Udall and Heinrich to DeJoy: Postal Delays Are Harming Small Businesses During Pandemic

Many small businesses rely on U.S. Postal Service to deliver important materials and send products to customers

WASHINGTON—U.S. Senators Tom Udall (D-N.M.) and Martin Heinrich (D-N.M.) joined a group of 25 senators in a letter to U.S. Postmaster General Louis DeJoy, pressing him about recent changes to the U.S. Postal Service (USPS) that caused delivery delays and increased costs for small businesses already struggling with lost revenue during the COVID-19 pandemic.

USPS is the “carrier of choice” for many small businesses that have fewer than 10 employees, which are among the most vulnerable small businesses. Over 70 percent of these vulnerable businesses regularly rely on the Postal Service, the majority of which use the service more frequently than other carriers. In the four months since DeJoy became Postmaster General, he has taken actions that have compromised mail service for all Americans and constructed yet another obstacle for small businesses struggling to survive the economic consequences of the COVID-19 pandemic.

“Small businesses are the driving force of our economy, making up 99.7% of all firms in the U.S. with paid employees,” the senators wrote. “Many of these businesses have structured their business models around the U.S. Postal Service, which has long offered fast, reliable, and affordable service for their needs, from shipping products to sending paychecks to connecting with customers.

“Due to the ongoing pandemic, countless small businesses have shifted from brick and mortar operations to online ordering and delivery— intensifying the need for consistent, dependable postal services,” the senators continued. “Changes that you have instituted at the Postal Service threaten the financial well-being of small businesses and their employees. Since you directed operational changes in post offices and processing centers that restrict timely mail delivery, small businesses across the country are reporting significant delays after years of reliable service.

“The Postal Service is a critical service and lifeline for small businesses across the country and your actions are needlessly damaging a service that has reliably served our businesses and communities for decades,” the senators concluded. “We call on you to clarify the status of any initiatives you have implemented at the Postal Service and to reverse all changes you have made to operational services since becoming Postmaster General.”

The senators requested that DeJoy answer a series of questions regarding the purpose, procedure and effect of the recent changes he directed at USPS.

The full text of the letter can be found here and below.

Dear Postmaster DeJoy:

Your recent changes to Postal Service operations have resulted in delays that threaten to undermine the viability of small businesses, which are critical to our economy and are already at financial risk because of the ongoing Coronavirus pandemic. We write to seek answers about changes to the Postal Service under your leadership that have adversely affected mail delivery for millions of Americans, including countless small businesses across the country.

As many of us have previously written, actions you have taken in the few months since you became Postmaster General have slowed down mail and compromised service for veterans, rural communities, seniors, and millions of Americans who rely on the mail for medicines, essential goods, voting, correspondence, and – especially for small businesses – for their livelihoods. We were initially relieved to hear that the Postal Service will be suspending some of these changes. It now appears, however, that your statement was misleading. During the recent hearing before the House Committee on Oversight and Reform, you testified that “I have not removed any machines.” However, in response to Senator Peters’ questions during the recent Senate Committee on Homeland Security and Governmental Affairs hearing, you stated that “there is no intention” to bring back the machines. We are concerned by your continued lack of transparency regarding which specific initiatives the Postal Service has suspended, what that actually means, and the potential for continued harm to America’s small businesses.

Small businesses are the driving force of our economy, making up 99.7% of all firms in the U.S. with paid employees. Many of these businesses have structured their business models around the U.S. Postal Service, which has long offered fast, reliable, and affordable service for their needs, from shipping products to sending paychecks to connecting with customers. According to a 2019 report, the Postal Service is the “carrier of choice” for small businesses with fewer than 10 employees, with 70% of these businesses using the Postal Service and the majority relying on it more frequently than other carriers. Due to the ongoing pandemic, countless small businesses have shifted from brick and mortar operations to online ordering and delivery—intensifying the need for consistent, dependable postal services.

Changes that you have instituted at the Postal Service threaten the financial well-being of small businesses and their employees. Since you directed operational changes in post offices and processing centers that restrict timely mail delivery, small businesses across the country are reporting significant delays after years of reliable service. For example, as detailed in Senator Peters’ interim investigative report on postal delays, an Ada, Michigan company that produces educational materials for health care workers working with dementia patients has had to lay off multiple employees due to the combined impact of the pandemic and mail delay costs. One small business owner of a key replacement company in Madison, WI states that, after eight years of reliable service, one in five packages no longer reaches customers on time. Another business owner in Irvine, CA has received customer service calls about slowed deliveries. The owner of an accessories and clothing shop in Houston, TX worries about the delays becoming a “routine problem” that could hurt her business. A small business owner in Maryland expressed frustration about a three-week shipment delay.

These delays have a magnified negative impact on small businesses that exist solely on online platforms like Etsy and eBay and rely on the Postal Service to reach their customers. These platforms offer unique opportunities for microbusinesses to thrive, especially women-owned businesses, which make up over 80 percent of Etsy sellers. Limiting the Postal Service’s operations undermines the low rates and door-to-door service that the vast majority of microbusinesses on Etsy, eBay, and other online marketplaces benefit from, threatening the success of these entrepreneurs. For example, a 26-year-old entrepreneur from the Bronx, NY who recently launched an Etsy shop selling hand-painted pouches, tote bags, and enamel pins has expressed serious concerns that she will go out of business if her shipping costs increase due to a loss of reliable Postal Service deliveries.

If small businesses cannot fulfill orders in a timely manner, they will quickly lose customers. Furthermore, if small businesses are forced to adapt to Postal Service delays by making use of more expensive delivery options, the increased costs will eat into the already thin margins of so many small businesses and may even result in the closure of their operation. At a time when the pandemic has potentially driven hundreds of thousands of small businesses to close their doors, these changes only exacerbate the financial crisis facing business owners, their employees, and their communities.

Alienating small businesses will harm not only business owners but also the Postal Service itself. In 2018 alone, e-commerce accounted for over half a trillion dollars in sales for U.S. retailers. Many of these businesses utilize the Postal Service to deliver online orders to consumers. Although you claim your recent actions are meant to improve the financial situation of the Postal Service, delaying mail delivery services will almost certainly do just the opposite.

As Postmaster General, you have a responsibility to ensure your actions are in the best interest of the Postal Service and those it serves, including small businesses across the country. However, as we wrote earlier this week, you have avoided answering questions about the magnitude of delays we have seen and have not yet provided any evidence that you studied or considered how your changes would affect mail service prior to implementing these changes—this appears equally true in relation to small businesses.

The Postal Service is a critical service and lifeline for small businesses across the country and your actions are needlessly damaging a service that has reliably served our businesses and communities for decades. We call on you to clarify the status of any initiatives you have implemented at the Postal Service and to reverse all changes you have made to operational services since becoming Postmaster General.

Please provide the following information by September 11, 2020:

1. Did you conduct any formal analysis pertaining specifically to small businesses before making the recent changes to Postal Service operations, as outlined in our August 17, 2020 letter? If so, please provide the analysis. If not, please explain why.

2. Did you consult with the Small Business Administration or any other stakeholders representing small businesses prior to these recent changes? If so, please list and describe any such discussions. If you did not engage in such discussions, please explain why.

3. What steps, if any, is the Postal Service currently taking to track and analyze the impact of recent changes on small businesses, including the impact on delivery times and small businesses’ utilization of services provided by the Postal Service? Please provide the information you have gathered thus far and if you are not tracking this information, please explain why.

4. In your August 18, 2020 statement, you stated that you were “suspending these initiatives until after the election is concluded.” However, this statement did not clarify which specific initiatives you intended to suspend. Please provide a list of any changes you have instituted at the Postal Service during your tenure, the status of each change, and whether each change will be suspended until after the election.