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Postal service allocating $ 40 billion to increase market share in the package market

Postmaster General Louis Dejoy told Congress on Thursday that the United States Postal Service would need to make significant changes to survive.

Testifying in front of the House Expenditure Committee, Dejoy provided insights into his agency’s 10-year operational strategy, saying he would be officially announced in the coming weeks.

“This plan is about our commitment to outstanding service at an affordable price, 6 and 7 days a week,” he said. “There are some big numbers to invest in the organization and workforce, approach $ 40 billion and drive innovation for growth.”

As in the case of previous parliamentary hearings that Dejoy was called to testify over the past few months, lawmakers (mainly Democrats) badged him: Service is reduced during the pandemicThe issue of ballot delivery for elections last fall and the ongoing delivery of top-notch mail in certain parts of the country. But they were also keen on the details of the agency’s operational strategy.

“Everyone knows that the decline in email volume (more than 40%) that has occurred in the last decade is projected to decline by another 35-40% over the next decade,” DeJoy claimed. .. At the same time, he said, the post office delivers only about 35% of the country’s parcel delivery volume, much of which is processed by the private carrier FedEx. [NYSE: FDX] And UPS [NYSE: UPS].. In contrast to email, the volume of packages is expected to double in the next 6-7 years. As a result, he said, “We need to reorganize ourselves. This is part of what this plan does to deal with the market.”

Some of this includes investments in larger packaging facilities and new packaging equipment. But that also includes changes in service standards, Dejoy said.

“Current service standards have not been met in the last 7-8 years,” he said. “In our current environment, we can’t achieve them. Without a plane, we can’t get from California to New York in three days, and we don’t own a plane.”

Republican Rep. David Joyce was concerned about where local packaging services fit into the postal service operating plan. This includes some form of integration.

“This board and this management are committed to maintaining service to the American countryside,” said Dejoy. “When we develop our plans, we find that most of this is to achieve financial sustainability, increase income and become self-reliant,” this is part of Congress’s mission.

However, Japan Post’s self-sustaining business model also relies heavily on legislation that frees government agencies from current requirements in parliament. Medical care for retirees before funding Dejoy has said this for 75 years. The bill seems to have bipartisan support.

“We need to make significant adjustments to how our networks operate. The pandemic and service impacts of the last few months are what would happen if we didn’t make any changes.”

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Postal service allocating $ 40 billion to increase market share in the package market Postal service allocating $ 40 billion to increase market share in the package market

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