Despite the popularity of expedited delivery options like Amazon Prime the U.S. Post Office will increase delivery times significantly. More than a decade of losses has put the U.S. Postal Service in a dire financial situation. The biggest change in operations and the main reason for the longer delivery times stems from a reduced reliance on air transportation. About 20% of first-class mail was previously transported by air, but USPS said just 12% of mail will be sent by airplane under the new changes.
According to one analysis, a third of first-class mail and packages sent to 27 states will be slowed under the new guidelines. It will take 75% of mail sent to Nevada longer to arrive than before in one of the starkest examples of the change.
e-Commerce Will Be heavily affected.
The USPS is relied upon not only by small businesses who sell goods via their own websites, but also sprawling online marketplaces operated by Amazon, EBay, Etsy, as well as major retailers like Walmart and Target. Growth in package shipping from online retailers like Amazon has consistently been a bright spot in the Post Office’s financial results, amid declines in shipments of letters and magazines. Amazon has built up a vast logistics and fulfillment operation across the country, but it still relies on the Postal Service to handle some last-mile deliveries when it’s not using its own contractors. An Amazon spokesperson declined to comment on what percentage of its packages are delivered by USPS, but some analysts estimate the Postal Service delivers 40% of Amazon’s orders. UPS, DHL and FedEx also rely on the Postal Service to handle a portion of their last-mile deliveries via the same Parcel Select service used by Amazon. The service allows carriers and companies like Amazon to handle the long-distance portion of the delivery process, then drop packages off at local Post Offices, where employees handle last-mile deliveries within a certain radius. Last mile delivery is generally considered the most expensive portion of the delivery process costs, and now it appears, delivery times will increase. For small business owners, the USPS is often the most affordable and reliable shipping option available. Roughly 89% of the small- and medium-sized businesses that use Shippo, an e-commerce platform, select the USPS as their primary carrier.
Higher Prices Seem Inevitable
Calls to keep USPS prices affordable have garnered support from a growing number of e-commerce companies and retailers. The Package Coalition, a lobbying group backed by Amazon and eBay, among others, has urged lawmakers to keep the service “affordable and reliable.” I’m sure the Package Coalition has its due influence, but their lobbying efforts are unlikely to have significant results. The intent of this USPS service restructuring is to claw its way out of the current financial mess . Higher prices are nearly a certainty. Its not a question if but when. Commercial enterprises will bear the brunt of the increases which means we all will feel the affect. Residential mail delivery will be less affected since it is made up, primarily of advertisements. If your still receiving paper checks like Social Security payments get on the electronic band wagon quickly.
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