Problems at the post office could devastate these small businesses

CNN/ Newswire | 8/20/2020, 11:10 a.m.
Delays in mail delivered by the United States Postal Service have impacted veterans waiting to receive their medication and threatened …
Morgan Harris, owner of Green Bambino in Oklahoma City, Oklahoma, worries delays at the post office will hurt her baby store./Credit: Courtesy Morgan Harris

By Nathaniel Meyersohn, CNN Business

(CNN) -- Delays in mail delivered by the United States Postal Service have impacted veterans waiting to receive their medication and threatened mail-in voting in November. They're also hurting America's small businesses.

The Postal Service has tried to reduce costs in recent months with changes such as cutting staff hours and eliminating overtime pay. The moves have resulted in mail delays around the country. President Donald Trump has also said he opposes much-needed funding for the agency because he doesn't want to see it used for mail-in voting in the November elections.

The delays have been devastating to small businesses that have come to rely on the post office to get their products to consumers.

The Postal Service is the most commonly-used delivery carrier among businesses with fewer than five employees, according to the National Small Business Association, a trade group. A Postal Service Inspector General report in 2019, found that 70% of businesses with fewer than 10 employees said they had used the Postal Service in the prior six months.

The postal delays have "made me question how I do business," said Dana Osborne, a wedding and special events card designer in Omaha, Nebraska. Osborne relies on the Postal Service to deliver her supplies to make her customized invitations and to ship out the finished cards to clients.

She needs everything delivered on time to meet her clients' tight deadlines, but Postal Service delays have scrambled her business. Packages from print shops and paper and ribbon vendors have been arriving days late, and it's taking longer for the wedding invites she has designed for clients to arrive at their homes. The delays have forced her to alert her fall wedding clients that she's running behind schedule.

"It throws a curveball at me when it comes to getting things to my clients" in a timely manner, Osborne, 39, said. She is considering starting to design invites earlier than usual and advising couples to mail out invitations a month earlier than normal.

While larger retailers often have their own delivery networks or contracts with carriers such as UPS and FedEx, small businesses tap USPS' lower rates to ship orders to customers, especially in rural areas where other carriers refuse to deliver.

"The USPS—while certainly far from perfect—has a leveling effect on commerce, ensuring that even the smallest, home-based businesses can serve and have access to their customers," Molly Day, spokesperson for the National Small Business Association, said in an email.

Many small businesses struggling to stay afloat have also increased their online orders during the pandemic as fewer customers go into physical stores. Delays to customers' orders threaten to choke off this growing part of the business.

"These delays are life-threatening for many small businesses," said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, an advocacy group that opposes concentrated economic power in communities. "They're already struggling to survive the worst crisis that's hit Main Street in our lifetimes, and now the Trump administration is making it that much harder to carry on."

A spokesperson for the Postal Service said in an email that it has "experienced some temporary service disruptions in a few locations domestically, due to the Covid-19 pandemic." The spokesperson added that "things are slowly getting back to normal" and that the Postal Service would "continue to leverage our available resources to match the increased workload, including hiring based on local needs."

On the arts and craft marketplace Etsy, more than 90% of independent sellers use USPS to deliver their items to customers.

"USPS is particularly important for our sellers who live in rural communities, where USPS may be the only carrier available to them," Etsy CEO Josh Silverman wrote in an open letter to Congress last month urging lawmakers to provide emergency funding to the Postal Service.

In Deer Park, Illinois, Mauricio Romy, 31, the owner of Happki, a specialty toy seller for young kids and adults that started online and opened its first store last year, recently started getting complaints from customers that toys had not arrived yet from USPS.

In Romy's business, it's important that packages arrive on time for special occasions: "We have an obligation to our customers for birthdays and baby showers," he said. "I take it really personal."

He said he had to apologize to one customer who ordered a guitar bag for her nephew and the shipment was delayed.

Other small business owners say the Postal Service helps them compete against Amazon and larger retailers online, and they worry delays will lead to negative reviews and push more customers to shop at larger stores.

Morgan Harris, 40, owner of Green Bambino, a boutique baby store in Oklahoma City, Oklahoma, that sells items like toys, clothes and car seats, ships 90% of customers' online orders from a post office located 900 feet from the store.

"The post office is affordable and fast and allows me to provide good customer service," she said.

Although customers have not complained about shipping delays from her store, she believes they will switch over to Amazon if they can't get deliveries from Green Bambino in a timely fashion.

"If I have to tell a customer 'we'll ship it to you, but it's going to take two weeks,' they'll say 'no thanks," she said. "I can compete, but if the post office is taking a week or two weeks, I'm going to lose customers through absolutely no fault of my own."

In Lancaster, Ohio, Patti Riordan, 63, who owns Smoke Stack Hobby Shop with her husband, said USPS helps the store compete with larger retailers by offering the business affordable shipping rates. The shop sells items such as model trains and remote control planes and helicopters.

The shop is "too small to get favorable shipping rates from UPS or FedEx," she said, and the store would have to raise prices on customers to ship through these carriers. She believes customers wouldn't buy from her shop if this happened.

"There are large retailers whose shipping scenario is just a rounding error for them. Small businesses are not in the same situation. We just do not have that leverage," she said. "USPS becomes an equalizer."

CNN's Kristen Holmes and Veronica Stracqualursi contributed to this article.