The U.S. Postal Service retreated on its plan to end Saturday mail delivery as a cost cutting measure. However, the Postal Service says it’s not possible to meet its goals for reduced spending without altering the delivery schedule.
That announcement was risky. The agency was asking Congress to drop from legislation the longtime ban on five-day-only delivery. This should come as welcome news to small business owners, the elderly, and countless other Americans who would have suffered if the Postal Service cut back on its deliveries.
While eliminating Saturday service was seen as a possible cost cutting move, one study said reducing deliveries would hurt the postal system’s bottom line by driving mail out of the system and lowering revenue.
The Postal Service has not said how it plans to meet its reduced spending goals yet, instead saying they would wait until Congress passes legislation that gives the agency “the authority to implement a financially appropriate and responsible delivery schedule.”
The Postal Service already is executing a major restructuring throughout its retail, delivery and mail processing operations. Since 2006, it has reduced annual costs by approximately $15 billion, cut its workforce by 193,000 or 28 percent, and consolidated more than 200 mail processing locations.
In 2006, Congress mandated that the Postal Service pre-fund future retiree health benefits for decades to decades into the future, and pay for it within 10 years. No other agency or company is required to pre-fund, and this mandate accounts for more than 80 percent of all postal red ink – $11 billion last year alone.