Slow down Postal delivery to save USPS ?

An article in CNNMoney (http://money.cnn.com/2011/12/05/news/economy/postal_service/index.htm?iid=HP_LN&hpt=hp_t2) describes a proposal by the US Postal service to change the delivery guarantee for first class mail from the current one to three days to a slower two to five days.  The slower delivery will allow reduced mail processing capacity (from eliminating 250 facilities) and thus lower labor costs.  Given the existence of competitive alternatives for time sensitive mail, do you think the drop in first class demand will further worsen the plight of the US Postal Service ?  Should schemes that decrease front office costs by switching to private shared postal facilities be considered instead ? Should differential pricing (based on distance) for first class mail be considered as an alternative ?

About aviyer2010

Professor
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