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I’ve written in the past about the financial difficulties that the US Postal Service has been dealing with. They’ve been raising stamp prices annually, they’ve closed a bunch of locations, and have been looking for more ways to save.
Despite these changes, they’re still bleeding money. They lost $8.5B in 2010, $5.5B in 2011 (that low number was thanks to legislation postponing Congressionally-mandated pre-funding of pension obligations), and $15.6B in 2012. The way things have been going, they’re projected to lose a whopping $21B in 2016.
Not good. According to Postmaster General and USPS CEO Patrick Donahoe, “Our financial condition is urgent.” And so they’ve decided to drop Saturday delivery in hopes of savings ca. $2B annually.
To make this happen, they’ve had to resort to a bit of trickery. You see, despite being an independent agency that gets no tax dollars whatsoever, they’re still under Congressional control. And Congress won’t let them drop their six-day-a-week service.
For the record, Congress is also forcing them to pre-fund their pension obligations to the tune of $5.5B annually which isn’t exactly helping their financial situation.
Anyway, to make this work they’ve decided to stop regular mail delivery on Saturdays, but to continue delivering packages. This apparently satisfies the Congressional requirement of six-day-a-week service while saving a bunch of money.
According to the USPS, this also plays to their strengths, as package delivery is growing while regular mail delivery is shrinking. Will this be enough to save the Post Office? Probably not. After all, we’re talking about $2B in savings vs. a $15B (and growing) deficit.
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