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Postal Service to cut Saturday mail to trim costs

By Pauline Jelinek

Associated Press

LAST UPDATED: 01:01 p.m. HST, Feb 06, 2013

WASHINGTON » Saturday mail may soon go the way of the Pony Express and penny postcards. The Postal Service said today that it plans to cut back to five-day-a-week deliveries for everything except packages to stem its financial losses in a world radically re-ordered by the Internet.

"Our financial condition is urgent," declared Postmaster General Patrick R. Donahoe. But Congress has voted in the past to bar the idea of eliminating Saturday delivery, and his announcement immediately drew protests from some lawmakers. The plan, which is to take effect in August, also brought vigorous objections from farmers, the letter carriers' union and others.

The Postal Service, which suffered a $15.9 billion loss in the past budget year, said it expected to save $2 billion annually with the Saturday cutback. Mail such as letters and magazines would be affected. Delivery of packages of all sizes would continue six days a week.

The plan accentuates one of the agency's strong points: Package delivery has increased by 14 percent since 2010, officials say, while the delivery of letters and other mail has plummeted. Email has decreased the mailing of paper letters, but online purchases have increased package shipping, forcing the Postal Service to adjust to customers' new habits.

"Things change," Donahoe said.

In fact, the Postal Service has had to adapt to changing times ever since Benjamin Franklin was appointed the first postmaster general by the Continental Congress in 1775. The Pony Express began in 1860, six-day delivery started in 1863, and airmail became the mode in 1918. Twice-a-day delivery was cut to one in 1950 to save money.

But change is not the biggest factor in the agency's predicament — Congress is. The majority of the service's red ink comes from a 2006 law forcing it to pay about $5.5 billion a year into future retiree health benefits, something no other agency does. Without that payment — $11.1 billion in a two-year installment last year — and related labor expenses, the mail agency sustained an operating loss of $2.4 billion for the past fiscal year, lower than the previous year.

Congress also has stymied the service's efforts to close some post offices in small towns.

Under the new plan, mail would be delivered to homes and businesses only from Monday through Friday but would still be delivered to post office boxes on Saturdays. Post offices now open on Saturdays would remain open.

Over the past several years, the Postal Service has advocated shifting to a five-day delivery schedule for mail and packages — and it repeatedly but unsuccessfully has appealed to Congress to approve the move. An independent agency, the service gets no tax dollars for its day-to-day operations but is subject to congressional control.

The proposed change is based on what appears to be a legal loophole — and that may be a gamble. Congress has long included a ban on five-day-only delivery in its spending bills, but because the federal government is now operating under a temporary spending measure rather than an appropriations bill, Donahoe says it's the agency's interpretation that it can make the change itself.

"This is not like a 'gotcha' or anything like that," he said. The agency essentially wants Congress to keep the ban out of any new spending bill after the temporary measure expires March 27.

Might Congress try to block the idea?

"Let's see what happens," he said. "I can't speak for Congress."

Two Republican lawmakers said they had sent a letter to leaders of the House and Senate in support of the elimination of Saturday mail. It's "common-sense reform," wrote Darrell Issa of California, chairman of the House Oversight and Government Reform Committee, and Tom Coburn of Oklahoma, top Republican on the Senate Homeland Security and Governmental Affairs Committee.

But Alaska Democratic Sen. Mark Begich called it "bad news for Alaskans and small business owners" who he said need timely delivery to rural areas.

Sen. Susan Collins, R-Maine, said she was disappointed, questioned the savings estimate and worried the loss of Saturday service might drive customers away.

"The Postal Service is the linchpin of a $1 trillion mailing and mail-related industry that employs more than 8 million Americans in fields as diverse as direct mail, printing, catalog companies, magazine and newspaper publishing and paper manufacturing," she said. "A healthy Postal Service is not just important to postal customers but also to our national economy."

She noted that the Senate last year passed a bill that would have stopped the postal service from eliminating Saturday service for at least two years and required it to try two years of aggressive cost cutting instead.

The House didn't pass a bill.

Republican House Speaker John Boehner said Wednesday, "I think trying to act in this postal area is pretty difficult. But I understand where the postal commission is coming from. They're in charge with running the post office, but yet the Congress, in its wisdom, has tied their hands every which way in order for them to actually run the post office in a revenue neutral way."

"And so Congress needs to act, there's no question about that, and I hope we'll act soon."

President Barack Obama's spokesman, Jay Carney, said the White House learned only Tuesday about the agency's decision to cut Saturday service. He said the White House is still evaluating the decision but would have preferred its own comprehensive overhaul package that failed to pass Congress last year be adopted "for the sake of a stronger future Postal Service."

The president of the National Association of Letter Carriers, Fredric Rolando, said the cutback is "a disastrous idea that would have a profoundly negative effect on the Postal Service and on millions of customers," particularly businesses, rural communities, the elderly, the disabled and others who depend on Saturday delivery for commerce and communication.

He said the maneuver by Donahoe to make the change "flouts the will of Congress, as expressed annually over the past 30 years in legislation that mandates six-day delivery."

The National Farmers Union said "impacts on rural America will be particularly harmful."

Despite that opposition, the Postal Service clearly thinks it has a majority of the American public on its side. The service's market research indicates that nearly 7 in 10 people support the switch as a way to reduce costs, Donahoe said.

He said the savings would include employee reassignment and attrition.

The agency in November reported a record annual loss of $15.9 billion for the past budget year and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on the $11 billion in retiree health benefit prepayments to avert bankruptcy.

The financial losses for the fiscal year ending Sept. 30 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 Postal Service is in the midst of a major restructuring throughout its retail, delivery and mail processing operations. Since 2006, it has cut annual costs by about $15 billion, reduced the size of its career workforce by 193,000, or 28 percent, and has consolidated more than 200 mail processing locations, officials say.


Associated Press writer Nedra Pickler, researcher Monika Mathur and broadcast correspondent Jerry Bodlander contributed to this report from Washington. AP writer David Koenig contributed from Dallas.

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peanutgallery wrote:
Incredible news. The Post Office is failing. There is no doubt that the union workers are being paid far too much. Management has lost control of another government employee union.
on February 6,2013 | 02:56AM
RichardCory wrote:
Cursed unions! I wish we could go back to the days of the 1920's, where employees had no right to healthcare and a living wage. Those sure were the good old days.
on February 6,2013 | 03:47AM
bender wrote:
I don't think anyone is advocating for that. But you have to admit that USPS has been overly generous with pay and benefits for their workers. And although it would be a symbolic gesture, the people at the top of the postal service should take pay cuts, it might make other cost cutting measures go down a little easier. And let's not forget in days past that USPS handed out very nice bonuses to their top people. I think Runyon received $1 million annual bonuses on more than one occasion. That tells me the mindset at USPS is wrong.
on February 6,2013 | 04:50AM
Nevadan wrote:
USPS contributed to Lance Armstrong, $11 MLN, I believe
on February 6,2013 | 12:59PM
Allenk wrote:
I believe that your statement is a bit extreme. It could be wages as well as overtime. I think that with e-commerce, most businesses use UPS. I see their trucks in our neighborhood all the way up until 7 pm at night. Certain ebay stores use USPS flat rate boxes and envelopes which guarantee a set rate. Online banking, email all this type of technology also impacts their services too.
on February 6,2013 | 06:50AM
HD36 wrote:
Yea, but we were on a gold standard, no Federal Reserve, and had no income tax. The dollar was as good as gold and was worth so much you could just hire a doctor. The government was so small back then the US had its most prosperous days.
on February 6,2013 | 11:29AM
aomohoa wrote:
I think there is a happy medium between child labor, safe environments and greedy people who thing they should keep getting raises even when the economy is bad. Yes the union workers think they deserve more than anyone when they are qualified or not. Frequently people will low education and an attitude of entitlement.
on February 6,2013 | 03:59PM
bender wrote:
The problem lies in part with Congress requiring the postal service to prepay the retirement benefit plans for all of their employees. I'm sure Congress didn't dream that up on their own so the question is how is it that the letter carriers union was able to push that mandate through Congress while Congress doesn't impose the same rules on government agencies. Of course that would mean Congress would have to prepay all federal worker retirement plans and they understand that isn't a workable plan. Then there is the pay question.
on February 6,2013 | 04:47AM
HD36 wrote:
The pay is great. My friend makes over $115k after working as a postman for 20 years. Another friend retired after 10 years and still gets a pension check, 30 years later. So not bad for employees I guess, work less, get paid the same.
on February 6,2013 | 08:16AM
olos73 wrote:
Your second friend must be a vet because he could combine his federal service with PO years.
on February 6,2013 | 08:28AM
olos73 wrote:
Or, he went out with disability.
on February 6,2013 | 08:33AM
nitpikker wrote:
pay is too great! thats why post office is in trouble!
on February 6,2013 | 11:29AM
aomohoa wrote:
They are also very inefficient. They could learn a few things from Fedex.
on February 6,2013 | 04:00PM
olos73 wrote:
Like what? FedEx only delivers when you order merchandise. I rather have UPS than FedEx.
on February 6,2013 | 05:52PM
bobbob wrote:
they are not that bad, and a lot cheaper. their tracking system sucks though.
on February 6,2013 | 08:01PM
HD36 wrote:
They still get the same pay but work less?
on February 6,2013 | 11:27AM
aomohoa wrote:
Management of our government agencies have no clue what they are doing either. Talk about over paid.
on February 6,2013 | 03:56PM
mrrdgreen wrote:
The World and the economy have changed. Saturday Delivery should have ended years ago.
on February 6,2013 | 03:50AM
Fred01 wrote:
Sunday delivery should have started years ago.
on February 6,2013 | 10:18AM
paradisetax wrote:
How about cutting the pay to all members of congress.
on February 6,2013 | 03:53AM
bender wrote:
So they can deliver packages on Saturday but not mail. Doesn't make sense. But a news story from another source didn't say they would deliver packages on Saturday, only disburse them.
on February 6,2013 | 04:51AM
Allenk wrote:
Packages contain merchandise. Probably an effort to keep business traffic going. Although I guess bills and statements have to wait until Monday.
on February 6,2013 | 06:52AM
primowarrior wrote:
As far as I'm concerned, the bills and statements can wait, but I want my package now, lol. With so many people now buying merchandise online, I think it makes sense for the USPS to protect that part of their business, as Saturday delivery gives them an edge over UPS/Fedex, who can be pretty expensive.
on February 6,2013 | 10:45AM
bobbob wrote:
because they make a lot more money off packages, and package volume has increased. They are price competitve compared to UPS & FEDEX. I spend $15 - $20,000 a year on postage for parcels, sending and receiving. Probably spend $5 a year on envelope postage.
on February 6,2013 | 08:03PM
localguy wrote:
The perfect storm. Our totally dysfunctional congress refuses to let the post office free of its clutches, continually dragging the agency down. When will these bureaucrats realize they are the source of financial problems for the USPS? When will they ever do the job we elected them to? Looks like not in my life time.
on February 6,2013 | 05:24AM
olos73 wrote:
One of the problems is management getting paid bonuses. Post Office is not supported by taxpayers money. Revenue is from stamps sales, parcels fees, and bulk business postage fees. Management from local offices all the way up to Headquarters get bonuses according to the office's performance. Clerks, mailhandlers, and letter carriers do the work, but management gets the bonuses. PO would be in the black if they didn't hand out bonuses to them.
on February 6,2013 | 07:54AM
loquaciousone wrote:
So does that mean that if they have only one package for a resident 10 miles away they're going to drive all the way over there to deliver only that one package?
on February 6,2013 | 09:34AM
Skyler wrote:
It's still cheaper (time-wise) than having to stop at 10 miles' worth of houses on possibly both sides of each street to deliver mail - doncha think?
on February 6,2013 | 10:51AM
aomohoa wrote:
The Post Office is just another example of how poorly our government is run. It's a joke. Fedex and UPS are so much more efficient and has so much better service. Why, because it doesn't have a bunch of Civil service employees with no motivation. We have gone to the Post Office with receipts and they can't find our package. It's unbelievable.We ask them to hold our mail while we are on vacation and they still try to deliver packages. They ask u where we want our packages put and we tell them, and they throw them over the back fence. The only positive thing I can say is that most of the employees at the Ewa Beach Post Office are nice.
on February 6,2013 | 10:27AM
Nevadan wrote:
Well said
on February 6,2013 | 01:00PM
olos73 wrote:
When was the last time you went to a FedEx or UPS office to pick up your mail? Or told them to hold your mail when you go on vacation? Try get FedEx or UPS to send a 46-cents letter anywhere for you. They going laugh at you. The only time you see a FedEx or UPS truck at your house is when you order something. Otherwise, your mailbox going get cobwebs.
on February 6,2013 | 07:44PM
bobbob wrote:
lol... they are also probably 3x more expensive than usps since most businesses will ship to hawaii using 2nd day air, which is way more costly than a simple flat rate box.
on February 6,2013 | 08:05PM
Upperkula wrote:
People on disability will have to wait for their checks a little bit longer now. OUCH
on February 6,2013 | 10:39AM
Skyler wrote:
Get direct deposit - problem(s) solved. In fact, unless you are hella rural or over 90, your SS/SSA checks will have to be delivered to your bank via direct deposit. Besides, I don't think 2 days is gonna kill anyone - disabled or not. If it still worries you, plan ahead. Disabled doesn't always mean you can't think for yourself.
on February 6,2013 | 10:54AM
olos73 wrote:
That's right. Like Social Security checks, the government want you to get direct deposit. I think all Federal retirement checks are direct deposit also.
on February 6,2013 | 11:07AM
bobbob wrote:
social security is all electronic now
on February 6,2013 | 08:05PM
Sunny wrote:
The checks in the mail! But no mail delivered on Saturday so you may not receive it until later next week!
on February 6,2013 | 10:44AM
aomohoa wrote:
Most of the mail we get is junk anyway, except for packages ordered. You can do banking, pay utilities and many other things on line. The Post Office has not kept up with the times.
on February 6,2013 | 04:04PM
olos73 wrote:
The mail the Post Office delivers is what customers give them. So if you have plenty junk mail, complain to the company that is sending it to you.
on February 6,2013 | 05:55PM
Skyler wrote:
Pity Congress has such a tight grip on the US Postal service that it would rather see it lose money than be a viable entity. I'm not going to miss Sat. delivery at all - my bills can wait until Monday. 8-|
on February 6,2013 | 10:48AM
loquaciousone wrote:
Who pays bills by mail anymore?
on February 6,2013 | 11:30AM
olos73 wrote:
The ones with no computers or the ones that don't want to get hit by identity theft. Some people still don't trust cyberspace.
on February 6,2013 | 01:40PM
nitpikker wrote:
gotta dump the union!
on February 6,2013 | 11:00AM
gari wrote:
they should also review the other areas like stamp variety stamp collections ?, junk mail monitoring and solutions..
on February 6,2013 | 11:21AM
kiheilocal wrote:
USPS is great with packages and love their flat rate rates. I do stuff on ebay and have never had a problem. Can count on USPS and the employees are really on it and professional. This is good news!!
on February 6,2013 | 11:23AM
false wrote:
Good News and its about time.
on February 6,2013 | 12:39PM
Bdpapa wrote:
Yup, next move only 3 delivery days per week.
on February 6,2013 | 01:55PM
aomohoa wrote:
The employees will probably be given all kind of benefits if they are let go. Serious down sizing is in order.
on February 6,2013 | 04:06PM
Bdpapa wrote:
Nah, they will transition as people retire. No big thing, they get their 40 and weekends off.
on February 6,2013 | 07:26PM
sailfish1 wrote:
This is another case where Federal pay and benefits are so great that eventually the system will self destruct.
on February 6,2013 | 12:49PM
Nevadan wrote:
The U S Postal Office contributed tens of million dollars to Lance Armstrong. Why?
on February 6,2013 | 12:56PM
bumbucha wrote:
The Postal System has put themselves in this position as the money their workers & mgt. make, is obscene. It is so good, that is why hiring is few and far in between, thousands apply when there is test taking hiring. 100 g's and up, 25% COLA of their pay added to their earnings, Good for them, but they can start by looking with their system, to cut costs down and not simply attrition, elimination/consolidation of jobs. If we have an ignorant two face Hawaii Governor and Legislature who can cut gov't worker wages, then maybe the independent Postal System needs to take a look at eliminating mgt bonuses, OT, and... reduce their worker's wages.
on February 6,2013 | 02:47PM
hanabatadayz wrote:
this is looooonnnggg overdue..back when i was a mail carrier 15 years ago the usps knew it was already in trouble because of people using the internet for email..that's why they have a 20 billion dollar deficit now because they failed to make the changes back then..auwe
on February 6,2013 | 02:50PM
tiki886 wrote:
Long castigated, berated, spat upon and humiliated the Post Office never gets a fair deal.

They deserve far more: to be criticized, reprimanded, denounced and ostracized.

I remember when the Postal workers started a slow-down strike for a pay raise.They had to call it off -- nobody noticed.

What does it mean when the Post Office flys it's mast at half staff? - They're hiring.

46 cents is a really good price to mail a letter; 6 cents for delivery and 40 cents for the storage.

on February 6,2013 | 03:15PM
Kaleo744 wrote:
Been saying this for years pay all the government workers especially the politicians..minimum wage.. that will get us out of debt...prices will come down drastically the world economy now will be on an even playground one world currency the sign of the end of times...
on February 6,2013 | 07:40PM
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