The beleaguered United States Post Office (USPS) is making a reasonable business move in their latest announcement. I agree with canceling Saturday mail delivery. The surprising part is the news that packages will still be delivered on Saturday, just not first class mail.
We have all been hearing about the budget shortfalls facing the USPS for years. People not writing letters due to technology, competition from UPS and Fedex, and spiraling costs due to generous defined benefit pensions are all responsible for the budgeting problems.
The United States Postal Service announced plans today to transition to a new delivery schedule during the week of Aug. 5, 2013 that includes package delivery Monday through Saturday, and mail delivery Monday through Friday. The Postal Service expects to generate cost savings of approximately $2 billion annually, once the plan is fully implemented.
“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,” said Patrick R. Donahoe, Postmaster General and CEO. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”
The Postal Service is currently implementing major restructuring throughout its retail, delivery and mail processing operations. Since 2006, the Postal Service has reduced its annual cost base by approximately $15 billion, reduced the size of its career workforce by 193,000 or 28 percent, and has consolidated more than 200 mail processing locations. During these unprecedented initiatives, the Postal Service continued to deliver record high levels of service to its customers.
The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.