WASHINGTON — The U.S. Postal Service will stop delivering
mail on Saturdays but continue to deliver packages six days a week under
a plan aimed at saving about $2 billion annually, the financially
struggling agency says.
In an announcement scheduled for later Wednesday, the service is
expected to say the Saturday mail cutback would begin in August.
The move accentuates one of the agency's strong points –
package delivery has increased by 14 percent since 2010, officials say,
while the delivery of letters and other mail has declined with the
increasing use of email and other Internet services.
Under the new plan, mail would be delivered to homes and businesses
only from Monday through Friday, but would still be delivered to post
office boxes on Saturdays. Post offices now open on Saturdays would
remain open on Saturdays.
Over the past several years, the Postal Service has advocated
shifting to a five-day delivery schedule for mail and packages – and it
repeatedly but unsuccessfully appealed to Congress to approve the move.
Though an independent agency, the service gets no tax dollars for its
day-to-day operations but is subject to congressional control.
It was not immediately clear how the service could eliminate Saturday mail without congressional approval.
But the agency clearly thinks it has a majority of the American public on its side regarding the change.
Material prepared for the Wednesday press conference by Patrick R.
Donahoe, postmaster general and CEO, says Postal Service market research
and other research has indicated that nearly 7 in 10 Americans support
the switch to five-day delivery as a way for the Postal Service 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 in a statement prepared for the
announcement. "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 making the announcement Wednesday, more than six
months before the switch, to give residential and business customers
time to plan and adjust, the statement 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," Donahoe said. "The
Postal Service has a responsibility to take the steps necessary to
return to long-term financial stability and ensure the continued
affordability of the U.S. Mail."
He said the change would mean a combination of employee reassignment
and attrition and is expected to achieve cost savings of approximately
$2 billion annually when fully implemented.
The agency in November reported an annual loss of a record $15.9
billion for the last budget year and forecast more red ink in 2013,
capping a tumultuous year in which it was forced to default on billions
in retiree health benefit prepayments to avert bankruptcy.
The financial losses for the fiscal year ending Sept. 30 were more
than triple the $5.1 billion loss in the previous year. Having reached
its borrowing limit, the mail agency is operating with little cash on
hand.
The agency's biggest problem – and the majority of the red ink in
2012 – was not due to reduced mail flow but rather to mounting mandatory
costs for future retiree health benefits, which made up $11.1 billion
of the losses. Without that and other related labor expenses, the mail
agency sustained an operating loss of $2.4 billion, lower than the
previous year.
The health payments are a requirement imposed by Congress in 2006
that the post office set aside $55 billion in an account to cover future
medical costs for retirees. The idea was to put $5.5 billion a year
into the account for 10 years. That's $5.5 billion the post office
doesn't have.
No other government agency is required to make such a payment for
future medical benefits. Postal authorities wanted Congress to address
the issue last year, but lawmakers finished their session without
getting it done. So officials are moving ahead to accelerate their own
plan for cost-cutting.
The Postal Service is in the midst of a major restructuring
throughout its retail, delivery and mail processing operations. Since
2006, it has cut annual costs by about $15 billion, reduced the size of
its career workforce by 193,000 or by 28 percent, and has consolidated
more than 200 mail processing locations, officials say.
They say that while the change in the delivery schedule announced
Wednesday is one of the actions needed to restore the financial health
of the service, they still urgently need lawmakers to act. Officials say
they continue to press for legislation that will give them greater
flexibility to control costs and make new revenues.
Credit : Huffington Post
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