USPS offers ‘little convincing evidence’ its reform plans will succeed, regulator says

Watchdog suggests Louis DeJoy’s overhaul initiatives are destined for failure without significant changes.

February 3, 2025

Eric Katz

Senior Correspondent

The U.S. Postal Service’s plan to reform its operations and fix its finances is defective, overly optimistic and will severely damage its performance, a regulator with oversight of the agency found in a new review. 

The negative impacts of Postmaster General Louis DeJoy’s Delivering for America plan have been felt since it was first implemented in 2021, the Postal Regulatory Commission said in an advisory opinion, and years later is still not ready for implementation. USPS is likely to realize little benefit from the proposals, PRC said, while worsening service and negatively impacting certain mail products and communities. DeJoy and postal management have repeatedly said all of his steps to overhaul the Postal Service are necessary for the survival of the agency and anyone standing in his way would hasten its demise. 

“The commission urges the Postal Service to reconsider whether the speculative, meager gains from this proposal outweigh the certain downgrade in service for a significant portion of the nation,” PRC wrote. 

The commission, whose opinion is non-binding but was being closely watched by lawmakers in both parties, said it recognizes that USPS is in a difficult position and supports the push for change. It issued its opinion after postal management requested it, which followed criticism from Democrats, Republicans, the USPS inspector general and stakeholders. 

PRC specifically examined two parts of DeJoy’s plan: its Regional Transportation Optimization initiative, which requires mail to sit overnight at post offices instead of being collected each evening for transportation to a processing center, and its processing plant consolidations that will result in the 60 regional processing distribution centers. To accommodate the changes, the Postal Service will deliver some mail more slowly. Together, USPS projected the efforts would save around $4 billion annually. 

The regulators said the Postal Service should better prepare for its RTO initiative, as the plan was rushed, included incomplete information on impacts and lacked regional specificity. The consolidation plan, it added, is unlikely to “create a more efficient network compared to the legacy network.” 

“Other than saying ‘trust us,’ the Postal Service offers little convincing evidence or testimony to reasonably support its claims that its proposed actions will turn out the way it estimates,” PRC said.

The Postal Service failed to provide empirical evidence to support its cost savings claims and even if fully realized would reduce its annual operating costs by just 4%. Those savings are “not likely to significantly improve the Postal Service’s financial condition,” the commission said. 

The regulators added that postal management is underselling the impact of its changes and estimated that half of all ZIP Codes will have downgraded service for regular, First-Class mail. They added that in places USPS has implemented its plans to date, most notably in Richmond, Virginia, and Atlanta, performance declined precipitously. 

“In considering the Postal Service’s claims that service performance and reliability will improve as a result of its proposed changes, the commission is concerned that the opposite may occur,” the watchdog said. 

PRC added USPS was glossing over how much more significantly rural communities would feel the impacts of the changes. Some populations will not receive First-Class mail pieces for six or more days, it said. Those impacts may render the reforms in violation of the law, the commission added. 

David Walton, a USPS spokesman, said the agency was reviewing the advisory opinion and did not yet have any further comment. DeJoy previously promised to lawmakers he would take the PRC’s opinion seriously and tweak his plan as he saw fit. PRC made more than three-dozen recommendations for updating DeJoy’s reforms. 

DeJoy vehemently defended his efforts during hearings last month and said anyone standing in his way would bring about the end of the Postal Service. Sen. Josh Hawley, R-Mo., pledged to “go to the mat” on the issue and work with everyone on the committee to sink DeJoy’s plan.

“I hate this plan and I’m going to do everything I can to kill it,” Hawley said.

Postal management also recently announced lower on-time delivery targets for 2025, with USPS now saying, for example, it expects to deliver regular cards and letters slated for two-day delivery on time just 87% of the time in fiscal 2025 compared to its goal of 93% in fiscal 2024. For mail scheduled to be delivered in three-to-five days, USPS now hopes to deliver 80% on time compared to 90% in fiscal 2024.