Say goodbye to Saturday letter delivery.
On Wednesday the U.S. Postal Service announced that it plans to end Saturday letter delivery beginning Aug. 1, in one of the most drastic steps it has taken to date to cut costs on a struggling agency. After losing almost $16 billion last year, the 237-year-old institution has already reached its borrowing limit and is now operating with little cash on hand.
In November, the agency reported an annual loss of $15.9 billion for the last budgeted year and forecasted it would lose even more in 2013. Therefore the financial losses for the fiscal year are more than triple the $5.1 billion loss in 2011.
This is due in part to the new digital age where most people use email as a form of communication and pay their bills online.
But another stressing factor has been the budget for USPS’s retiree health benefits. Unlike all other federal agencies, the USPS is now required by Congress to set aside millions to cover future medical costs for retirees. This drained the agency’s accounts and forced them into default in order to avoid bankruptcy.
Under the new plan, the postal service will continue to deliver mail to homes and business Monday through Friday, but come Saturday only post office boxes and packages will be delivered.
Post offices that currently open on Saturdays will remain open under the new plan.
“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,” Patrick Donahoe, postmaster general, said Wednesday.
The postal service’s decision should come as no surprise—for the past few years it has been advocating for a five-day delivery schedule, but its appeal to Congress has been unsuccessful. Announcing the end of Saturday delivery as an organization sidesteps Congressional approval but a recent report by the Congressional Research Services suggests there is nothing in the Constitution that requires six-day deliveries.
Nevertheless, the announcement drew criticism from Senator Mark Pryor, D-Ark., who said the USPS needed Congressional approval before making such a drastic cut.
“They need to consider alternative measures, such as capping the salaries of their top executives or eliminating bonuses, before making changes that would hurt rural communities who depend on the Postal Service for commerce, news, and necessary goods,” Pryor said in a statement Wednesday.
Since 2006, the USPS has cut annual costs by about $15 billion, reduced the size of the current workflow by 28%, and consolidated more than 200 locations.
In 2011, the U.S. Postal Service closed branches that had little foot traffic and were in rural areas, these closures had drastic effects on those communities. However unpopular the closures were, the Postal Service’s own research showed that 7 out of 10 Americans support a five day postal work week. A recent Quinnipiac University poll also showed that 79% of Americans support ending Saturday mail delivery.
Postmaster Donahoe said, “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.” Thus, by giving Americans a six month notice, they are trying to give residents and businesses time to plan and adjust.