USPS to Implement Six-Day Package, Five-Day Mail

6 Feb

According to a variety of news sources, the US Postal Service (USPS) announced on Wednesday, February 6 that it will cease delivering first class letters and other mail on Saturdays beginning August 5, 2013. It will continue to deliver priority and express mail, packages, and mail order prescriptions.

Mail addressed to street addresses will be delivered Monday through Friday. Post Offices open on Saturdays will remain open and mail addressed to PO Boxes will be available for pickup on Saturdays.

The Postal Service continues to grow its shipping and package business as e-commerce retail sales continue to rise. With a 14‐percent growth in volume the last two years, the Postal Service feels justified in maintaining six days of package delivery. Also, by maintaining a six‐day package delivery schedule, the primary concerns related to switching to a five‐day mail delivery schedule have been addressed, such as the delivery of pharmaceutical drugs.

By implementing a six‐day package, five‐day mail delivery schedule, the Postal Service expects to save approximately $2 billion annually when fully implemented, which still falls far short of the tens of billions it needs to cut. This is part of the overall cost cutting efforts the USPS has undertaken and was triggered by the default at midnight, February 6, 2013 on a $5.5 billion payment, according to a report first broken by CBS News. The money is required to fund health benefits to future retirees. This is not the first time the organization has defaulted on a payment. Last year it defaulted $11.1 billion worth of payments and at one point exhausted its borrowing authority with the U.S. Treasury.

In its last fiscal year, the Postal Service recorded a $15.9 billion loss.

It is unclear whether the USPS actually has the authority to stop Saturday deliveries because it has previously said that approval from Congress would be necessary to do so. It has been seeking that permission for quite some time, but Congress has been reluctant to grant that permission. Although it is an agency of the US government, it operates on a business model more like a private corporation. The USPS does not receive any tax dollars for operating expenses, but must rely on the income from its sales and services.

Speaking about the decision to cut first class service on Saturdays, Postmaster General Patrick R. Donahoe said: “We are simply not in a financial position where we can continue to make six-day letter delivery.” The decision to halt Saturday delivery of most mail ends a 150 year tradition.

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