It was a busy week for postal news as USPS peak season looms. The Board of Governors met on Tuesday, the same day the USPS released its financials for the latest quarter. The following day, the Postal Service announced its holiday-shopping period rate hike for 2022 which will go into effect on October 2nd.
During remarks on Tuesday before the Postal Service Board of Governors, Postmaster General Louis DeJoy said the Postal Service was preparing for peak season and said he was confident that it would “be in good shape for this year’s challenges,” though he said it was having trouble in hiring new letter carriers, especially in rural communities:
“We will be adding approximately 120 package sorters throughout the network this year bringing the total since the release of the Delivering for America plan to 250 units across the nation, while adding over 13 million square feet to accommodate them.
“This, combined with improved operating practices, will make the United States Postal Service your best option to ship your packages….and your only option to cost effectively mail your Christmas Cards. So ship them together, in an integrated manner!
“We continue to recruit new employees to the organizations with job fairs and other initiatives around the nation with better than average success.
“Many of our functional areas are near fully staffed and we have meaningful increases in our full-time career employment. This will enable us to rely less on seasonal employees which we believe will prove difficult to hire this season.
“Having said that we are still having trouble in hiring new letter carriers, especially in the in rural communities. We are deploying new recruiting tactics and working with our union leadership to develop ways to improve on this situation.”
In May, the USPS had said it expected it would receive about 40 million packages on its busiest days during the 2022 peak season but would be ready to handle 50 million packages a day.
Rising Rates
PMG DeJoy also said on Tuesday he was still on track to raise prices in January (he already pledged to raise rates twice a year, up from once a year and not counting the now-annual holiday rate hike) because, he said, inflation was impacting the USPS.
He’s advocating a rate hike in January despite significant help from Congress in 2022 through the enactment of the Postal Service Reform Act (PSRA) on April 6, 2022. In its quarterly report, the USPS stated the PSRA “significantly impacted the financial condition of the Postal Service, as it repealed the requirement that the Postal Service annually prepay future retiree health benefits and canceled all past due prefunding obligations. These impacts are reflected as a one-time, non-cash benefit of $59.6 billion to net income for the quarter.”
A Matter of Survival
The Postmaster General also conveyed an urgent need to execute on his plan for the “future survival” of the organization and had harsh words for the industry.
“Initiatives by stakeholders to delay the simplest of our operational changes to integrate our network, improve our service and reduce our cost are relics of our failed strategies of the past.
“These actions have led to the near financial ruin of the Postal Service and I ask all stakeholders — mailers, shippers, legislators, and regulators — to support this management team and board of governors in what I believe should be our collective efforts to move swiftly with our plans to Save the Post Office and ensure a vibrant organization that provides the excellent service which our customers and country deserve.”
It’s not clear why the USPS transcript of DeJoy’s speech before the Board of Governors capitalized the words “Save the Post Office,” but that happens to be the name of a website and Twitter account run by retired English professor Steve Hutkins who reports closely on postal matters.
Save the Post Office tweeted on Thursday in apparent defiance of DeJoy’s message for stakeholders to get in line and support his initiatives:
“When USPS raises shipping prices, it drives business to UPS & Fedex and enables them to raise their prices too. The Post Office began parcel post in 1913 because private shippers had formed a price-colluding cartel. Low USPS rates are good for the country.”
The USPS quarterly report revealed a decline in Shipping and Packages volume, which we reported on the EcommerceBytes Blog on Wednesday, and more information about the upcoming holiday surcharge can be found in Wednesday’s Newsflash.
Guess I was wrong, thought I’d have 2-3 years left, looks like next year will be the end of my business. I have to raise my rates .50 cents per 1st class package come Oct. 3rd, if Dejoy gets his way and raises rates about the same come Jan. 2023, I’ll have to add another .50 cent to shipping. So I’ll have to charge $5.25 per 4 oz 1st class package, up from $4.25 Jan 2022, $3.50 Jan 2021, not to mention how much will shipping supplies jump to cover the increases too and fees on top of that.
I thought ebay was stupid by shifting to HIGH end items but its starting to make sense, alot low end items won’t sell with these constant and higher increases.
Labor shortages are everywhere in the U.S. economy. During Covid, it was older adults who decided to leave the workforce; causing a huge hole in the employment gap. Time will tell if USPS can really deliver on time.
As an Etsy seller, it’s not unusual for me to close shop as of December 1st if I feel the postal service cannot keep up with demand. Having said that, inflation data may keep buyers from the usual spending for any typical holiday buying season.
It will be interesting to say the least…