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U.S. Postal Service to cut Saturday delivery

United States Postal Service Letter Carrier Lakesha Dortch-Hardy delivers mail in Chicago in this file photo taken November 29, 2012. The U.S. Postal Service is planning to drop Saturday delivery of first-class mail, a congressional source said on Wednesday. The cash-strapped mail agency will still deliver packages, said the source, who is familiar with the matter but not authorized to speak on the record.

United States Postal Service Letter Carrier Lakesha Dortch-Hardy delivers mail in Chicago in this file photo taken November 29, 2012. The U.S. Postal Service is planning to drop Saturday delivery of first-class mail, a congressional source said on Wednesday. The cash-strapped mail agency will still deliver packages, said the source, who is familiar with the matter but not authorized to speak on the record.

WASHINGTON — The U.S. Postal Service will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion annually, the financially struggling agency says.

In an announcement scheduled for later Wednesday, the service is expected to say the Saturday mail cutback would begin in August.

The move accentuates one of the agency's strong points — package delivery has increased by 14 percent since 2010, officials say, while the delivery of letters and other mail has declined with the increasing use of email and other Internet services.

Under the new plan, mail would be delivered to homes and businesses only from Monday through Friday, but would still be delivered to post office boxes on Saturdays. Post offices now open on Saturdays would remain open on Saturdays.

Over the past several years, the Postal Service has advocated shifting to a five-day delivery schedule for mail and packages — and it repeatedly but unsuccessfully appealed to Congress to approve the move. Though an independent agency, the service gets no tax dollars for its day-to-day operations but is subject to congressional control.

It was not immediately clear how the service could eliminate Saturday mail without congressional approval.

But the agency clearly thinks it has a majority of the American public on its side regarding the change.

Material prepared for the Wednesday press conference by Patrick R. Donahoe, postmaster general and CEO, says Postal Service market research and other research has indicated that nearly 7 in 10 Americans support the switch to five-day delivery as a way for the Postal Service to reduce costs.

"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," Donahoe said in a statement prepared for the announcement. "We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings."

The Postal Service is making the announcement Wednesday, more than six months before the switch, to give residential and business customers time to plan and adjust, the statement said.

"The American public understands the financial challenges of the Postal Service and supports these steps as a responsible and reasonable approach to improving our financial situation," Donahoe said. "The Postal Service has a responsibility to take the steps necessary to return to long-term financial stability and ensure the continued affordability of the U.S. Mail."

He said the change would mean a combination of employee reassignment and attrition and is expected to achieve cost savings of approximately $2 billion annually when fully implemented.

The agency in November reported an annual loss of a record $15.9 billion for the last budget year and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on billions in retiree health benefit prepayments to avert bankruptcy.

The financial losses for the fiscal year ending Sept. 30 were more than triple the $5.1 billion loss in the previous year. Having reached its borrowing limit, the mail agency is operating with little cash on hand.

The agency's biggest problem — and the majority of the red ink in 2012 — was not due to reduced mail flow but rather to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.

The health payments are a requirement imposed by Congress in 2006 that the post office set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years. That's $5.5 billion the post office doesn't have.

No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but lawmakers finished their session without getting it done. So officials are moving ahead to accelerate their own plan for cost-cutting.

The Postal Service is in the midst of a major restructuring throughout its retail, delivery and mail processing operations. Since 2006, it has cut annual costs by about $15 billion, reduced the size of its career workforce by 193,000 or by 28 percent, and has consolidated more than 200 mail processing locations, officials say.

They say that while the change in the delivery schedule announced Wednesday is one of the actions needed to restore the financial health of the service, they still urgently need lawmakers to act. Officials say they continue to press for legislation that will give them greater flexibility to control costs and make new revenues.

Comments

John 1 year, 7 months ago

The USPS has a major financial issue and drastic measures need to be taken, there has been prices increases on all mail services the last two year but the USPS get deeper in debt - the latest a 1 cent increase on stamps and about a 4% increase on all other services, Priority Mail, Parcel Post ,etc. Why not cut all deliveries on Saturday period? Oh, the UNION doesn't want that to happen - from here that is too bad- get real UNION. They could cut out Thursday deliveries as well as I get 100% junk mail on that day & that stuff get deep sixed immediately & never read. The USPS blames the internet but they don't say that the internet helps increase there postage sales - all that stuff bought on the 'net has to be shipped by somebody. The issue is teh USPS is like all other government organization is they are note very efficent and full of "feather bedding" (younger people will have to do a Google on the meaning of that term)

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Del 1 year, 7 months ago

Shut em down or Privatize...It's the only way to fix the problem

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