The Cutbacks at USPS Have Hurt Small Businesses

By: First Union | Date:

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The Cutbacks at USPS Have Hurt Small Businesses

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There have been some changes recently at the USPS. Among them, some major cutbacks. This in turn has left many small businesses hurting as they rely on mail delivery service to distribute their goods to customers across the country.

Not only that, but we are seeing issues when it comes to vendors receiving payment via check. This has stirred up more than a few unpleasant situations between small businesses and their suppliers.

Businesses in some instances, seem to be losing credibility with their customers. Yard signs aren't getting delivered in time for special events for example. Other such marketing material as well as falling short of making the deadline. Around the nation, deliveries simply aren't showing up. Small business owners are feeling the pressure. Reputations are taking a hit because of slowdowns seen across the board within the USPS.

In the early part of the year, Louis DeJoy—a major donor to the Republican party—was appointed as the new Postmaster General. For his part, in light of the situation the world was facing, DeJoy introduced a variety of cost-cutting measures to help streamline the postal service. However, given that there is expected to be a massive amount of ballots cast by mail this year for the November election, many are highly concerned about the post office's ability to handle what lies ahead later this fall.

DeJoy recently remarked that there would not be any "longstanding operational initiatives" until after the November elections to make sure there would be no impact on the election itself. To this end, blue boxes would remain in place, overtime would continue to be paid out to employees, and they would refrain from closing any post offices shortly. That said, some news outlets are reporting that mail sorting machines have been removed from several regional offices.

Small Business Feeling the Strain

A key demographic of the USPS are small businesses. Especially those companies with fewer than ten employees—which could be considered microbusinesses—they rely heavily on the post office and its services to meet customer demands. A recent survey showed that businesses of this size tend to use the USPS more so than any other such delivery service.

As the pandemic has shut down many storefronts and more and more companies are pivoting to a digital and online presence in the hopes of keeping things going, the slowdown of the US post office is most definitely hurting their bottom line. Again, sign companies for example are certainly having to deal with some major issues as a result of the cutbacks seen within the USPS. One such company in California for instance said that to date the problems associated with the post office have cost them near five thousand because signage is not being delivered in time for scheduled events—they are thus having to refund customers for products already made and delayed somewhere in the shipping process.

With small business owners already facing major pandemic related challenges, shipping glitches are only adding fuel to the fire. Many are having to switch to more reliable forms of shipping and delivery such as FedEx or UPS; the problem though is that these companies tend to charge quite a bit more than the post office which is difficult for some microbusinesses especially to manage during this financial crisis.

The Postal Service in many US cities has been addressing concerns. They are attempting to rectify the problems as well as hire more workers to deal with the increase in online sales across the nation. Demand in some ways is higher than ever before as far as the post office's services are concerned. They simply are not able to cope though with the demand at the rate that they need to.

Many small business owners also prefer the Postal Service because it tends to be more reliable (at least before the current moment/) than some of the other services out there. Especially for example when it comes to missing items and the claims process involved. This is one reason why numerous businesses do opt for the post office over a UPS. That said, several entrepreneurs are continuing to show their support for the USPS. Some owners for example have been emailing clients informing them that shipments could be delayed, but reiterating that they do firmly trust the post office with their products.

Packages that once upon a time took days to reach their destination now even in major US cities are taking weeks. What this essentially does is make it harder for the small business owner to compete with larger corporations who don't have to rely on the USPS because of cheaper rates.

Many customers though have been understanding. In the wake of what has gone on, people do want to see small businesses succeed and so if they have to wait additional time for a shipment that would otherwise come in a few days, they generally seem to be okay with that. In the interest of not wanting to see the USPS privatized, small business owners for the time being appear to be sticking to mail delivery service; it remains to be seen though for how long they can afford to do so.

First Union Lending is working with small business owners across the US during this difficult time. We want to see our clients make it through this and come out stronger than ever. Offering short term loans, lines of credit, and merchant cash advances, among other funding options, we can get you the cash you need to weather the storm. Some have the money in their accounts within 2 business days. And every financing solution is custom-tailored to your company. No off the shelf approach with us. If you need additional working capital during this challenging time, call us today and let's get started together!

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