Financial Impacts Of USPS Cutting Saturday From Delivery
It’s official. As of August 1, 2013, the United States Postal Service will suspend its Saturday delivery and convert to a five-day work week for mail processing and delivering. The official announcement was made on Wednesday February 6, 2013.
The actual post office locations are most likely still going to be open on Saturdays so that people can drop off mail and packages for shipping, buy stamps, and access their post office boxes. Still, the hours of operation will likely be very limited. For the time being the post office will continue to deliver packages on Saturdays but individual and piece mail Saturday delivery is gone.
It’s a sticky subject because for a long time, in spite of the fact that it is an independent agency, the USPS has had its decision making tied up to Congress and would usually require a Congressional vote and mandate to be able to make this kind of decision. Congressional leaders in the GOP have expressed surprise to several news outlets that the Post Master General would make this final decision without their consent but they aren’t going to try to overturn it. It has been obvious for years to everyone that the USPS has been losing money at an alarming rate. Everyone from Mr. Peter Briger (the head of Fisher Investments and well versed in these kinds of business decisions) to the average American resident understands that.
The financial impact of this decision is going to be huge for everyone.
- The decision is slated to save the USPS two billion dollars over the next year.
- It should also significantly improve the profits of independent shipping companies like FedEx, UPS and even DHL.
Unfortunately, while it means savings and improved profits for big companies it can really hurt the individual mail carriers who will be losing a day of work. This will impact their pension plans and could even adversely affect their benefits packages if their benefits are tied to an average number of hours worked per week.
The simple fact is that the advent of email has really punched the USPS in the gut. Now people can communicate instantly. They don’t have to write letters and pay to send them through the mail. They are also choosing to receive things like bills and account statements electronically instead of via “snail mail.” This used to be the primary source of profits for the USPS. Now the majority of their profits come from the shipping of packages.
So what does this mean for you? It probably won’t change life very much for the average American citizen. You probably won’t even notice not getting a mail delivery on Saturday. For the USPS, however, this is just the first important step it has to take to keep itself viable. Time will tell what other changes will need to be made.
February 9th, 2013 at 3:19 pm
Undoubtedly, this was a move long coming. But I have to wonder how this is going to affect John Q. when combined with the shortening of billing grace periods? I often have bills come (mostly utilities) that have about a week between receiving the mail and the due date. And (I hear) credit cards are good at playing this kind of thing to their benefit. So what’s going to happen is more people are going to automatic online bill pay to avoid this, only to have the USPS get hurt further? Or will Big Brother step in and put restrictions on companies to prevent us getting skinned by late fees?