How the USPS Slowdown is Hurting Small Businesses (2024)

How are USPS delays affecting small businesses?

The USPS has long been vital to the operation of small businesses and the postal service has only become more important with the increasing popularity of online shopping. This makes service changes or slowdowns difficult for small businesses.

Some help is offered with the Postal Service Reform Act of 2022, a new $50 billion relief plan for USPS passed by Congress last year. Part of the deal requires the USPS to deliver mail six days a week, except in rare weather exceptions such as natural disasters.

Despite this legislation, mail-delivery delays still exist. Here is how small businesses are being affected.

Alternative delivery services are more expensive.

The USPS delivers a staggering number of packages, letters and other parcels — approximately 425.3 million individual pieces per day, according to the USPS. As deliveries get delayed and expected delivery dates become murky, small business owners like HeadsetPlus.com owner Yungi Chu, have had to deal with slower deliveries.

“Slow USPS service has been causing havoc to our online mail order business,” he said. Although he could use another shipping service, like UPS or FedEx, to alleviate the problem, the difference in cost between those services and the USPS is too wide for them to be a feasible answer to the problem.

“The same three-day service [with either FedEx or UPS] would cost two to three times more, so it’s a lose-lose situation right now,” Chu said. “Either we pay more through UPS or FedEx or we gamble with the slow service.”

Let’s take a shipping comparison website, onlineshippingcalculator.com, and compare a package traveling from New York City to Los Angeles. For a package that’s 10 x 10 x 10 weighing 10 pounds, using a general average, typically USPS is still the cheapest option (a seven-day delivery time is $9.03) while the ground option for UPS for a four-day turnaround (or FedEx for five days) is $27.04.

Customers are becoming upset with slow service.

Although most people are aware of the USPS delays, many small businesses have still had to deal with complaints from customers. Small businesses often live and die by their customer service, so whenever there’s a shipping delay, small business owners have no choice but to try to make things right.

“When it comes to any shipping issues, it always reflects back on us first,” said Meaghan Thomas, owner of Pinch Spice Market. “As far as most customers are concerned, we are the cause of the delay — even when they’re aware of the USPS issues. We don’t want our good and hard-earned reputation to deteriorate, so we resolve the issue at any cost.”

Thomas has tried a few methods for assuaging negative feelings from customers. For example, the company has sent free replacement orders, provided a coupon for the next shipment or refunded the delayed product. Although such measures can get expensive, Thomas said she has to eat those costs to maintain customer satisfaction.

“We’ve worked so hard to grow this business,” she said. “It’s taken a lot of hard work, energy and sometimes tears to get our company to where it is now.”

Important financial transactions are being delayed.

Packages are not the only type of mail that has been delayed in recent weeks; important finance-related items — like bills, checks and invoices — have either arrived past their due dates or failed to show up altogether.

Nick Norvell, a wealth management adviser at Croak Asset Management, said the USPS delays have hit his employer exceptionally hard. Because most of the firm’s transactions are conducted by sending and receiving checks in the mail, any delays increase the time each transaction takes to complete — and those slowdowns, in turn, affect customers.

“Not only does this delay the speed at which we are able to process business, but it also has potential impacts on the client as well,” Norvell said. “Investment opportunities can be time-sensitive and when you are relying on the infrastructure of the postal service to facilitate these across the board, you have the chance to miss out on buying opportunities because of the delays.”

In addition to resulting in missed opportunities, the delays are affecting financial transactions. Norvell said many of his firm’s clients would rather send important documents in the mail than via electronic methods.

“USPS handles roughly 90 percent of our mailing to our office and is also the way that our clients receive account updates if they choose to decline electronic statements,” he said.

Adria Gross, founder of MedWise Insurance Advocacy, said healthcare payments have been delayed as well. If claims don’t get paid on time, it can lead to potentially disastrous financial problems.

“One of my clients sent a check to me via her bank account on July 28 … I kept calling her, informing her that the check had not arrived,” Gross said. “On August 24, [the client] sent a personal check to me via two-day Priority Mail. It arrived two days later but sitting in my post office box was the other check my client sent out on July 28.”

It ended up costing nearly $11 to ship the second check via USPS Priority Mail, compared with less than a dollar for regular postage.

What’s causing the USPS delays?

There are two main reasons for the USPS delays. First, the postal service is strained by the increased shipping volume resulting from the COVID-19 pandemic. Second, recent changes implemented by USPS Postmaster General Louis DeJoy have resulted in slowdowns.

Because of COVID-19 closures many Americans shifted to purchasing products online while staying at home and the country has experienced a shift in how it conducts business. Increased online sales have led to a higher demand for the USPS’s delivery services, resulting in some deliveries taking longer than expected.

Along with the logistical troubles that come from an unanticipated surge in packages, the coronavirus itself had an impact on the USPS’s workforce. According to a Government Executive, approximately 55,600 USPS employees had tested positive for COVID-19 among its workforce back in July 2021. The number of COVID-19-related deaths among postal workers has not been widely reported by the government, but it is estimated that at least 197 workers have died from the disease, according to ProPublica.

The other major reason for these slowdowns is a series of changes, implemented by DeJoy’s 10-year plan. Changes being made included adding a minimum of a day to First Class delivery times, a shifting focus from air delivery to ground delivery, increasing domestic rates, limiting overtime and reducing post office hours. These changes, plus more, are meant to major financial issues facing the postal service.

Congress also passed the bipartisan-supported relief plan for USPS in 2022 to help offset the losses suffered by the organization, with a crucial piece of it undoing 2006 legislation that required the USPS to prefund retiree health benefits of all of its present and past employees for 75 years — a more than $120 billion commitment.

How small businesses can adapt to USPS delays

As the federal government continues to wrestle with these delays, small businesses are looking for ways to ensure faster deliveries to customers, who are still reluctant to shop in brick-and-mortar stores because of COVID-19 risks.

Although some business owners, such as Chu, said they’re sticking with the USPS, others are switching to other shipping services, like FedEx and UPS.

“In the past, we had always given people options for shipping, but due to issues over the past couple of months with COVID, we instantly upgrade them to express shipping so that the customer receives their package on time,” said Jeff Moriarty, marketing manager at Moriarty’s Gem Art. “People are still used to receiving packages quickly due to companies like Amazon, so to stay competitive, we need to do what we can to make the customer happier than ever and receiving their package fast helps a ton.”

He’s also looking ahead to prevent delays during the holiday season. “We will be completely removing the first-class option and only giving the option for express shipping, which we will be offering for free,” Moriarty said. “This will be the only way we can guarantee the customer receives their package in a timely manner.”

Companies that rely on prompt payments are shifting to online services, such as Square, PayPal and Venmo. David D. Schein, president and general counsel at Claremont Management Group, said one way he’s dealt with the delays has been to move most of his business transactions online.

In the past six months, two of his checks, both over $1,000, did not arrive at their destinations. “One was returned two months later, with a bogus explanation,” Schein said. “The other check has never surfaced or been cashed. I replaced one payment with Zelle and the other with Venmo.”

The shift to a more cashless society offers businesses lots of options for accepting online payments, including PayPal. [Read related: 5 Important Things to Know Before Accepting Online Credit Cards]

How your small business can work around USPS delays

How your small business deals with USPS delays will not have a simple solution. COVID-19 delays, though frustrating, are becoming less of an obstacle since the development of vaccines and with new variants seeming less fatal. Delays from the USPS itself, specifically the 10-year plan, is a different story. The changes in policy, pricing and services is not something that is likely to reverse course.

What your small business can do is be diligent and proactive when it comes to deliveries. The USPS provides service alerts, which allow you to get an idea of what might delay your package, giving you time to adjust. Being flexible and adaptable is a key component to surviving with an ever-changing world around you.

Additional reporting by Andrew Martins.