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Small Business Impacts of USPS Delays

image for Maria Sbytova / Shutterstock
Maria Sbytova / Shutterstock
  • Businesses everywhere are feeling the sting of increasingly common USPS shipment delays.
  • From late payments to negative customer reviews, the delays have taken their toll in different ways.
  • Some business owners are eating the higher cost for faster delivery times, while others are left looking for alternatives.
  • This article is for small business owners who are worried about how changes at the U.S. Postal Service will affect their operations.

Recent changes from the top down at the United States Postal Service (USPS), coupled with ongoing issues surrounding COVID-19, have caused the U.S. mail system to experience a slowdown in the processing and delivery of mail. Besides being a major annoyance for most people, it has caused severe problems for many sectors of the economy, and small businesses have been hit especially hard.

We reached out to business owners and logistics experts to get a better understanding of how mail delays are 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. In July, Etsy CEO Josh Silverman wrote in a letter to Congress that approximately 90% of the platform's sellers use the USPS for shipping, and sometimes, it's the only option.

The "USPS is particularly important for our sellers who live in rural communities, where USPS may be the only carrier available to them," Silverman wrote.

With the future of the USPS remaining uncertain, here are some of the ways continued mail-delivery delays have hurt small businesses around the country.

The USPS delivers a staggering number of packages, letters and other parcels – approximately 472.1 million individual pieces per day, according to the USPS. As deliveries get slower 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. "Before the slowdown, our USPS mail packages would get to any address in the United States in less than three days." Now, customers are reporting that deliveries are taking three to seven days, or sometimes even longer, Chu said.

Though 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."

Though 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. Though 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."

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% 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.

Key takeaway: Delays at the USPS are affecting small businesses in several ways, such as by lowering customer service ratings and slowing down financial transactions.

As the federal government continues to wrestle with these delays, small businesses are looking for ways to ensure faster deliveries to customers, who have gotten used to quick shipping and are more reticent to shop in brick-and-mortar stores because of the risks posed by COVID-19.

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 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 busy holiday season.

"With the holidays approaching, 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."

Mitch Goldstone, CEO of ScanMyPhotos, said electronic solutions have helped his company as well. "We did add a very costly added service for InstaMedia – as soon as orders are received and scanned, we upload the completed scanned photos to customers."

Key takeaway: Small businesses are adapting to postal service delays in many ways, including by switching to online payment systems and using other shipping services.

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 many Americans have been staying home and shifting to online purchases over the past several months, the country has experienced a sudden shift in how it conducts business. Increased online sales have led to a higher demand for the USPS' 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' workforce. According to a report from Government Executive, approximately 5,400 USPS employees had tested positive for COVID-19 among its workforce of 630,000 as of mid-July. The number of COVID-19-related deaths among postal workers has not been widely reported by the government, but postal worker unions have estimated that more than 60 workers have died from the disease.

The other major reason for these slowdowns is a series of changes, including limited overtime and the elimination of late delivery trips, that were reportedly being implemented to combat major financial issues facing the postal service. USPS officials said the coronavirus outbreak could ultimately cause an estimated $22 billion in losses, prompting a plea to Congress to address the situation. The House of Representatives has approved a $25 billion additional appropriation for the USPS, though it's unlikely to reach President Donald Trump's desk for final approval.

Roughly a month after being appointed postmaster general, DeJoy announced a series of policy changes that he has said will address the shortfalls. Of key concern for many was the statement that the post office would accept late and delayed mail delivery to cut costs.

After intense scrutiny from both the public and Congress, DeJoy announced that the cost-saving measures he proposed would be paused until after the November election.

Key takeaway: The coronavirus pandemic and changes at the USPS have led to postal service delays.

Andrew Martins

I am a former newspaper editor who has transitioned to strictly cover the business world for business.com and Business News Daily. I am a four-time New Jersey Press Award winner and prior to joining my current team, I was the editor of six weekly newspapers that covered multiple counties in the state.