The United States Postal Service (USPS) today announced a new delivery schedule that will affect businesses and consumers across the country. Starting in August, the USPS will end Saturday mail delivery to U.S. residents. Packages will still be delivered Monday through Saturday, as will all mail addressed to P.O boxes, but letters to home and business addresses will not be arriving on weekends. The USPS estimates this change will save the beleaguered service up to $2 billion annually.
Today’s announcement comes as little surprise to most industry analysts. The postal service has been losing money for years, due in part to an increased use of Internet services by consumers and competition from UPS and FedEx. The USPS lost $5.1 billion in 2011 and $15.9 billion in 2012, and it is estimated that the operation loses $25 million daily. The service has also repeatedly defaulted on payments to its retiree funds totaling more than $11 billion.
“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,” said Patrick R. Donahoe, Postmaster General and CEO. “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 has been advocating an end to Saturday delivery for years, an initiative that picked up steam when it was endorsed by President Obama in September 2011. Although parcel shipments would have been cut for Saturdays, the USPS has decided to keep package delivery a six-day service, citing a 14 percent increase in volume since 2010.
Over the past two years, the USPS has taken several measures to stop hemorrhaging money and stave off insolvency: closing mailing centers and eliminating jobs; offering to buy out contracts; increasing shipping rates; slowing first-class mail service; and increasing the price of stamps in 2011 and 2012. More than 200 mail processing centers have closed since 2006, and nearly 200,000 postal service jobs have been cut.
Following the change, post office locations that are currently open for Saturday service will remain open to customers looking to check P.O. boxes or buy stamps, envelopes and other products. Whether the offices or employees will see reduced hours is currently unknown.
According to Donahoe, “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.” The USPS cited independent market research stating that almost 70 percent of Americans endorse a switch to five-day service, even though many outspoken voices are critical of the plan due to the damage it could cause to small businesses dependent upon Saturday delivery for checks and financial documents.
The change in service, which is slated to begin on August 5, 2013, is not guaranteed. Several members of congress have expressed concern over the plan, and some question the postal service’s ability to make decisions like this for itself. As a service mandated by the U.S. Constitution, the postal service is a semi-governmental agency and subject to congressional oversight. The future of the USPS delivery schedule is still uncertain as lawmakers could pass legislation mandating all post offices provide full six-day service.
