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

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

Shifting packages and envelopes from air cargo to ground transportation was part of DeJoy's larger plan to improve the Postal Service’s financial health.

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

It is part of DeJoy's broader effort to reduce operating costs, increase revenue from packages, and ensure timely deliveries, along with adjusting prices to mitigate inflation and expanding delivery points over the next 17 months.

Those efforts will have to continue after the Postal Service on Tuesday reported a projected $6 billion in unplanned costs this year because of inflation, unexpected retirement costs and other factors, he told the Board of Governors.

"We continue to manage the costs within our control, such as by reducing work hours by 6 million hours compared to the same quarter last year and by focusing on transportation and other operating costs," Chief Financial Officer Joseph Corbett said.

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

That marks the start of eradicating over $20 billion of deferred maintenance and preparing the Postal Service for the next 30 years, he said.

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This story has been corrected to show that the local processing centers and sorting and delivery centers will be renovated, not built.