US Postal Service Cuts 50 Million Work Hours, Closes Facilities to Save Billions of Dollars

The United States Postal Service (USPS) said Thursday it has saved billions of dollars annually by cutting 50 million work hours, closing unnecessary facilities, and increasing plant productivity.

In addition to work-hour savings, Delivering for America has resulted in “$2.2 billion in annual transportation cost reductions by streamlining networks and optimizing air and surface options.”

USPS reported an increase in revenue by $3.5 billion annually by “adapting product offerings” as First-Class Mail volume has dropped

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USPS also announced implementing “refinements to service standards” which it claims will save the agency a minimum of $36 billion over the next decade through reductions in real estate, transportation, and mail and packaging costs.

Even though service enhancements are not expected to cause delays in the current First-Class Mail delivery time, changes in regional transportation schedules may extend service expectations by one day for mail collected at certain post offices locations. Overall, delivery speeds for both mail and packages are expected to improve, USPS said.

The agency plans on implementing service enhancements in two phases, with the first set to begin on April 1 and the second on July 1.

“For decades—and most specifically during the last three years—Congress has actively resisted operational solutions and meaningful change.”

USPS’ new cost reduction plan comes after the agency reported a net loss of $9.5 billion for fiscal year 2024, which was $3 billion more compared to 2023. The higher losses happened despite revenues rising slightly from $78.18 billion to $79.53 billion.

Price hikes had “disastrous effects” in 2023, with mail volume falling by 11 billion pieces and the agency suffering $6.5 billion in losses, the senators wrote in a letter.

DOGE and GSA are set to assist the postal agency in “identifying and achieving further efficiencies,” DeJoy said via letter. The focus shall be on reviewing the “mismanagement of our self-funded retirement assets and the actuarial miscalculations of our retirement obligations.”

The effort will look into the “mismanagement of our Workers’ Compensation Program” which resulted in $400 million in excessive annual charges compared to practices in the private industry.

GSA and DOGE intend to probe “burdensome regulatory requirements restricting normal business practice” at USPS which has cost the postal service more than $50 billion in damages, DeJoy wrote.

“Our collective bargaining agreement is between the APWU and the Postal Service. Any effort by DOGE, or any other entity, to weaken our union rights or target our contractual protections and working conditions, will be met with immediate and sustained resistance by postal workers,” the union said.

Meanwhile, the National Association of Letter Carriers took a more open approach on the matter.

Several of the matters that DOGE could assist USPS with are issues that National Association of Letter Carriers has been actively looking at for many years, he said.

“These include USPS’s misallocated pension liabilities, which have cost the agency tens of billions of dollars, and a new investment strategy for USPS’s three retirement funds, which are currently held in Treasury bonds, missing out on hundreds of millions in annual returns.”

National Association of Letter Carriers opposed the privatization idea. “A friendly reminder on behalf of every American who depends on USPS (including 51.5 million rural addresses): It’s called universal service, not ‘as much as possible’ service,” the group wrote in a post on social media platform X. “And we’ll #FightLikeHell to protect it.”

President Donald Trump had also previously suggested privatization of USPS. Last month, he raised the possibility of merging the postal service with the Commerce Department, an idea that was opposed by Democratic lawmakers.