Huge Stakes For U.S. Postal Service This Holiday Season

Postmaster General Louis DeJoy is leading an upbeat, audacious charge from the U.S. Postal Service (USPS) for the holiday season, also known as peak season.

“We’re going to kill it,” he told The Wall Street Journal in outlining numerous investments and organizational steps USPS has taken since last year when mail and package deliveries were dismal for weeks. Similar comments have been made in other news interviews and speeches.

The stakes are high for DeJoy and USPS. Without a dramatic improvement in performance from last year’s holiday season DeJoy could be removed and USPS’s 10-year Delivering for America plan, issued March 23, 2021, could be scuttled.

Good News

USPS has shown contrition for last year’s performance, boldly promised improvement, and taken important concrete actions. These include:

• Leasing an additional 7.5 million square feet for 45 package annexes;
• Installing new high-speed package processing equipment, including 102 package sorting machines; and
• Hiring 40,000 seasonal workers.

A central aim is to be able to process and deliver 4.5 million more packages per day in 2021 than 2020.

Bad News

USPS also faces formidable challenges including:  

• Smoothly integrating the 40,000 new hires and coordinating new logistics operations with annexes are inherently challenging.
• Mail volume will be substantially higher in 2021 than 2020. With the pandemic subsiding, USPS will have much more marketing mail to deliver than in 2020.
• USPS expressed concerns about the federal vaccine mandate in a November 10 regulatory filing. It said meeting the requirement “will be extremely challenging to implement and administer during the height of our peak season, particularly given its expedited schedule.”

Canary in the Coal Mine?

Earlier this year, USPS promised that if first-class mail standards were slowed, it would deliver 95 percent of first-class mail on time. The standards for delivering 39 percent of first-class mail were lowered on October 1, but the promised delivery times have not occurred.  

• In its May 14, 2021 annual report to Congress USPS said, “the Postal Service intends to set and achieve service performance targets of 95% across all product categories.”
• Its 10-year plan issued on March 23 USPS said, “Updated service standards will position us to achieve significant cost savings and provide service that meets or exceeds 95 percent on-time reliability” and that these standards would be met “at all times of the year.”
• In an April 21, 2021 filing with the Postal Regulatory Commission, it said it “intends to consistently meet or exceed service performance targets of 95 percent through implementation of this change, as well as other initiatives.”

On November 18, USPS announced that it had delivered 91.1 percent of first-class mail on time for the period October 1-November 12. This means approximately 450 million pieces of first-class mail were delivered late, at a time of year when mail volume is slow. What is perhaps most distressing about this, and related announcements, is the push to spin the number as acceptable.

The Ramifications

It is distressing that as we enter the holiday season the target delivery times for 39 percent of first-class mail are lower than last year. Whether it is used to send Christmas cards, gift cards, or important year-end financial information, timely delivery of mail contributes to a better holiday season. Regardless of how well USPS does with packages this holiday season, it should return to the pre-October 1 mail delivery standards.

While a failure of the magnitudes of last year seems unlikely, a poor performance will call into question USPS’s 10-year Delivering for America plan and Louis DeJoy’s future at USPS.

Everything is in play and on the line for USPS this holiday season.

About the Author: Paul Steidler is a Senior Fellow with the Lexington Institute, a public policy think tank based in Arlington, Virginia.