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Last updated: February 6, 2013 5:23 pm
The US Postal Service is preparing to end Saturday mail delivery starting in early August, in a move that aims to save about $2bn a year and help improve the agency’s dire financial position.
Over the past few years, the Postal Service has been hammered by the recession and weak recovery which caused a cyclical drop in demand, but most importantly by big structural changes such as the broader use of online billing.
A big drag on its finances is also a legal requirement enacted in 2006 forcing it to make about $5.5bn in annual payments to a future retiree healthcare fund.
Last year, the USPS lost almost $16bn, triggering widespread speculation that its business model would have be radically rethought if the mail service is to avoid bankruptcy.
Legislation has been proposed to cut Saturday mail service in recent years but never advanced, and the USPS is now moving ahead with the plan regardless of congressional approval.
“When you lose the first class volume that we’ve seen, you can’t make ends meet from a financial standpoint,” said Patrick Donahoe, the postmaster general, at a briefing with reporters on Wednesday.
“The choice is either change some of the services or raise prices. People don’t want prices raised [so] we’ll make the changes in service,” Mr Donahoe added.
The end of Saturday mail – which Mr Donahoe noted had been around since the 1860s – would not affect package delivery, which would continue six days a week.
The big changes we’ve made in our system over the years, people accept.
- Patrick Donahoe, postmaster general
The end of Saturday delivery could trigger a backlash among advocates of rural and elderly voters who still depend heavily on regular mail. But polls in recent years have shown most Americans to be supportive of the move.
Mr Donahoe said that in the 1950s mail was delivered twice a day – and the transition to a once a day service was ultimately embraced. “The big changes we’ve made in our system over the years, people accept,” he said.
Tom Carper, a Democratic senator from Delaware and chairman of the government affairs committee in the upper chamber, said he was “disappointed” by the move but did not blame Mr Donahoe for pressing ahead.
“It’s hard to condemn the postmaster general for moving aggressively to do what he believes he can and must do to keep the lights on at the Postal Service, which may be only months away from insolvency,” Mr Carper said.
But Susan Collins, a Republican senator from Maine, which has a large rural population, said on Twitter that the decision “is inconsistent with current law and threatens to further jeopardize its customer base”.
The USPS is self-funded, but is subject to rigid constraints from Congress in its management – since its long-term pension and workers compensations benefits are tied to the federal budget. The Postal Service has in recent years cut back on delivery routes and consolidated facilities, while cutting a big chunk of its workforce through attrition.
Mr Donahoe said 22,500 jobs would be sacrificed in the shift to five-day mail service, but this too would involve attrition, buyouts and changes to part-time work rather than lay-offs.
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