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Postal Service reduces air freight by 90% over 2 years as part of cost-cutting efforts

WASHINGTON (AP) — The U.S. Postal Service has reduced air shipments by 90% in two years, putting the service on track to save $1 billion in annual transportation costs, U.S. Postmaster General Louis DeJoy said Tuesday.

Shifting packages and envelopes from air freight to ground transportation was part of DeJoy’s larger plan to improve the mail’s financial health.

More than 95% of first-class mail and 95% of first-class packages currently go through the postal service’s ground transportation system, he said.

It’s part of DeJoy’s broader effort to reduce operating costs, increase parcel revenues and ensure on-time deliveries, along with adjusting shipping costs to reduce inflation and expand delivery points over the next 17 months. expand.

Those efforts will need to continue after the Post on Tuesday reported an expected $6 billion in unplanned costs this year due to inflation, unexpected retirement costs and other factors, it told the Board of Directors.

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“We continue to manage costs that we have under control, for example by reducing work hours by 6 million hours compared to the same quarter last year and by focusing on transportation and other operating costs,” said Chief Financial Officer Joseph Corbett.

DeJoy also reported that the Postal Service opened its first regional distribution center in Richmond, Virginia and plans to open nine more regional centers, 27 local processing centers, and 60 additional sorting and delivery centers.

That marks the beginning of eradicating more than $20 billion in deferred maintenance and preparing the postal service for the next 30 years, he said.

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