The U.S. Postal Service is set to announce that it will discontinue Saturday mail delivery in a cost-saving measure that is expected to save the agency up to $2 billion per year. According to the Associated Press, package delivery will continue six days a week, but regular mail will be limited to Monday to Friday delivery.
The changes are slated to take place in August. Under the new plan, Saturday delivery to post office boxes will continue and post offices that are currently open on Saturdays will remain open.
Postmaster General and CEO of the U.S. Postal Service Patrick R. Donahoe is expected to make the announcement at a press conference scheduled for Wednesday afternoon. His office released a statement explaining that 7 in 10 Americans favor the reduced delivery days as a means of saving the agency money.
“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. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”
Package delivery has increased by 14 percent since 2010, say officials, whereas delivery of letters has declined as people increasingly rely on email and pay their bills online. By streamlining its operations, the Postal Service hopes to be able to compete with private parcel services like UPS and FedEx.
In November the agency reported a record-breaking annual loss of $15.9 billion and said that losses for 2013 are expected to be even higher. This came at the end of a year that saw the Postal Service defaulting on billions of dollars in retiree health benefits in order to stave off bankruptcy.
The agency has now reached its borrowing limit, but its financial problems do not in fact stem from decreased mail flow, but rather from a system set up by Congress in 2006 that forces the Postal Service to set aside $55 billion per year to cover future medical costs for retirees. According to the AP, no other government agency is forced to make such allowances for future employee health expenses.
Postal officials have asked Congress to address the inequity, but legislators adjourned last year before tackling the issue. As a result, the agency is taking on its own cost-cutting measures.
The U.S. Postal Service is currently in the midst of a massive restructuring throughout its retail, delivery and mail processing operations. Since 2006, it has reduced its annual costs by about $15 billion and cut its career workforce by about 193,000 jobs and consolidated more than 200 post office locations.
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