Leaders with the United States Postal Service announced Wednesday morning that they are eliminating regular mail delivery on Saturdays, but packages will still be delivered that day.
The move, which leaders will implement in August, is expected to save the struggling organization $2 billion a year.
Mail addressed to post office boxes will continue to be delivered on Saturdays. Post offices currently open on Saturdays will remain open on Saturdays.
“The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits,” Patrick R. Donahoe, postmaster general and CEO, said in a prepared statement. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”
At the end of January, USPS leaders said they were going forward with cost-cutting measures without Congress’ approval.
Officials have been waiting on postal reform for nearly two years.
Leaders recently reported that the USPS is losing $25 million a day.
USPS leaders have been considering moving to a five-day delivery schedule for a couple of years. But recently, package delivery has increased, and leaders predict it will continue to grow, so they decided to continue package delivery on Saturdays.
Package delivery has grown 14 percent since 2010, according to a USPS news release.
“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,” Donahoe said. “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.”
At one point in time, the USPS only had four days of cash-on-hand, and leaders need to generate nearly $20 billion in cost reductions and revenue to repay its debts.
The USPS ended the 2012 fiscal year with a record net loss of $15.9 billion and has been struggling the past two years, defaulting on mandated payments to prefund employee health benefits and facing declining amounts of first-class mail, which had been a big revenue boost in the past.
Since 2006, leaders have worked to cut costs. Through attrition, they have reduced the workforce by 193,000 people, Donahoe said in a news conference Wednesday.
The Postal Service is currently implementing major restructuring throughout its retail, delivery and mail-processing operations. Since 2006, the Postal Service has reduced its annual cost base by approximately $15 billion and has consolidated more than 200 mail-processing locations while still providing high-quality service, Donahoe said.
Donahoe also said that USPS research showed that 70 percent of Americans support the switch to a five-day delivery schedule so that the organization can return to profitability.
And USPS leaders announced the move Wednesday in order to give members of the public, business leaders and Postal Service employees time to plan and adjust.