How Postal Service cutbacks have left small businesses hurting

For small businesses reliant on shipping, delayed mail delivery stemming from recent changes at the U.S. Postal Service has been a nightmare.

Payment checks to vendors never arrive, forcing business owners to incur extra costs to cancel checks and wire funds instead. Custom yard signs don’t get to customers in time for special events, leading to refunds. And some business owners fear that delayed shipments could harm their standing with customers.

“People trust us,” said Mitch Goldstone, chief executive of ScanMyPhotos.com, an Irvine-based company that digitizes old photos and burns them onto DVDs. “The cost to my reputation is incalculable.”

After major Republican donor Louis DeJoy was appointed Postmaster General earlier this year, he introduced new policies portrayed as cost-cutting measures that have delayed mail and increased concerns about the organization’s readiness to handle the expected onslaught of mail ballots ahead of November’s presidential election.

On Tuesday, DeJoy said in a statement that “longstanding operational initiatives” would be suspended until after the election to “avoid even the appearance of any impact on election mail.” As part of that effort, DeJoy said mail processing equipment and blue collection boxes would remain where they are, that no mail processing facilities would be closed and overtime pay for workers would continue to be approved “as needed.”

But Tuesday’s announcement may be little comfort since mail sorting machines were already removed in some cities, according to Bloomberg.

One of the Postal Service’s key customer segments is small businesses, according to a 2013 audit report on small business growth by the USPS Office of Inspector General.

Microbusinesses, which have fewer than 10 employees, are particularly reliant on the Postal Service: In a recent survey, a majority of respondents said they used it more frequently than other carriers.

Los Angeles-based digital sign printer CR&A Custom Inc. has leaned heavily on its e-commerce business since the pandemic effectively shut down its main business of making signs and banners for special events. The company now ships yard signs for graduations, birthdays and even funerals.

But with the shipping delays, those signs don’t always arrive when they’re supposed to. And when that has happened, CR&A Custom has had to reimburse the customer and ship a replacement sign via another delivery service, which slashes profit, said Carmen Rad, the company‘s president. So far, that has cost the company about $4,900.

The delivery delays also have affected the company’s payments to vendors, forcing CR&A Custom to pay additional fees to cancel the check and wire money instead.

“We already have so many challenges day to day and my role as a business owner is to make sure I keep my employees employed and to create new jobs,” Rad said. “Why are we allowing this? These are institutions that should be protected.”

She now ships all of her orders via FedEx, at a higher rate.

The Postal Service said in a statement that its employees in the Greater Los Angeles area were trying to handle the increased volume of mail and that it was in the process of hiring additional temporary workers to keep up with demand.

Switching over to a private courier service such as FedEx or UPS isn’t always possible for companies that rely on low-cost shipping options.

“When you do try to do workarounds, obviously that’s not going to be the most cost-effective,” said Lilly Rocha, executive director of the Los Angeles Latino Chamber of Commerce, who said she has heard from about 20 people in the group about shipping delays.

When Kathleen Whitaker first started selling jewelry online in 2003, she used private shipping companies. But she quickly switched over to the Postal Service after having problems reconciling claims with those other firms for missing merchandise, she said.

“I work with USPS because it’s a really reliable product,” said Whitaker, owner of Kathleen Whitaker Inc., a Los Angeles-based jewelry company.

She has sent an email to shoppers giving them advance warning that shipments may be delayed due to the current situation, partly as a customer service obligation, but also to voice the company’s support of the postal service.

Alysha Cassis-Shaw, founder of Oakland-based fashion company Neutral Ground, said she first started noticing the shipping delays in June. Packages bound for L.A. that once took a day to get to customers were now taking more than a week to arrive.

“As a small-business owner, it’s just been harder and harder to compete in a market where there are all these big folks,” she said. “At every turn, we’re being thwarted.”

So far, customers have been understanding about the delays. And although some of her colleagues have switched to using other shipping companies, Cassis-Shaw isn’t ready to do that.

“I don’t believe that the Postal Service should be privatized so I’m really trying to hold off for as long as I can,” she said. “I do want to support the USPS.”