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USPS to halt Saturday mail delivery by August


USPS Credit: USPS (Getty Images)

The U.S. Postal Service plans to drop Saturday delivery of first-class mail by August in its latest effort to cut costs after losing nearly $16 billion last fiscal year, the cash-strapped agency said Wednesday.

The plan would save about $2 billion a year, the Postal Service said. The mail agency will still deliver packages six days a week and will not change post office operating hours.

The Postal Service has been losing billions of dollars each year as it grapples with massive payments for future retiree health benefits and Americans' increasing reliance on online communications, which has driven down mail volumes.

The agency has been seeking congressional approval to get relief from those prepayments and for a larger restructuring to reduce costs. But with no short-term legislative fix in sight, the Postal Service is getting more aggressive in testing its own authority to make cuts.

"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," Postmaster General Patrick Donahoe said in a statement.

The 237-year-old institution ran into its legal borrowing limit last year and defaulted twice on required payments to the federal government.

Postal officials have said for years that the agency needed to cut back on delivery days, as well as close underused facilities and reduce its workforce.

Officials previously contended they needed permission from Congress to make the changes, but now believe they may be able to take some actions without new legislation.

Donahue said the changes would allow the Postal Service to continue benefiting from rising package deliveries as Americans order more products online from websites such as eBay and Amazon.

Package deliveries were a bright spot in a bleak 2012 fiscal year, with package revenue rising 8.7%.

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