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USPS To Halt Saturday Delivery

By The NonProfit Times - February 6, 2013

The United States Postal Service (USPS) announced today that it will end mail delivery on Saturdays, starting the week of Aug. 5. Packages will continue to be delivered six days a week.

The plan is expected to achieve savings of $2 billion annually when fully implemented through a combination of employee reassignments and attrition. Mail would no longer be delivered to homes and businesses on Saturday but it would still be sent to post office boxes, allowing customers to pick up their mail at post offices, which will remain open on Saturdays.

“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 and CEO of the USPS, said in a statement. “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 Board of Governors last month directed management to accelerate the restructuring of operations to strengthen finances, according to the USPS. Since 2010, package delivery has increased by 14 percent, USPS officials say, while the delivery of letters and other mail has declined as the use of email and other Internet services has increased.

The Postal Service reported in November that it had a record annual loss of $15.9 billion for the last budget year and predicted more losses in 2013. It was more bad news for the service in a year that it was forced to default on billions in retiree health benefit payments to avoid bankruptcy. It was those health benefits, which Congress imposed on the agency in 2006, that made up most — $11.1 billion – of the losses. The USPS would have sustained an operating loss of $2.4 billion, lower than the previous year, if not for the health benefit payments.

Donahoe noted in his statement that the plan also has the support of the American people. Postal Service market research as well as other studies indicated that nearly 7 in 10 Americans support the switch to a five-day delivery as a way to reduce costs. “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,” he said.

The plan has the support of the Washington, D.C.-based Alliance of Nonprofit Mailers (ANM). “As far as nonprofits are concerned, given USPS’s dire situation, and decline of mail volume, this is an adjustment that we can adapt to and support,” said Tony Conway, the organization’s executive director. “The savings they will get are substantial given their situation,” he said, noting that this method of savings is much preferred over another increase in postage rates.

Conway was skeptical whether the plan could be instituted by August and it’s unclear whether USPS has the legal authority to go forward with their plan without congressional approval. “Congress will certainly be involved with this in the coming weeks to determine that,” he said, noting that it’s possible the proposed plan could violate a rider that has existed since 1983 that requires the USPS the maintain delivery schedules as they existed in that year.

In a statement released later in the day on Tuesday, Conway stated that the organization was pleased that the plan was not an “all-or-nothing proposal,” noting that packages would still be delivered on Saturdays, and that post offices would remain open on those days.

The change in the delivery schedule will be just one of the changes the Postal Service needs to restore the fiscal health of the agency, Donahoe said. USPS plans to continue to press Congress for legislation that will give them greater flexibility to control costs and generate new revenues.

The USPS had previously lobbied Congress to approve a shift to five-day delivery for both mail and packages, and at least two lawmakers support the agency’s newest proposal. In a letter to both houses of Congress, House Oversight and Government Reform Committee Chairman Rep. Darrell Issa (R-Calif.) and Senate Homeland Security and Governmental Affairs Ranking Member Tom Coburn (R-Okla.), said they supported the changes.

“In his recent inaugural address, President Obama spoke about the need to find real solutions to our nation’s problems,” the congressman wrote. “Supporting the U.S. Postal Service’s plan to move forward with five-day mail delivery is one such solution worthy of bipartisan support.” The two lawmakers also pointed out that the president has repeatedly called for a five-day mail delivery schedule, most recently in his Fiscal Year 2013 budget.

Homeland Security and Governmental Affairs Chairman Tom Carper (D-Del.) was disappointed, saying that the piecemeal approach to solving the Postal Service’s problems is not the way to go. “While I welcome the Postal Service’s intention to preserve Saturday package delivery, I would much prefer that any effort to move to a five-day mail delivery schedule occur in an orderly manner similar to the process the Senate approved last year,” he said. “The financial challenges that have been building at the Postal Service for years are eminently solvable, yet Congress has failed at every turn to come to consensus around a set of effective reforms.”

Carper plans to make postal reform a priority for the 113th Congress after negotiations on financial and operational reforms at the Postal Service ran out of time in the last Congressional session. He will be hosting a hearing on Feb. 13 at 10:00 a.m. entitled “Solutions to the Crisis Facing the U.S. Postal Service.”

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