Starting Aug. 5, the U.S. Postal Service will discontinue Saturday mail delivery in favor of a Monday-through-Friday schedule at an estimated annual savings of $2 billion.
USPS ended fiscal-year 2012 with a $15.9 billion loss.
The Postal Service’s strong recent growth in package delivery, supported by e-commerce sales, convinced authorities to keep a six-day delivery schedule for packages. USPS has seen a 14-percent rise in package volumes in the past two years. Mail will also be delivered to P.O. Boxes on the same schedule.
Postmaster General Patrick R. Donahoe put the blame for the delivery shift at the feet of email and other communication technologies.
“The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits,” he said in a statement. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”
According to research cited in a USPS news release, nearly 70 percent of Americans surveyed support a switch to a five-day mail week.
The Postal Service, which is a government agency, has lobbied for a five-day delivery schedule before and has also called on Congress to enact sweeping changes to the U.S. mail program. Reports suggested Congress may have to approve this latest move.
USPS has been weighed down by financial difficulties for the past few years, and officials have made a number of changes in order to improve the company’s financial outlook. The Postal Service board of governors convened earlier this month, directing management to speed up the restructuring process and focusing on reducing more costs. USPS continues to cut retail, delivery and processing services in an effort that has reduced its annual cost base by $15 billion since 2006. In that same period, USPS’ workforce has been winnowed down by 24 percent.
Retirement funding that works on a pre-paid basis has continued to be an issue for USPS, causing it to recently default on $11.1 billion in retirement obligations. By fiscal year 2017, the Post Office will be required to pay $33.9 billion toward retiree benefits.
Officials are currently pursuing other forms of revenue generation, such as an increase in government contracts. In 2012, the Postal Service’s government revenue came to $4.8 million, vastly outpaced by FedEx’s $190.1 million and UPS’ $138.7 million. - Jon Ross