The US Postal Service has had its' share of financial challenges in recent years. The Post Office, at one point was losing $25 million per day. The mail giant had to make some pivotal decisions for its' literal survival and it appears this past week, it did.
CNNMoney has reported the US Postal Service has announced it will end Saturday delivery service of first class mail as of August 13th of this year. The company will stop delivering and collecting other types of mail as well. However, it will continue performing package deliveries. The new service change will begin to save the US Postal Service $2 billion per year. Postmaster general and CEO Patrick Donahoe stated, "It's a responsible decision. It makes common sense". The USPS has been providing Saturday delivery service to US citizens since 1863.
The USPS will pursue to handle the service change as best as it can. The report stated 22,500 jobs will be affected by ending Saturday service. The company is opting to eliminate overtime, increase use part-time employees, and offer buyouts, opposed to resorting to a layoff strategy. There will be no changes to offices that are currently open on Saturdays and they will still conduct po box deliveries. The USPS understands that its' employees need to keep their jobs.
The service cut comes as a result of the financial downward spiral and losses the USPS has incurred since 2006. The root cause of their current state is its' government mandate to pre-funded health benefits for future retires, which amounts to $5.5 billion due each year. In 2012, the company defaulted on $11 billion and hit the ceiling on their US Treasury $15 billion credit limit. Congress did discuss a new five-year plan, which included ending the billion dollar reoccurring payment, however, there has been no resolve thus far. The Postal Service went from no debt in 2005, to $25 million per day in losses as of last year. They could no longer wait on the government and acted now.
First-class mail volume for the USPS has decreased 25% since 2006, and is forecasted to continue to decline. The US Postal Service is seeking other ways for sales growth. The mailing company is currently testing same-day delivery via Metro Post in San Francisco in hopes to gain ground in another service market. It is no secret same-day delivery is a viable option that customers desire and it works. However, with the USPS not providing Saturday deliveries, the question who will customers and business shippers turn to for their mailing service needs.
Same-day courier services like A-1 Express can assist individuals and businesses make their Saturday mail deliveries. The San Diego courier offers same-day delivery mail solutions from small packages to palletized freight fast. With their courier expertise and route optimization, A-1 Express is able to help companies make a seamless transition from usage of the Postal Services' Saturday delivery service. A courier can meet the increased customer Saturday delivery demand that is coming once the USPS ends their service in August.
Reference: 2.6.13, CNN Money, Jennifer Liberto, Postal Service to end Saturday mail service Aug. 5