February 6, 2013
PDT Staff Writer
The United States Postal Service (USPS) announced on Wednesday, Feb. 6 that starting the week of Aug. 5 they would end Saturday delivery. The move is aimed to save the financially embattled agency $2 billion annually.
This comes on the heels of recent news that USPS would be altering the hours of 13,000 small rural post offices nationwide in an effort to save additional hours. Local offices changing hours include offices in Rarden, Otway, McDermott, Friendship, Franklin Furnace, Stout and South Portsmouth, Ky.
“The Postal Service is currently on an unsustainable financial path and must move forward with actions that are responsible and necessary,” said David Van Allen, USPS Corporate Communications.
According to information from USPS, they are making plans 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 change leaves the package delivery schedule unchanged.
According to released information, “over the past several years, the Postal Service has advocated shifting to a five-day delivery schedule for mail and packages. However, recent strong growth in package delivery (14 percent volume increase since 2010) and projections of continued strong package growth throughout the coming decade led to the revised approach to maintain package delivery six days per week.”
Patrick R. Donahoe, Postmaster General and CEO said in a released statement the changes will help reduce costs and assist the long-term financial stability of the agency.
“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,” said Donahoe in a released statement. “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.”
It’s anticipated that mail to post office boxes will continue to be delivered six days a week and post offices currently open on Saturdays will maintain their hours once the plan is fully implemented.
Donahoe stressed that legislative change is also needed to help return the postal system to financial stability.
“While the change in the delivery schedule announced today is one of the actions needed to restore the financial health of the Postal Service, legislative change is urgently needed to address matters outside the Postal Service’s control. The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue and encourages the 113th Congress to make postal reform legislation an urgent priority,” Donahoe said.
Ohio Senator Rob Portman said in a released statement, “a steep drop in mail volumes and poor fiscal management have landed USPS in a very tough spot. Last year alone, the Postal Service ran a deficit of $16 billion, and without cost-saving reforms American taxpayers will be stuck with the bill. I am still studying how the service change announced today will be implemented, but fiscal reforms are clearly necessary to save the Postal Service and protect taxpayers from being on the hook for another bailout.”
According to the Associated Press, the financial losses for the fiscal year ending Sept. 30, 2012 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.
According to information provided by the post office, “the Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.”
For more information about the United States Post Office visit, www.usps.com.
The Associated Press contributed to this story.
Wayne Allen may be reached at 740-353-3101, ext. 228, or email@example.com.