postal service business plan

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What’s in Louis DeJoy’s 10-year plan for the USPS

Here are eight charts that help explain what’s in store for the postal service.

Postmaster General Louis DeJoy released his strategic vision for the U.S. Postal Service on Tuesday, an austerity plan designed to save the agency $160 billion over the next decade and position the agency more squarely in the package business.

The blueprint would cut post office hours, lengthen delivery timetables and raise prices, among other measures, and is being pushed forward even as congressional Democrats have clamored for the removal of DeJoy and the agency’s governing board amid step declines in delivery performance. It also comes as President Biden’s three board nominees await their confirmation votes. If they win Senate approval, Democrats and Biden appointees would have the votes to remove DeJoy, if desired.

Here’s a breakdown of DeJoy’s proposals. Read more about the plan here, and read the full plan, “Delivering for America,” here.

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Strategic planning

Introduction.

The Office of Strategic Planning supports the Postmaster General and senior management in assessing the future of the Postal Service™.

The following links contain the Delivering for America strategic plan, Annual Report to Congress and archived publications.

Delivering for America

Our Vision and Ten-Year Plan to Achieve Financial Sustainability and Service Excellence. Learn more

Area Mail Processing

The U.S. Postal Service ® is continually improving its efficiency by making better use of space, staffing, equipment, and transportation in processing the nation's mail.

Featured sections

Postal Act of 2006

The first major legislative change to the Postal Service since 1971.

Universal Postal Service

Report on Universal Postal Service and the Postal Monopoly.

Innovations

We collect and review your ideas on ways we can improve our products and services.

Other current initiatives

Publications

Delivering for America: Our vision and 10-year plan to achieve service excellence and financial stability
Annual Report to Congress FY 2023

Please visit the archive to access older strategic planning publications.

About the Office of Strategic Planning

Strategic Planning reports to the chief financial officer, and is responsible for managing a world-class strategy function that includes implementing cross-functional initiatives that support organization-wide growth targets designed to improve net income and revenue.

The office supports the Executive Leadership Team in developing long-term strategies and priorities. It tracks progress on strategic initiatives, develops strategic reports and assists in sharing results with postal stakeholders and the general public. It also develops the USPS five-year strategic plan.

Strategic Management Office

The Strategic Management Office assists senior management in identifying, developing, and implementing strategic initiatives. The office uses a structured process that ensures strategic initiatives are supported by rigorously tested data, aligned with corporate priorities, include appropriate cross-functional involvement, and deliver results. It facilitates regular review of strategic initiatives by the Executive Leadership Team to evaluate progress and resolve issues.

Strategic Business Planning

The Strategic Business Planning (SBP) team tracks external trends that may impact the Postal Service in the future and works closely with functional experts to focus on long-term economic and demographic trends, changing technologies and business practices and market developments.

SBP develops the USPS five-year strategic plan, the annual performance plan, the Comprehensive Statement on Postal Operations and the annual performance report, helping the organization align initiatives with strategic goals, enhancing the long-term positioning of the Postal Service by identifying and developing new initiatives and strategic alliances.

The office supports senior USPS leadership by managing comprehensive organizational reviews against NPA and non-NPA metrics on a monthly basis.

If interested in this type of work, email your resume to [email protected] .

White Papers

The Value of the Postal Service’s Retail Network for Small Businesses

The small business segment in the U.S. is growing and has a strong potential to generate more revenue for the Postal Service.
Consumer expectations are changing, including demands for faster shipping. For small businesses to compete with larger competitors, they need help with speedy and efficient logistics and fulfillment.
Additional services and further outreach to small businesses at post offices can position the Postal Service for continued success serving this segment.
The Postal Service’s Delivering for America 10-year plan, released in March 2021, acknowledges the need to improve how the retail network serves small businesses.

Small businesses are an important segment of the Postal Service’s customer base and comprise an overwhelming majority of all businesses in the U.S. The number of small businesses has been growing, especially since the onset of the COVID-19 pandemic. With post offices conveniently located in every community in the country, offering a bevy of affordable mailing and shipping products and services, the Postal Service is uniquely positioned to be the choice of small businesses.

In this white paper, the OIG sought to identify the products, services, and outreach offered to small businesses through the Postal Service’s retail network of post offices and assess how the small business community perceives these offerings. Additionally, this paper offers some ideas for new retail products and services that could meet the emerging needs of small businesses.

For example, USPS could help them address evolving consumer expectations for fast delivery and provide convenient return options. This could entail solutions, such as e-commerce fulfillment, that enable prompt and easy delivery to local customers. Providing additional services at post offices, such as small business consulting and enhanced self-service options, could make the retail network more valuable to small business customers. The agency could also standardize its small businesses marketing across the retail network, more proactively reach out to local small business organizations, and collect stronger data on its small business customers.

Tristan Dreisbach, David Neu, David Garcia, and Paola Piscioneri contributed to this report.

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Breaking News

USPS HQ Announces New Business Plan

August 7, 2020

Today, August 7, 2020, the Postal Service notified NAPS Headquarters that a new USPS business plan has been approved by the USPS Board of Governors (BOG). The first part of the new plan involves a realignment of the USPS area organizational structure to focus on three business lines, involving retail and delivery, logistics and processing and commerce. As reported in USPS announcements (attached), “ … [T]hese organizational changes do not initiate a reduction-in-force, and there are no immediate employee impacts.” Also attached is the new USPS organizational chart.

Over the past several weeks, NAPS Headquarters has closely monitored changes in Postal Service operational approaches and surrounding developments. At our last USPS-NAPS consultative session on July 27, 2020, USPS noted that these operational changes were not subject to USPS-NAPS consultation because they fell within the scope of existing policies and rules, even if outside the norm of past practice. That perspective may not necessarily apply to future practices, as NAPS receives additional information from USPS on the business plan and realignment consequences. NAPS intends to fully exercise all available consultation rights on all appropriate matters.

We will continue to keep our membership fully advised on these developments and to make available our resources and assistance to our members. For example, in the deployment of cost-cutting strategies, where EAS employees become subject to debt determination letters for the cost of extra trips or unauthorized overtime, the services of the NAPS Disciplinary Defense Fund (DDF) will be available for members subject to false charges of extra trip or overtime fees. Similarly, the DDF will remain available to represent members subject to disciplinary charges for following proper instructions leading to the delay of mail, missed deliveries, or other grounds.

As the USPS implements the new business plan, it is important that members follow all proper instructions, verbal or written. When NAPS members receive verbal instructions outside postal policies or guidelines, they should follow-up with an email to their manager or higher-level leadership to request clarification. Furthermore, if a member is unsure of an order, be sure to review ELM 665.15 Obedience to Orders, which states; If an employee has reason to question the propriety of a supervisor's order, the individual must nevertheless carry out the order and may immediately file a protest in writing to the official in charge of the installation or may appeal through official channels.

NAPS is committed to the success of the Postal Service. We are also committed to our members’ success and protecting their livelihoods and rights in the workplace. To that end, NAPS will consult in good faith with the USPS and provide postal leadership with input to achieve success for both parties.

As more information becomes available on the USPS business plan and its impact, NAPS will provide timely and relevant updates.

See here for more information.

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Direct Mail and Shipping Business Plan

Start your own direct mail and shipping business plan

The Shipping Centre

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

The Shipping Centre is a full service shipping, fax transmittal, and private Mail Box company. It is an Oregon corporation, privately held and lead by Steve Freighter. The current package shipping center business has a lot of competition. The competition acts like their services are a commodity, just simple shipping services.

The Shipping Centre will gain market share through the use of their two competitive advantages, customer service and convenience. Because the industry is turning commodity-like, having superior customer service is one important way of achieving differentiation. The other advantage is convenience. The Shipping Centre is open beyond the standard business hours, offering a true convenience to full-time working customers, the type of customer that is typical for The Shipping Centre.

The Shipping Centre is able to have slightly lower service charges on shipping packages and better margins then the competition through the use of innovative software that creates significant efficiencies in work flow. This innovative work flow efficiency, coupled with the competitive advantages will allow The Shipping Centre to gain market share.

The Shipping Centre is scheduled to reach profitability by month 12 and by year three will have earned a modest profit that year.

Direct mail and shipping business plan, executive summary chart image

1.1 Objectives

The objectives for the first three years of operation include:

To create a service-based company whose primary goal is to exceed customers’ expectations.
To increase the number of transactions served by 20% per year through superior performance.
To develop a sustainable service-based company, surviving off its own cash flow.

1.2 Mission

The Shipping Centre’s mission is to provide the customer with whatever type of shipping needs they may have. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

The Shipping Centre, soon to be located in Salem, OR will be a full service shipping agency. Services will include USPS and UPS shipping, packaging of items, international shipments, and private Mail Boxes.

2.1 Company Ownership

The Shipping Centre is an Oregon Corporation, founded and owned by Steve Freighter.

2.2 Start-up Summary

The Shipping Centre start-up costs include:

Legal fees–for the formation of the corporation and general business issues.
Office equipment–includes tables, desks, file cabinets, tape dispensers, rulers, scissors, etc.
Two computer systems with DSL, and CD-RW.
Special software for work flow efficiencies.
Advertising in the local newspaper.
Signs for the front of the store.
Mail Box set-up.

The items that will be considered long-term assets (for depreciation purposes) are:

Office equipment.

Direct mail and shipping business plan, company summary chart image

The Shipping Centre will provide full service shipping type services. Our main services will be:

Fax service.

Market Analysis Summary how to do a market analysis for your business plan.">

The Shipping Centre has three main customer groups: shipping customers, Mail Box customers, and fax customers.

4.1 Market Segmentation

The Shipping Centre’s customers can be broken down into three main groups:

Shipping customers . The shipping customers can be further broken down into customers who have packages ready for shipment, and those that require a packaging service. The typical customer that needs a package shipped is someone who does not have access to ship packages at work and the Post Office is not convenient, or they need to ship via UPS. The other subgroup requires items to be packaged for them. The items are typically unusually sized, or may be quite fragile and they want an expert to package it to absolve them from liability.
Mail Box customers . These customers are in need of a private Mail Box for a multitude of reasons including: convenience of location, cost, hours of operation, legality issues, etc.
Fax customers . These customers are in need of a fax transmittal service, either to send or receive a fax and do not otherwise have access to a fax machine.

Direct mail and shipping business plan, market analysis summary chart image

4.2 Target Market Segment Strategy

The Shipping Centre is targeting these customers because they represent a growing portion of the population.

Shipping customers . This segment of the population has grown steadily in the last few years in large part due to the Internet. When a customer purchases a product over the Internet and they need to return it for whatever reason, the easiest solution is to drop it off at a store like The Shipping Centre. Another growing segment of these customers is eBay sellers who are shipping out the goods that they are selling. Shipping customers are also mail-order customers who have an item to return back to the catalog company. Lastly, there are people sending packages to whomever. They are typically enticed by a shipping option that is fast and convenient, two things that do not describe the Post Office or a regional UPS shipping center as. Additionally, there are the customers who are in need of packaging for an item. Americans are working increasingly longer hours, and people do not have the time to package things up, this is especially true for weird shaped items or fragile merchandise. To do it right, these things take time–and time is a luxury that people are increasingly unwilling to devote toward packaging, they would rather pay someone to do this.
Mail Box customers . This is a segment of customers that is not increasing in significant amounts (although eBay transactions have boosted use in this area), but there are customers that require Mail Boxes and it does not take up much space to offer the service.
Fax customers . This segment has a steady demand for fax transmittal services. Although many thought the use of email would reduce the number of transmittals done via the fax, oddly, this has not happened yet.

4.3 Service Business Analysis

Currently there are several different companies that offer a similar service offering to The Shipping Centre. They are typically located in high traffic areas. They provide Mail Box service as well as fax and shipping. These different companies offer a commodity-like service. People tend to make choices based on convenience. Market research indicates that consumers perceive little difference between competitors, and there is little loyalty that customers display toward a specific store other than convenience.

Strategy and Implementation Summary

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5.1 Competitive Edge

The Shipping Centre’s competitive edge will be based on two factors, customer service and convenience.

Customer Service . The Shipping Centre will offer exemplary customer service that will stand out in the otherwise commodity like delivery of services in this business space. The competitors customer service is acceptable, they are generally helpful and nice, but you do not leave the store with an overwhelming feeling that you as the customer, were worshipped. This will change with The Shipping Centre’s customer service. After visiting The Shipping Centre you will leave with an overwhelming feeling of how superior customer service treatment was. When you leave The Shipping Centre with that feeling, that will stick in your head and will be effective in differentiating The Shipping Centre from its competitors.
Convenience . Most of the competition has normal business hours. While this works for some people, our market research indicates that people are using these services because they work during the day and they are in need of a quick and easy solution. By offering extended business hours, The Shipping Centre becomes immediately more convenient, by allowing working individuals to service their shipping etc. needs after work hours.

5.2 Sales Strategy

The Shipping Centre’s sales strategy will be based on work flow efficiencies and superior customer service.

Work flow efficiencies . Typically when competitors send a package using either UPS or USPS, they enter the information into software from the specific shipping vendor (i.e. UPS). Once the information is entered into the UPS software, the software generates the shipping tag and corresponding price. The customer pays the amount and leaves. Now the employee must enter all this information into their computer software to track the transaction. Handling the transaction twice is inefficient. The Shipping Centre can offer slighty better prices and margins by making this process more efficient. This will be done with special software that takes the information from the UPS and USPS software and automatically transfers it into the back-end software that The Shipping Centre uses. This will cut time spent on tracking transactions in half and improve accuracy as the number of times the information is entered increases, there is an increase in the likelihood of errors.
Superior customer service . This will help boost sales as people become accustomed to The Shipping Centre’s level of service and become a return customer, developing a long-term mutually beneficial relationship. Typically people that send packages do so with some frequency. If they buy things over the Internet or by phone, they do not do so on isolated occasion, they do so with some regularity. With this in mind, The Shipping Centre’s customer service will turn them into regular customers.

5.2.1 Sales Forecast

The first month will be spent setting up the business. There will not be any sales activity during this time period. By the second month the store will be open to customers and they will begin to trickle in. It will not be until months four and five that there becomes a steady stream of customers.

For the shipping and fax service The Shipping Centre expects a steady increase in business. For the Mail Boxes, there will be a steady increase until the boxes are near full utilization and then there will be a plateau of sales activity from the boxes.

Direct mail and shipping business plan, strategy and implementation summary chart image

5.3 Milestones

The Shipping Centre will have several milestones early on.

Business plan completion.
Completion of the storefront/back office.
Completion of software.
Revenues growing steadily, yearly.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Steve Freighter is the founder and owner of The Shipping Centre, an Oregon Corporation. Steve is forming The Shipping Centre as a corporation to eliminate any personal liability issues. Steve has a degree in political science from Oregon State University. While at OSU, Steve worked part time at UPS as a driver. This part-time job gave Steve valuable insight into the shipping business.

While at OSU, Steve took a business consulting course and Steve’s semester project was to do a full business consultation for a company of his choice. Recognizing that he would like to have his own company some day, he studied a company called Mailboxes Etc. From this project, Steve got valuable insight into the business.

The main conclusion that Steve presented to the company was that the services provided were too commodity like and the business space was quite competitive. He suggested some sort of meaningful differentiation. The company ultimately did not heed Steve’s advice, partly because of ties with the corporate parent, partly because of cost issues, their margins were not enough to be able to institute the changes Steve suggested. Steve has walked away from this project with the insight and industry knowledge needed to allow his store to succeed.

These experiences as a whole, provide Steve with a wealth of practical and analytical knowledge needed to nurture The Shipping Centre into a profit making venture.

6.1 Personnel Plan

The staff will consist of Steve working full time for The Shipping Centre. In addition, by month two Steve will be bringing on a part-time employee. That employee will be turned into full time by month three and Steve will bring on board a second full-time employee by the fourth month. By month seven Steve will bring on board a third part-time employee.

Financial Plan investor-ready personnel plan .">

The following sections will outline important financial information.

7.1 Important Assumptions

The following table highlights important assumptions.

7.2 Break-even Analysis

The Break-even Analysis indicates what The Shipping Centre must achieve in monthly sales to break even.

Direct mail and shipping business plan, financial plan chart image

7.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

7.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

7.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

7.6 Business Ratios

The following table compares the standard business ratios for the Private Mail Centers industry, NAICS code 561431 against the ratios calculated for the financial forecasts of this plan.

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DeJoy says USPS needs to get ‘better faster’ under reform plan, or risk running out of cash

Pouring over presentation slides in a conference room at USPS headquarters, DeJoy goes into detail about the investments USPS is making to exponentially increas...

The future of the Postal Service depends on packages, according to its Postmaster General Louis DeJoy — a lot of them.

A key tenet of his 10-year Delivering for America Plan , now in its third year, is to capture a bigger piece of the package business from private-sector companies like UPS, FedEx and Amazon.

Pouring over presentation slides in a conference room at USPS headquarters, DeJoy goes into detail about the investments USPS is making to exponentially increase its capacity to process and ship packages.

It’s a safe bet, DeJoy says, since USPS goes where its competitors don’t — to more than 165 million addresses, at least six days a week. Letter carriers are going there anyway, so why not fill the empty space on their trucks with packages that will help the agency pay its bills?

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But the stakes of this bet are nothing less than the ability of USPS to keep its lights on, the same way it has for more than 50 years.

“Our competitors are reacting to us out there, and we will get better faster,” DeJoy told Federal News Network in a recent interview. “I’m very confident in that — that we’ll get better faster. My issue right now is to get it done fast enough, before we run out of cash.”

USPS, according to the most recent Treasury Department data , had $17.4 billion cash on hand at end of January.

To recover from its long-term financial challenges, DeJoy told congressional leaders last month that USPS is looking to cut $5 billion from its operating costs and grow its revenue by the same amount over the next two years to overcome its long-term financial challenges.

DeJoy said USPS hopes to reach that goal, in part, by delivering more packages and reducing the cost of delivering them. All of this, he adds, is about cracking down on inefficient practices at an agency that has been slow to evolve with the age of e-commerce.

“We have administratively begun to bear down on wasteful practices,” DeJoy said. You don’t want empty trucks all over the place. You don’t fly stuff that you can get there by ground.”

USPS, so far, has saved about $1 billion annually by shifting more than 85% of mail and package volume that it used to pay contractors to fly across the country. Now the agency delivers that volume on its ground transportation network of trucks.

Even with this plan in place, USPS faces an uphill battle to dig out from more than 15 years of net losses. It ended fiscal 2023 with a $6.5 billion net loss, and expects to end this year with a similar net loss — falling short of its break-even goal.

Growing the package business

USPS is making $40 billion in capital investments under its reform plan. Much of the investment is going into its network of facilities that account for $20 billion in deferred maintenance.

Zooming in on a Sorting and Delivery Center (S&DC) in Atlanta, DeJoy says the plant’s biggest package sorting machine, prior to the reform plan’s investments, could handle 6,000-8,000 packages in an hour, at a maximum.

“And it would struggle. It was smoking,” he said.

With recent upgrades, DeJoy said that package sorting machines at the Atlanta facility can now process 60,000 packages an hour.

The agency is operating at a different pace than when he took office in the summer of 2020.

USPS during his tenure has purchased close to 450 package sorting machines as part of its capital improvements. Before his arrival, DeJoy said USPS was handling 25 million packages a day, by hand.

DeJoy says he’s confident increased capacity will translate into more volume. USPS, he adds, only accounts for 5% of the “middle market” package business, and that the agency must compete for a bigger piece of the pie.

“That’s embarrassing for the United States Postal Service. We need to get more of the middle market, and we’re going to do it,” he said.

Part of the problem, according to DeJoy, is that USPS has institutional expertise delivering mail and “flats” such as magazines, newspapers and catalogs, but doesn’t yet have the same operational precision when it comes to package delivery.

“When you look at mail processing, the Postal Service is awesome,” he said. “It moves. You go look at how we do packages, we’re in five different buildings at the same time. We’re doing it because we never geared up to do it the right way.”

USPS, he told the Board of Governors last week, is planning to roll out same-day and next-day shipping offerings “in the near future that will change the way you look at delivery and the way you look at the United States Postal Service.”

“We’re an organization of the people, for the people. We didn’t have products for the small businessperson. We didn’t have products for the medium businessperson. Now we’re going to start having it, as a growth area. We’re going to go after it,” DeJoy said.

While USPS sees growth opportunities for its package business, the agency expects declines in mail volume will continue.

DeJoy, in a December 2023 letter, told lawmakers total mail volume fell by 42% between 2007 and 2020. Total mail revenue during that same period fell from $60.6 billion in 2007 to $38.7 in 2020 —a 36% drop.

“We think we’re a mail monopoly, right? We’re not. We’ve got $39-40 billion worth of mail that costs us $60-70 billion to deliver,” he said in the interview That’s not a monopoly, that’s an obligation.”

Eliminating ‘waste’ in the USPS network

To grow its revenue and reduce its operating costs, DeJoy said USPS is managing the biggest shakeup of its delivery network in the agency’s history.

That network modernization, once finalized, will bring mail and packages through 60 regional processing and distribution centers, 190 Local Processing Centers, 600 Sorting and Delivery Centers and 15,000 “delivery units,” mostly post offices.

“This is by no means a consolidation of good stuff. This is a rearrangement of the furniture. I imagine we’ll come out with more square footage deployed around the nation than before we started. It’s just not going to be wasteful square footage,” DeJoy said. “I’m talking about waste, and handling things 17 times, instead of handling it once or twice — because it’s doable. That’s what the other guys do. We have to cover a lot of infrastructure. That drives a lot of our cost, the plant is the footprint that we have. So, I don’t see that changing, really.”

Looking ahead, DeJoy said USPS is looking to open Sorting & Delivery Centers across the country later this year. S&DCs are large facilities that consolidate the operations of letter carriers and mail handlers under one roof.

DeJoy says the new facilities are an upgrade for USPS employees who previously worked in old, dark facilities that were a drain on workforce morale.

While lawmakers and postal unions remain wary of the network shakeup, DeJoy said the upshot of this transformation is that some employees moving into S&DCs may see a longer commute.

“If there’s an uncomfortable expectation, it’s that. And how uncomfortable is that — you’ve got to go an extra 30 minutes to go to work? We have to get new plants, we have to improve our plants, we have to align our work, so we can move it efficiently,” DeJoy said.

He added: “When you say cost-cutting, I don’t even think of it that way. Because I’m looking at us trying to operate better. We’re still not making our service standards, and I know we can. So if we get our throughput up in a facility, and get our trucks to run on time, there’s a big chance that we can take a day’s work out of everything. Well, that adds up, and it doesn’t mean you’re changing people and stuff like that.”

‘More volume with the same people’

USPS in the first quarter of FY 2024 delivered a higher volume of packages while cutting 8 million work hours — one of the agency’s largest quarterly reductions in work hours in the last decade.

DeJoy said that translates into getting more productivity out of the workforce it already has — and relying more on its career workforce.

“[It’s] more volume with the same people,” DeJoy said. “That’s the positive thing about me. It’s about growing the organization and doing things right. I’ve got other things to do — I didn’t come here to cut people, it’s just ludicrous. There are days I feel like I’m in the Twilight Zone with some of the stuff I hear.”

If there’s anywhere to cut labor costs, DeJoy says it’s reducing workers’ compensation when employees get hurt on the job and overtime.

“I’m here like, ‘Hey everybody, let’s just get better, because we have to compete with the other guys. We’ve got a bazillion hours of overtime. Let’s do it with half a bazillion,” DeJoy said.

DeJoy told the USPS Board of Governors that the agency during the peak season “took necessary operating risks to deliver an increased volume while incurring less costs,” such as minimizing peak season staffing.

USPS only hired 10,000 seasonal employees nationwide for the recent peak season. The agency started to significantly taper its seasonal hiring in 2022, when it brought 20,000 temporary hires on board. Only a few years ago, USPS would hire up to 40,000 temporary employees for its peak season.

“Who did that effect that was working here? Nobody. Actually, it probably made their day a little better, because we didn’t have a whole bunch of new people running into plans that didn’t know what they were doing and so forth.”

The agency, however, grew its career workforce to 529,000 employees in December 2023. That’s an increase of 11,500 employees, a more than 2% growth in its career ranks, compared to 2022.

Since January 2021, USPS has converted 150,000 employees from pre-career to career status, with better wages and benefits. The agency sees a much lower rate of turnover for its career workforce.

USPS is trying to rein in turnover among its pre-career workforce, but even in a best-case scenario, DeJoy estimates pre-career turnover will still hover around 20%.

‘Half-bat, half-geese’

Among the slide decks he’s shown in meetings, DeJoy has presented mailing industry partners and lawmakers with a couple of analogies for the direction USPS is going.

When he started as postmaster general, DeJoy has said USPS functioned like a group of bats, flying erratically. The goal — and the vision for USPS — is to have the agency working in sync, moving in the same direction, like a flock of geese, flying in a “V” pattern.

“Right now, we’re half-bat, half-geese,” DeJoy said. “The way I look at it, half of us are flying in a V formation. It’s not that people are working against us internally — there’s nobody working against us. It’s trying to get people to work in a different way, and see things in a different way.”

“It’s taken a number of years and constant evolution,” but DeJoy said the USPS Board of Governors and its executive leadership team understand what it’ll take USPS to get back on track with its break-even goal.

The alternative, he said, USPS going from a self-funded agency to one that depends on Congress for appropriations, as it did as the pre-1970 U.S. Post Office, is not an option.

“If I had a never-ending funding mechanism, like a lot of other agencies do, I might act differently. If I was a policy shop, I might act differently. I’m not —I’ve got to deliver mail and packages. That’s it — cost-effectively. I’ve got to earn my own money,” DeJoy said.

With all the moving pieces of the USPS overhaul, DeJoy concedes not everything in the 10-year plan goes according to plan. Mistakes happen, he says, but they’re addressed and corrected quickly.

DeJoy says moving fast and making changes, even with the occasional setback, is better than the “status quo” of an agency that loses money.

“The historical approach that relied solely on cost-cutting and managing decline proved penny-wise and pound-foolish,” DeJoy told congressional leaders in a letter at the end of last year.

USPS last quarter insourced its logistics work from third-party contractors at several Surface Transfer Centers. DeJoy said that brought 1,000 jobs into USPS that it previously contracted out, but not without some growing pains.

USPS at the height of its peak season last December had to shut down a Surface Transportation facility for about two weeks in Saint Louis, Missouri, because of a hazardous mercury leak from an illegally shipped package.

USPS delivered 85.9% of first-class mail on time in the first quarter of fiscal 2024.

DeJoy said at the last Board of Governors meeting that 98% of American households are getting their mail and packages within three days, but said “I do realize that individual communities do not view our performance at a national level,” he added, noting some delays at the local and regional level.

“There were mistakes and there were events, and there is positive action, and there are things that could go faster. I don’t run away from that,” DeJoy said. But this is about saving the Postal Service for the next 50, 60, 100 years.

“I’m into us being as self-contained as we possibly can, but we got to do it. We’ve got to do it like the other guys do, he added. “Which is really really good. Or we’ll be really, really gone.”

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Jory Heckman is a reporter at Federal News Network covering U.S. Postal Service, IRS, big data and technology issues.

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USPS sees $2B loss for quarter, but DeJoy says agency’s best days still ‘in the future’

USPS outlines plan to ‘aggressively’ reduce carbon footprint by 2030

USPS plans to cut $5B in costs, grow revenue to avoid running out of cash in coming years

USPS sees $2B loss for quarter, but DeJoy says agency’s best days still ‘in the future’ Agency Oversight
USPS outlines plan to ‘aggressively’ reduce carbon footprint by 2030 Agency Oversight
USPS plans to cut $5B in costs, grow revenue to avoid running out of cash in coming years Management

DeJoy Announces 10-Year Reorganization Of U.S. Postal Service

Brian Naylor

Postmaster General Louis DeJoy, pictured last month on Capitol Hill, has announced a 10-year plan to reorganize the U.S. Postal Service. It has received a mixed reaction. Al Drago/Getty Images hide caption

Postmaster General Louis DeJoy, pictured last month on Capitol Hill, has announced a 10-year plan to reorganize the U.S. Postal Service. It has received a mixed reaction.

Postmaster General Louis DeJoy is calling for longer delivery times for some first-class mail, shorter hours for some post offices and more expensive postal rates — all part of a 10-year reorganization plan for the U.S. Postal Service he unveiled Tuesday.

DeJoy outlined the changes at a news conference with other Postal Service officials.

"This is a very positive vision," DeJoy said. If the Postal Service's long-term financial woes are not addressed, he said, the USPS will "run out of cash and require a government bailout."

Under the plan , "a small percentage" of post offices would have their hours reduced, and "a small percentage" of city stations could be closed.

DeJoy said he "was not in a position right now" to say how much the price of a first-class stamp would rise, but that the service is counting on $44 billion in new pricing authority.

Kristin Seaver, the Postal Service's executive vice president, said the change in delivery times would affect only "the fringes of our network." She said 70% of first-class mail will still be delivered in two or three days under the proposal. Twenty percent of what she identified as coast-to-coast mail "might not arrive for five days."

According to the Postal Service's own standards, first-class mail is expected to be delivered on time 96% of the time, a goal it has not reached for some five years.

In the December holiday rush, the on-time rate plummeted to as low as 38% for some mail, but it has since rebounded to 83% in early March, according to Postal Service statistics.

Consumers have been complaining about delayed birthday cards, bills and prescriptions, and those complaints have reached Congress.

Under Pressure, Postmaster General Calls For Changes To Mail Delivery

DeJoy told a congressional panel last month that the Postal Service lost more than $9 billion last year and owes some $80 billion in unfunded liabilities because of a congressionally imposed mandate that it prepay the health care costs of its future retirees.

DeJoy is working with lawmakers on legislation that would end that requirement and place retirees within the Medicare program.

He told lawmakers the postal system is "in a death spiral" and needs legislation to help restore it to financial stability.

"My message is that the status quo should be acceptable to no one," he said then.

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DeJoy's reorganization plan received a mixed reaction. Sen. Gary Peters, D-Mich., who chairs the Senate committee with oversight of the Postal Service, said in a statement he was "concerned that several of the initiatives in this plan will harm service for folks across the country who rely on the Postal Service for prescription drugs, financial documents, running their small businesses, and more."

"Cuts to service standards for first-class mail, limiting hours at local post offices, and making it more difficult for people to access postal products would adversely impact USPS customers across the nation, including in rural and underserved communities."

The American Postal Workers Union, which represents some 200,000 USPS employees, said the plan "contains both positive attributes as well as some proposals that should be of concern to postal workers and customers."

On the plus side, the union cited the plan's "long overdue proposals for upgrading local post offices and enhancing products and services."

But the union said it had "deep concerns" with other elements of the plan. "Any proposals that would either slow the mail, reduce access to post offices, or further pursue the failed strategy of plant consolidation will need to be addressed," its statement said.

When It Comes To Clean Energy, USPS Delivery Trucks Don't Yet Answer The Mail

The Save the Post Office coalition, a group of labor and progressive organizations, said in a statement, "Asking Louis DeJoy to make a ten year plan for the post office is like asking the fox to build a better henhouse. After his record of destruction, incompetence and self-dealing over the last nine months, the only plans he's qualified to make at this point are his own retirement plans."

President Biden recently announced three nominees to the postal board of governors, which has the authority to replace the postmaster general if it chooses. Biden's nominees include a former lawyer for the American Postal Workers Union, an elections expert and advocate for voting by mail, and a former deputy postmaster general.

It's not clear when the Senate will take up the nominations. Some Democrats have called for Biden to replace all of the board members , each of whom was nominated by former President Donald Trump. DeJoy, a former logistics company executive and major donor to Republicans, including Trump, was made postmaster general last year by the board.

Business Plans Handbook
Business Plans - Volume 05
Franchise Postal Service Business Plan Business Plan

Franchise Postal Service BUSINESS PLAN

EXPRESS POSTAL CENTER

8820 Bellevue St. Anniston, MI 63439

This plan is a good example of a well-chosen franchise. The owners have considered many important factors, such as population growth, demographics, competition, franchise track record, and location. This business is well-positioned in every respect.

EXECUTIVE SUMMARY

Business description.

FINANCIAL FORECAST
SOURCE OF FUNDS SCHEDULE

Express Postal Center (EPC) is an exciting franchise opportunity with a strong potential for growth. EPC is Postal/Shipping center that will bring a wealth of services to the Anniston area. The overwhelming support and guidance offered through a franchise assures us of a strong foothold in the business community.

American businesses are quickly growing in a direction of small offices I home of offices. individuals are utilizing the home office structure, however they have nether the space nor financial resources to fully equip and operate productively. Every day more and more business people are traveling. working out of hotel rooms, etc. This industry provides support services that business people need and have some to rely on in an office atmosphere. To the private consumer, the Center also offers the same quality services as are offered to the business person, as well as enjoying the specialized attention and assistance provided in this one-stop shipping store.

In recent years, many Fortune companies have undergone aggressive down-sizing programs. In doing so, the disbursement of the virtual office has considerable increased the need for services of offered though businesses such as the EPC Centers.

Franchising combines the initiative and dedication of individuals, along with the economies and scale of a national chain. With the current failure rate of new business in the marketplace, the percentage of success stories lies within franchising. As an EPC Franchise Owner, we can enjoy the best of both worlds: We will be part of a cutting-edge industry and be teamed with the most experienced and powerful company in the industry.

Express Postal Center is a service franchise with locations throughout the United States and internationally. There are currently 3,000 centers worldwide. It is an industry leader in providing private postal/shipping, and business communication services.

EPC was founded in 1980, began franchising in 1980, and became a public company in 1986. EPC is traded on NASDAQ. On average EPC opens one new franchise center each business day. They were ranked in the top quartile in the Businesss Gold 100 as of 1994. The future growth patterns have been aggressively set while continuing to maintain a top-rated standard of excellence and providing overwhelmingly good service.

Express Postal Center is five times larger than their nearest competitor and is one of the fastest growing franchise companies in the world. Because of the network size, they can provide overwhelming support and participation in national programs chat ore not a available to independent businesses or other smaller franchise companies.

One of the most important aspects of this Center is the convenience of the one-stop shipping source. While it may be slightly less expensive to go to the local UPS office or Post office, it has been proven that the average individual will spend a little more money for the conveniences provided in one location. Business hours for the Center will be Monday through Friday from a 8:00am to 6:00pm, and Saturday from 9:00am to 5 :00pm with extended hours during the holiday season. These hours will he adjusted as the community dictates a need. People with very busy lives will utilize a full-service postal center rather than make several trips to venous locations, standing in lines, funding parking etc., in order to accomplish the same tasks.

A business person can run their business from the Center. Every business need can be accomplished through the Center. Time is money and the more time a business person can spend doing his/her job efficiently, the more money he/she stands to make.

After looking at many different franchise opportunities, we decided to pursue an EPC franchise for many different reasons. It is a strong, service-oriented business with an extensive support organization backing it. This support is based not only on Corporate but also on the support of all the other stores through state of the art networking. We were also impressed with past growth, future projections, and the overall success rate of the EPCs around the country. All this information was gathered through many phone conversations with different EPC store within Colorado and Michigan. This is overwhelming support from the EPC franchise headquarters and other EPC owners throughout the Country.

The services offered will be promoted through a comprehensive national television advertising program provided through the franchise organization, additional local cable t.v., community newspapers, six local radio stations, two local phone directories, inexpensive circulars circulars with coupons, and visibility of a prime location and signage.

The business venture itself will be organized under a Limited Liability Corporation to incorporate the tax advantages. Possible expansion to m multiple Center locations will be scheduled to take place during year four in The Northern Michigan region. Jack Hall will serve as President of theEPC and Gayle Hall will serve as Vice President. Jack has overt 20 years experience as a Service Engineer for Xerox Corporation, and Gayle has 18 years experience as a Word Processing Manager/Operator.

Initial projections for this EPC indicate that the break even point will be reached between twelve and fifteen months after operations commence, and an adequate cash flow will be maintained thereafter.

The Business venture will be organized as a Limited Liability Corporation. Jack will serve as President of the EPC and Gayle will serve as Vice President. Projected opening date for this store is April 1, 1997. This date was specifically chosen in order to take advantage of advertising programs prior to the highly increased volume of business during the summer tourist season. It also allows for essential and valuable hands-on experience prior to this busy season. This business is not seasonal, but operates on a consistent year-round basis with hectic holiday peaks, such as a retail outlet. There is a slight slow down during the months of February and March, but overall it is consistently busy. Business hours for the Center will be Monday through Friday from 8:00am to 6:00pm, and Saturday from 9:00am to 5:00pm, with extended hours during the holiday season. These hours will adjusted as the community dictates a Deed.

To business customers, this EPC is their copy center, private mail room, shipping department, support staff, office supply store, print shop and communications headquarters. The EPC National Accounts Network offers customer referrals to the EPC from companies such as Xerox, Panasonic, Ricoh and many others. To the consumer, the Center offers the convenience of expert packing and shipping (US Mail, UPS, Federal Express, Western Union, etc.), private mailboxes, quality photocopying, facsimile machines, binding services, passport photos' lamination, money orders, word processing and dictation transcription services, and on-site computer services. Available industry data indicates a strong need for these services.

The principal products and services available to the consumer include expert packing and shipping, reliable overnight delivery, a full-service copy center, private mailboxes, facsimile transmission/reception, word processing and personal computers, dictation transcription, office/mailing supplies, passport photos, laminating and binding, and fast efficient postal services.

These services will cater to all individuals; no one is excluded. The local merchant needing to package and ship expensive merchandise across the country, to a family member sending grandparents homemade cookies. The ability to have professionally trained people package and ship literally any item across the country offers great comfort, especially in an area like Anniston. This area in Northern Michigan has a strong populous of permanent summer residents. These individuals often require venous services ranging from keeping in close contact with out of state/country business ventures to shipping personal household items from one location to another on an annual basis.

Labor costs are to be kept at a minimum. One of the owners will be in the Center at all times.Initial labor will be obtained through Greenbriar Temporary Services, keeping taxes and benefits at a minimum.

The site selected for this EPC is 8820 Bellevue Street in Anniston, Michigan (previously the DeeDee's Donuts building) serving Greenbriar, Charleston, and Braynor Counties. Location being of utmost importance, this is an easily accessible location with very strong visibility from both directions on Bellevue Street. The parking area consists of one entrance/exit off Bellevue Street and one alternate entrance/exit off an adjacent street. There arc 25 parking spaces (13 in the front of the building and an additional 12 in the rear of the building), with additional parking available on the street. This site is centrally located in the heart of the Anniston, bordered on both the south and the north side by a shopping centers. In addition, a college is located within 2 miles of the Center. The most recently available traffic count going directly past the Center as recorded, by the State of Michigan shows 28,000 vehicles in 1994, 24,000 vehicles in 1996, with an average of 3 passengers per vehicle. This location is within four blocks from downtown Anniston on the major thoroughfare. The location affords convenient access to residential neighborhoods and provides alternate routes for the consumer. We are very excited about this location and the incredible potential it presents.

On-site evaluate on and the most recent census data provided by the Anniston Regional of Commerce portrays Greenbriar County is a predominantly white, middle to upper middle class community with tourism being a major economic force. The county is a four-season vacation area offering numerous attractions as well as long-standing permanent summer residents. The Anniston/Point Freeman area boasts a wealthy permanent summer community that will be an ongoing financial benefit to the Center. Greenbriar County is a diversified economic development that includes industry, specialty shopping, health care, education, and other services.

The area being includes Greenbriar, Charleston and Braynor counties. According to the most recent census Greenbriar and Charleston counties have a combined population of 52,871. where 38,737 is over the age of 18. The educational level in this two county area is comprised of 80.5% of the population having a high school education or above. The median Household Income for these two counties is $29,016.

The targeted customers are likely to utilize the Center because of the numerous professional services offered and the outstanding quality of service received. One of our main goals is to supply absolutely the highest quality, most accommodating service money can buy. The return customer is of utmost importance and in a service business. Service is what a customer should expect and will receive.

Competition in the area consist of the local UPS office located on M12. This UPS office is approximately 6 miles from Anniston and has very limited business hours (Mon-Fri 3:00pm to 5:00pm). The U.S. Post Office is located at 455 University Street in Anniston.

The Post Office has very limited on street parking and is difficult to get to through downtown traffic. Theonly other competition in town is the Postal Connection located at 4403 East Bellevue Street. This is considered competitive only for rural traffic. In addition, the Postal Connection does not have the extensive services offered through the EPC. The location of this store is on the outskirts of town and offers very limited services (UPS and US mail). The lack of competition for the EPC has been a major contributing factor to locating this Center in Anniston.

The greatest advantage the Center will have over any Competition is the network of the franchise organization. There is overwhelming support received from not only the franchise organization itself, but the professional, committed owners of other Centers, all networked via state of the art computer programs, hardware and software. The training received through the franchise organization includes operating procedures, profit center development, advertising, marketing and management. As a franchise owner, we will benefit from a national network television advertising program designed to increase awareness of the EPC name and services that helps drive business into the Center. For local marketing, we will be using the Yellow Pages as well as being supplied with professional print, radio and television advertising to be used at the local level. All of this, combined with extended hours of operation, location, and the professional staff that will be employed will maximize the earning potential of this business venture

The combined experience and personalities of Jack and Gayle Hall are a perfect fit for this business. Jack is a very dedicated, self-motivated, professional with over 20 years experience dealing with Xerox customers. He combines an outgoing personality with the professional persona needed to gain confidence with both the business customer and the local consumer. In addition, Jack brings a wealth of knowledge about business machine service and maintenance. Gayle's experience as a Word Processing Manager within a very large insurance brokerage firm allows her the professional experience needed to coordinate tasks and successfully manage employees. She also has-a very outgoing personality with the warmth of a small town atmosphere. Gayle's skills of typing 120 words per minute coupled with imagination and creativity will be an asset to the customer requiring word processing and on-site computer services.

Balance Sheet (Forecast)

Source of Funds Schedule

Cash Flow: Scenario One Year One

Cash Flow: Scenario One Year Two

Cash Flow: Scenario One Year Three

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Cash Flow: Scenario Two Year One

Cash Flow: Scenario Two Year Two

Cash Flow: Scenario Two Year Three

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Shipping: USPS supports small to large business shipping needs. With a free USPS.com business account, you can print your own labels and access the latest features in the enhanced Click-N-Ship ® experience .
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USPS announces plans to modernize Reno distribution center; outgoing mail will be processed in Sacramento

R ENO, Nev. (KOLO) - The U.S. Postal Service will be modernizing mail operations at its Reno Processing and Distribution Center on Vassar Street as part of a $40 billion investment strategy.

USPS says that in addition to determining that the facility will remain open as a local processing center, it will transfer outgoing mail processing operations to the processing and distribution center in West Sacramento.

The 10-year plan aims to improve organizational and operational processes to make the post office more efficient.

In addition to the new investments, USPS also says there will be no layoffs due to this change.

USPS will invest up to $13.4 million into the Reno Local Processing Center, which will allow the center to expand and streamline package and mail processing and distribution capabilities. Included in these investments is $8.4 million for modernization efforts and deferred maintenance, such as new lighting and renovated bathrooms and breakrooms.

The consolidation of plant operations will also allow the Reno center to be co-located with a sorting and delivery center, which will allow the USPS to provide faster and more reliable mail delivery over a wider area.

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USPS commits to rerouting Reno-area mail despite bipartisan pushback and mail ballot concerns

FILE - A mail carrier loads a mail truck with mail, March 1, 2024, in Lake Tahoe, Calif. The USPS announced on Tuesday, April 23, that it will follow through with its plan to reroute Reno-area mail processing to Sacramento, a move that drew bipartisan ire from Nevada lawmakers while raising questions about the rate at which mail ballots can be processed in a populous part of a crucial swing state. (AP Photo/Andy Barron, File)

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LAS VEGAS (AP) — The USPS announced on Tuesday it will follow through with its plan to reroute Reno-area mail processing to Sacramento, a move that drew bipartisan ire from Nevada lawmakers while raising questions about the rate at which mail ballots can be processed in a populous part of a crucial swing state.

Postmaster General Louis DeJoy has cast the permanent measure as a cost saving move, but federal, state and local lawmakers have complained about a lack of transparency in the process that could slow mail throughout the region.

Under the plan, all mail from the Reno area will pass through Sacramento before reaching its destination — even from one side of the city to the other.

Democratic Secretary of State Cisco Aguilar, the state’s top election official, previously said moving operations could slow the processing of mail ballots, and “has the potential to disenfranchise thousands of Nevada voters and would unquestionably impact the results of Nevada’s elections.”

In the Tuesday statement, the USPS said “the business case” supported moving the processes to California, because most of the mail processed in Reno is destined elsewhere. The Reno facility will stay open as an area that prepares mail before it’s sent out. USPS will invest $13.4 million in the facility, mostly for renovations, per the agency.

FILE - "Ghost guns" are displayed at the headquarters of the San Francisco Police Department, Nov. 27, 2019, in San Francisco. Nevada's Supreme Court upheld the state's ban on ghost guns Thursday, April 18, 2024, overturning a lower court's ruling that had sided with a gun manufacturer's' argument the 2021 law regulating firearm components with no serial numbers was too broad and unconstitutionally vague. (AP Photo/Haven Daley, File)

“This plan for the Reno facility will help USPS achieve the core goals of our Delivering for America plan: financial sustainability for our organization and improved service reliability for our customers,” spokesperson Rod Spurgeon said in an emailed statement.

Democratic U.S. Sen. Jacky Rosen, who opposes the restructuring, previously told reporters that USPS officials indicated their tentative plan was to begin the rerouting in January, after the 2024 election. But in a statement Tuesday to The Associated Press, Spurgeon said there is no set date for implementation.

Lawmakers have expressed concerns that mail service can be caught in traffic delays even in the best of weather by the hour-long round trip drive over the Sierra Nevada, which lies between Reno and Sacramento. The area is also known for harsh blizzards throughout much of the year, including one in March that dumped up to 10 feet of snow and provided ammo for critics of the move.

Northern Nevada’s congressional delegation — which includes Rosen, Democratic U.S. Sen. Catherine Cortez Masto and Republican U.S. Rep. Mark Amodei — sent a letter to USPS opposing the move and have long spoken out against it.

Other opposition came from Republican Gov. Joe Lombardo and the Washoe County Commission, which includes Reno.

In a statement following the announcement, Rosen said she was “outraged that out-of-touch Washington bureaucrats think they know what’s best for our state.”

“Let me be absolutely clear: this fight is not over,” she said in the statement. “As a member of the committee with jurisdiction over the Postal Service, I will continue to fight against this ill-advised decision and explore all available options to prevent it from being implemented.”

Lombardo said his administration, along with Nevada’s congressional delegation, will “continue to fight against mismanagement in Washington for timely and efficient mail services for Nevadans.”

Stern is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a service program that places journalists in local newsrooms. Follow Stern on X, formerly Twitter: @gabestern326.

USPS commits to rerouting Reno-area mail despite bipartisan pushback and mail ballot concerns

The USPS announced on Tuesday it will continue with its plan to reroute Reno-area mail processing to Sacramento, a move that drew bipartisan ire from Nevada lawmakers while raising questions about the rate at which mail ballots can be processed in a po...

LAS VEGAS -- The USPS announced on Tuesday it will follow through with its plan to reroute Reno-area mail processing to Sacramento, a move that drew bipartisan ire from Nevada lawmakers while raising questions about the rate at which mail ballots can be processed in a populous part of a crucial swing state.

Under the plan, all mail from the Reno area will pass through Sacramento before reaching its destination — even from one side of the city to the other.

Other opposition came from Republican Gov. Joe Lombardo and the Washoe County Commission, which includes Reno.

In a statement following the announcement, Rosen said she was “outraged that out-of-touch Washington bureaucrats think they know what’s best for our state.”

Lombardo said his administration, along with Nevada’s congressional delegation, will “continue to fight against mismanagement in Washington for timely and efficient mail services for Nevadans.”

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Regulators leave Royal Mail vulnerable to ‘corporate predators’, says investor

Shareholder calls for softening of postal service’s obligations after failed takeover bid by Czech billionaire for owner IDS

One of the top investors in Royal Mail’s owner has said it is vulnerable to “corporate predators”, arguing that a recent takeover bid by a Czech billionaire significantly undervalues the company.

Redwheel called for regulators to water down the UK postal service’s legal obligations after Daniel Křetínský’s failed takeover attempt of its parent company International Distributions Services (IDS).

It emerged last week that the IDS board had unanimously rejected a £3.1bn bid by Křetínský’s EP Group earlier this month, calling it “opportunistic”.

Křetínský is considering making an improved offer for IDS, according to reports, and has until 15 May to make a fresh bid under UK takeover rules.

Royal Mail has been under pressure for years as the volume of letters continues to decline. The UK regulator, Ofcom, is considering options for the future of the service, including letting it cut the number of days it must deliver letters under its universal service obligations (USO).

The USO was well known to the investors who bought shares in Royal Mail when it was privatised in 2013. However, many of the investors now argue that the legal requirement to deliver post across the country at a fixed price every day bar Sunday is unsustainable.

Rishi Sunak has said the government will oppose any cuts to the six-day service but Royal Mail has asked Ofcom to allow it to reduce second-class letter deliveries to two or three days a week , cutting almost 1,000 jobs and saving £300m a year.

Redwheel is the third-largest shareholder in IDS, behind Křetínský’s investment vehicle Vesa and Schroders. Ian Lance, a co-head of Redwheel’s value and income team, said in a statement first reported by the Sunday Times that it believed Royal Mail was “vulnerable to corporate predators” because of enforced costs caused by its legal obligations.

“Letter volumes have declined from 20bn at their peak in 2004-5 to 7bn in the last financial year and are likely to continue to fall,” Lance said. “The USO means Royal Mail must maintain a high fixed-cost network without the revenue to sustain it.

“We would urge that change to the USO needs to be meaningful, provide long-term relief from the material and unreasonable cost burden and be implemented rapidly.”

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Křetínský’s wealth came from his investments in coal power stations, and is known as the “Czech Sphinx” of his low profile and inscrutable approach.

However, he has gained increasing prominence by buying stakes in Le Monde newspaper, Sainsbury’s supermarket and the French counterpart Casino, and then Royal Mail. He also has a stake in West Ham football club.

EP Group was approached for comment.

Mergers and acquisitions
Postal service

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Politics latest: Angela Rayner labels Rishi Sunak a 'pint-sized loser'; PM insists defence spending pledge 'fully-funded'

While Rishi Sunak spent the day heralding his defence spending commitment on a trip to Germany, Oliver Dowden and Angela Rayner stood in the prime minister and the Labour leader at PMQs.

Wednesday 24 April 2024 21:59, UK

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Sunak insists rise in defence spending is 'fully-funded'
Beth Rigby: PM seeking to position himself as a strong leader prepared to defend the country
Sophy Ridge: There are cracks underneath the apparent unity on defence spending
Rayner presses Dowden on no-fault evictions - and raises Sky News report - after joke about 'obsession' with her living arrangements
Labour deputy leader labels Sunak a 'pint-sized loser'
Local elections: Sam Coates on why they matter | Who can I vote for? | What Sunak and Starmer will be hoping for
Live reporting by Tim Baker

That's it for today.

We're wrapping up the Politics Hub, but make sure to join us again tomorrow.

And remember, at 7pm tomorrow there's a special episode of the Politics Hub with Sophy Ridge.

It will come live from one of our Target Towns, Grimsby, and will feature brand new polling and a live audience.

Before you go, here are some of today's main stories.

By Alexandra Rogers , political reporter

Defence Secretary Grant Shapps has said he wants the new NATO target for defence spending to increase from the current 2% of gross domestic product to 2.5%.

Mr Shapps said it would make a "real difference" if the countries signed up to the military alliance met his proposed target.

He told Kay Burley on Sky News: "We're now saying we think that should be 2.5%. We think in a more dangerous world that would make sense.

"I will be arguing that, and I know that the prime minister feels strongly about it, when we go to the NATO 75th anniversary summit which is in Washington DC."

The defence secretary's intervention comes after Rishi Sunak pledged to increase UK defence spending to 2.5% of GDP by 2030 to tackle the "growing threats" posed by hostile states including Russia, Iran and China.

Speaking alongside NATO Secretary General Jens Stoltenberg at a press conference in Warsaw yesterday, the prime minister said he planned to steadily increase defence spending by the end of the decade, rising to 2.4% a year until 2027-28 - then hitting 2.5% by 2030-31.

Funding will rise from £64.6bn in 2024 to £78.2bn in 2028, and then jump to £87bn in 2030-31.

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