The United States Postal Service announced today that they plan on eliminating Saturday mail delivery by August, 2013. They do plan to continue delivering packages.
The Postal Service has been struggling financially for a number of years. Revenue for the service has decreased at least 25% since 2006 and has operated with an annual loss of $2-16 billion in the last four years.
This decision is projected to save approximately $2 billion a year. Congress can force the Postal Service to continue Saturday deliveries and has done so in the past. But, given the Federal government's current fiscal situation, this announcement seems to have been met more favorably by Congress.
"This common-sense reform would save the Postal Service more than $2 billion annually," two top Republicans, Rep. Darrell Issa of California and Sen. Tom Coburn of Oklahoma, said in a statement.
"In his recent inaugural address, President Obama spoke about the need to find real solutions to our nation’s problems. Supporting the U.S. Postal Service's plan to move forward with 5-day mail delivery is one such solution worthy of bipartisan support," they said (http://lat.ms/WxT9eJ).
Postmaster General Patrick R. Donahoe believes that the American public is on the side of the Postal Service. In materials presented by Donahoe says that Postal Service market research and other research has indicate that nearly 7 in 10 Americans support the switch to five-day delivery as a way for the agency 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. "We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings" (http://lat.ms/WxT9eJ).
The slide into insolvency has picked up speed for the Postal Service. Losses were reported at $2.8 billion in 2008 and have gone downhill to $15.9 billion last year. In the same period, mail volume has flattened with between 3.3 to 3.5 billion packages being delivered annually.
But, costs have continued to increase, especially fuel costs for their delivery vehicles and pension, health care, personnel and administrative costs.
The Postal Service will continue to deliver packages on Saturdays. Package delivery is the only profitable and growing part of their business. Most Post Offices will remain open on Saturdays as well, but in smaller and more remote locations, hours will likely be curtailed.
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