Postal Service Eliminates Deepest Presort Discounts for Package Consolidators

Since the creation of a Grand Alliance to Save Our Public Postal Service, the Alliance and our allies have opposed postal privatization in all its forms. One form of privatization that had largely gone unnoticed by the public is the Postal Service’s long-standing reliance on the “presort discount system.” That system effectively allowed large sections of the Postal Service’s transportation and processing work to be performed by private-sector companies for private profit, with the Postal Service accepting mail and packages “downstream” for last-mile delivery.

This system incentivized private sector consolidators to aggregate mail and packages from many shippers into larger drop-offs into the postal network. They would bypass all or most of the postal processing network and rely on the Postal Service for last-mile delivery.

In September, the Postal Service announced it was eliminating the deepest presort discounts that many package consolidators used (or abused) before turning their packages over to the USPS. The USPS estimates that as many as two billion packages enter the mailstream each year after being processed and transported by consolidators, which is roughly 25 percent of the Postal Service’s total package volume.

By ending the presort discount for package consolidators, it is likely that much of that package volume will be returned to the USPS for end-to-end acceptance, transportation, processing, and delivery, which would increase the Postal Service’s overall revenue for shipping products. For too long, mail and package consolidators have relied on low-wage workers, and the steep discounts offered by the USPS to turn a profit from work that postal workers can rightly perform.

The end of the discount program is shaking up the postal industry, with FedEx poised to eliminate its FedEx SmartPost product. Pitney Bowes has fi led for bankruptcy for its ecommerce division, and other package consolidators are likely to feel the impact soon.

Supporters of a Grand Alliance to Save our Public Postal Service should welcome the change as an opportunity for the public Postal Service to claw back more of the work that the Postal Service was created to do, serving 167 million addresses, six days a week, with a commitment to quality, public service to the entire country.

Upcoming Fight to Preserve Service Standards

As this edition of The American Postal Worker was going to press, the Postal Service had just submitted before the Postal Regulatory Commission its proposals to once again change service standards. As we did in the 2021 service standards case, A Grand Alliance (AGA) will once again organize community resistance to the Postal Service’s proposal to slow down the mail. While this year’s proposal appears to be more complicated than the 2021 case, postal workers and AGA allies should stay alert for opportunities to promote the quality mail service that we are promised under the law. The proposal from the USPS appears to lengthen the delivery time for First-Class mail based on how far the destination address is located from a sorting facility; this is likely to have an outsized impact on customers in rural America. Readers should stay tuned to the APWU website and AGA channels for more information. We will analyze the Postal Service’s proposal in the weeks ahead, plan our response, and engage with postal workers and our allies to promote our vision for robust, quality postal services. ■