The U.S. Postal Service said Thursday it needs to cut more costs to improve its financial health. To do so, the postal service will revamp its delivery logistics, which will likely result in a slowdown in mail delivery for some customers.

The new plan, which will be submitted to the USPS Regulatory Commission, comes about three years after the postal service announced a 10-year plan to stem billions in losses and put the agency on the path to profitability. The 10-year plan implemented by Postmaster Louis DeJoy also slowed delivery standards, with the service guaranteeing five-day delivery instead of the previous three-day delivery window.

The proposed changes would save about $3 billion annually, the USPS said on Thursday, adding, however, that “depending on location, time and distance, the estimated delivery time for some zip code pairs will increase.”

The USPS also has drove up the price of Forever stamps several times in recent years, prompting some critics to say customers are paying more for inferior service. The proposed changes could have a negative impact in rural areas and on mail that must travel long distances, DeJoy told the Washington Post.

“Ultimately, I think some of the mail came back 12 hours later. I think that’s the price we had to pay for neglecting this place,” DeJoy told the publication.

Under the proposed changes, all mail would continue to be delivered within two to five days, a USPS spokesperson told CBS MoneyWatch. The majority of mail from rural areas is currently delivered in three days or less, which will continue to be the case, he added.

However, mail delivery from some rural areas may take 12 to 24 hours longer but still arrives within two to five days, he added. In some cases, a letter that would otherwise have taken three days may take four days, for example, the spokesman added.

A USPS fact sheet on the proposed changes states that the plan would have no impact on 75% of first-class mail.

The combination of higher prices and slower delivery risks the USPS losing more customers, critics say. That comes at a time when the postal service has already seen a sharp decline in first-class mail volume. According to USPS data, the volume of first-class mail has fallen 28% from nearly 64 billion in 2014 to 46 billion pieces in 2023.

“Any attempt to degrade service while raising prices is a recipe for a death spiral at the Postal Service,” Rep. Gerry Connolly, a Virginia Democrat and critic of DeJoy, said in an emailed statement to CBS MoneyWatch.

He added: “This is the second time Postmaster General DeJoy has proposed lower service standards. He might as well announce a return to horse-drawn mail delivery.”

The Coalition for a 21st Century Postal Service, an advocacy group for greeting card, magazine and newspaper publishers, also expressed concerns about the proposed change. It said it was waiting for more details and an explanation of the savings the plan would seek.

“With postage prices at record highs and slower service, we are concerned about what these changes will mean for rural communities and the rest of the country,” the group said in an email to CBS MoneyWatch. “There is only so much that service can be degraded and prices increased so much before individuals and businesses lose faith in the postal system, as the current sharp decline in business seems to demonstrate.”

Losses at the USPS

Overall, the Postal Service has accumulated losses of over $87 billion from 2007 to 2020.

Details were released by the Postal Service ahead of a Sept. 5 meeting at which the proposed changes will be discussed with stakeholders before being submitted to the Postal Regulatory Commission, the USPS’s regulator.

Election and holiday mail will not be affected because the proposed changes would not take effect until next calendar year, officials said. Medicines should also continue to be delivered at current speeds or even faster under the proposal, officials said.

The plan could also lead to faster delivery of certain mail items by making better use of existing ground networks, officials said.

The proposal reflects the Postal Service’s efforts to revamp its processing and transportation network, focusing on major regional hubs. This process is already underway in Atlanta, Richmond, Virginia, and Portland, Oregon.

— With reporting from the Associated Press.

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