According to a variety of news sources, the US Postal Service announced on Wednesday, February 6 that it will cease delivering first class letters and other mail on Saturdays beginning August 5, 2013. It will continue to deliver priority and express mail, packages, and mail order prescriptions. The move is designed to save the agency approximately $2 billion per year, which still falls far short of the tens of billions it needs to cut.
This is part of the overall cost cutting efforts the USPS has undertaken and was triggered by the default at midnight, February 6, 2013 on a $5.5 billion, according to a report first broken by CBS News. The money is required to fund health benefits to future retirees. This is not the first time the organization has defaulted on a payment. Last year it defaulted $11 billion worth of payments and also ran through its line of credit from the US Treasury in the amount of $15 billion.
It is unclear whether the USPS actually has the authority to stop Saturday deliveries because it has previously said that approval from Congress would be necessary to do so. It has been seeking that permission for quite some time, but Congress has been reluctant to grant that permission. Although it is an agency of the US government, it operates on a business model more like a private corporation. The USPS does not receive any tax dollars for operating expenses, but must rely on the income from its sales and services.
Speaking about the decision to cut first class service on Saturdays, Postmaster General Patrick R. Donahoe said: “Our customers see strong value in the national delivery platform we provide and maintaining a six-day delivery schedule for packages is an important part of that platform. As consumers increasingly use and rely on delivery services—especially due to the rise of e-commerce—we can play an increasingly vital role as a delivery provider of choice, and as a driver of growth opportunities for America’s businesses.”
The agency announced the move six months early in order to give its customers time to adjust to the new five-day delivery schedule. This also gives mailers time to explain the details to their customers and to modify their production schedules accordingly.
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We will update this story as more details become available.