SIOUX FALLS — The U.S. Postal Service has agreed to “pause” until at least next year a controversial plan to downgrade post office operations in Sioux Falls and Huron to local processing centers, joining similar implementation delays in other states.

The original Sioux Falls plan, finalized April 30 by Postmaster General Louis DeJoy, involved shifting non-local mail operations in South Dakota’s largest city to a facility in Omaha, Nebraska.

The reorganization sparked concerns about slower mail delivery to rural communities because letters and packages formerly processed and sent from Sioux Falls will be routed through Omaha, 160 miles away.

Similar concerns were voiced in February, when the USPS finalized a decision to downgrade its Huron facility to a local processing center, moving all non-local processing to Fargo, North Dakota.

South Dakota Sen. Mike Rounds joined 26 senators in sending a bipartisan letter to DeJoy on May 8 urging a pause in implementing the plans, adding that the USPS should not make "irrevocable changes to its processing and delivery network."

DeJoy responded with a May 9 letter to Michigan Sen. Gary Peters, the Democratic chairman of the Homeland Security and Government Affairs Committee. DeJoy agreed to “pause the movement of processing operations associated with the mail processing facility reviews” until at least Jan. 1, 2025.

“Even then,” DeJoy wrote Peters, “we will not advance these efforts without advising you of our plans to do so, and then only at a moderated pace of implementation.”

Rounds heralded the move Monday on his Twitter page, saying that "this is a step in the right direction to protecting rural mail services across our state."

The Sioux Falls downtown facility is currently a processing and distribution center. The USPS plan called for it to remain open as a local processing center and receive “up to $12.75 million in upgrades,” including upgraded sorting equipment, new lighting and renovated bathrooms and break rooms.

In his letter, DeJoy made it clear that as part of the pause, “the positive investments in the facilities will also not commence, just as the annual cost savings associated with these mail moves will not be achieved while we pause.”

Jobs impacted in Sioux Falls

USPS expects the change would have impacted 35 non-managerial jobs and three management positions in Sioux Falls. Those jobs are protected by union contracts, but the employees would likely have had to shift to other facilities, said Todd West, president of the South Dakota chapter of the American Postal Workers Union.

Mark Inglett, a USPS spokesman based in Kansas City, told News Watch when the plan was finalized that there was no set timetable for implementation.

Service times for first-class mail are already trending downward in South Dakota, Iowa and Nebraska, according to USPS data. The on-time rate for fiscal year 2024 is 81.4%, compared to 86.8% at the same time last year.

The planned reorganization was part of a $40 billion “Delivering for America” investment strategy spearheaded by DeJoy, who was appointed by former President Donald Trump in June 2020.

It continues a trend from 2012, when the USPS closed processing centers in Aberdeen, Mobridge and Pierre, leaving South Dakota with facilities in Sioux Falls, Rapid City and Huron.

Postmaster general takes heat for USPS changes

The intent of the plan was to “upgrade and improve the USPS’s processing, transportation and delivery networks” in the face of changing mail habits and increased competition from package shipping companies.

In November 2023, the USPS announced it has lost $6.5 billion in the most recent fiscal year, despite its own projections that it would break even.

DeJoy cited inflation as a main cause of the poor performance and pointed to the ongoing restructuring as a positive step in turning things around.

“We are just in the early stages of one of the nation’s largest organizational transformations,” he said at the time.

The USPS on April 9 proposed an overall increase of nearly 8% on the price of postage, pending approval from a regulatory commission. Forever stamps would cost 73 cents instead of 68 cents under the proposal.

DeJoy was harshly criticized by U.S. senators at an April 14 oversight hearing that spotlighted mail delivery delays stemming from centralized USPS operations in the Atlanta area.

Democratic Sen. Jon Ossoff of Georgia cited statistics that showed on-time delivery rates of 36% and told DeJoy: “You’ve got weeks, not months, to fix this. And if you don’t fix it, I don’t think you’re fit for this job.”

This story was produced by South Dakota News Watch, an independent, nonprofit news organization. Read more in-depth stories at sdnewswatch.org and sign up for an email every few days to get stories as soon as they're published. Contact Stu Whitney at stu.whitney@sdnewswatch.org.