First-class mail in for slowdown

WASHINGTON - Facing bankruptcy, the U.S. Postal Service is pushing ahead with unprecedented cuts to first-class mail service in the spring that will slow delivery and, for the first time in 40 years, eliminate the chance for stamped letters to arrive the next day.

The estimated $3 billion in reductions, to be announced in detail Monday, are part of a wide-ranging effort by the Postal Service to trim costs quickly, as it sees no immediate help from Congress.

The changes would provide short-term relief but could push more of America's business onto the Internet. The changes could slow everything from billing statements and checks to Netflix's DVDs-by-mail, add costs to mail-order prescription drugs, and threaten newspapers and time-sensitive magazines delivered by a postal carrier to far-flung suburban and rural communities.

"It's a potentially major change, but I don't think consumers are focused on it, and it won't register until the service goes away," said Jim Corridore, analyst with S&P Capital IQ, who tracks the shipping industry.

The cuts, now being made final, would close about 250 of the nearly 500 mail-processing centers across the country as soon as March. Because the consolidations typically would lengthen the distance mail travels from post office to processing center, the agency also would lower delivery standards for first-class mail that have been in place since 1971.

Currently, first-class mail is supposed to be delivered to homes and businesses within the continental United States in one to three days. That standard will increase to two to three days. Periodicals could take from two to nine days.

About 42 percent of first-class mail is now delivered the following day. An additional 27 percent arrives in two days, about 31 percent in three days, and less than 1 percent in four to five days. After the change in the spring, about 51 percent of all first-class mail is expected to arrive in two days, with most of the remainder delivered in three days.

The consolidation of mail-processing centers is in addition to the planned closing of about 3,700 post offices.

Postmaster General Patrick Donahoe said in an interview that the agency had to act while waiting for Congress to grant it authority to reduce delivery to five days a week, raise stamp prices, and cut health-care and other labor costs.

The Postal Service, an independent agency of government, does not receive tax money, but it is subject to congressional control on large aspects of its operations. The changes in first-class mail delivery can be made without permission from Congress.

After five years in the red, the post office faces imminent default this month on a $5.5 billion annual payment to the Treasury for retiree health benefits.

Separate bills that have passed House and Senate committees would give the Postal Service more authority and liquidity to stave off immediate bankruptcy. But prospects are somewhat dim for final congressional action on those bills anytime soon, especially if the measures are seen in an election year as promoting layoffs and cuts to neighborhood post offices.