The US Postal Service will slow down First Class Package Service (FCPS) for packages that travel longer distances by transporting them by ground instead of by air. Packages traveling the greatest distances will be most affected: 32% of volume will see the service standard increase by one or two days.
The Postal Service similarly slowed down First Class Mail and had already indicated its intention to slow down FCPS last June.
The Postal Regulatory Commission (PRC) took issue with some aspects of the proposed FCPS slowdown three months later. However, it pointed out that since the USPS reclassified First Class Package Service as “competitive” rather than “market dominant,” it had little oversight into the change. Even with Market Dominant products, PRC’s final opinions are advisory in nature, it had noted.
Today’s announcement revealed the following changes would take effect on May 1st:
- Sixty-four percent of First-Class Package Service volume will be unaffected by the proposed standard changes. Four percent will be upgraded from a 3-day to 2-day service standard. For the remainder of the volume (32 percent), the service standard will increase by one or two days.
- The USPS will remove the extra day for Priority Mail transported via ground established April 2020 for COVID-19.
- The USPS will maintain the extra day for Priority Mail transported by air for the near term.
Last year, the USPS had also changed the delivery time for Priority Mail Express to 6 pm on the committed delivery day rather than 10:30 am (in select locations for an extra fee), noon, or 3 pm, making it less attractive than competitors’ services for shippers in a hurry.
Online sellers are already looking to rival UPS as an alternative as the USPS continues to make its package services less appealing through rate hikes and delivery slowdowns.
Referring to Postmaster General DeJoy’s Delivering for America plan, today’s press release states that, “with full implementation, the Postal Service’s 10-year plan aims to reverse a projected $160 billion in losses over the next 10 years.”
However, the USPS recently said it expects record profitability within 2 years (by early 2024).
The full announcement is available on the USPS website.