which would cut costs.

Under current network operations, aligned to achieve 1-3 day delivery of First Class Mail, the USPS relies on 21% of first class mail volume to be transported by air. The change to a 1-5 day delivery standard (really 1-6 if you include off shore locations such as Puerto Rico and Hawaii) would allow the USPS to shift close to 10% of first class volume to surface transportation deemed more “reliable and predictable.”

In the new plan, distance matters. The USPS contention is that 70% of first class mail volume would still have a delivery standard of 1-3 days with local mail not exceeding a 3-hour drive time still delivered in 2 days. First Class mail delivery beyond the distance of 199 miles would deliver in 3-5 days per the chart below.

I guess the bottom line question is; should we care?

The answer is both yes and no. The USPS should be addressing performance issues that have affected first class mail delivery. In particular, they should be going facility to facility, reviewing what each plant is doing right, and wrong. However, many of us should have concluded quite a while ago that first class mail does not deliver in the listed USPS standard time frame.

Below are various mailing and printing organizations with access to lobbying efforts:

National Postal Policy Council and Major Mailers Association (primarily First-Class)

Greeting Card Association (First-Class)

National Newspaper Association and News Media Alliance (newspapers)

MPA — The Association of Magazine Media (Periodicals)

American Catalog Mailers Association (catalogs)

Alliance of Nonprofit Mailers (nonprofit Marketing Mail)

Envelope Manufacturers Association (all classes)

Association for Postal Commerce (all classes)

Parcel Shippers Association (USPS package products)

Coalition for a 21st Century Postal Service (all classes; ratepayers and mail producers)

Printing United Alliance (on behalf of printers)

Randy Weiler
Senior Director of Postal Affairs, Logistics & Strategy

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