WASHINGTON: The financially struggling US Postal Service said Wednesday it will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion a year.
The change continues the shrinking of what used to be one of the country's most visible and powerful agencies, one that put the presence of the federal government in some of the smallest towns across the US The postmaster general had such powers of job-placing patronage that the position _ once part of the president's Cabinet _ was a coveted one.
But the Internet and package delivery companies such as FedEx and UPS have weakened the agency.
The Postal Service in November reported an annual loss of a record $15.9 billion for the last budget year and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on billions in retiree health benefit prepayments to avert bankruptcy.
The Postal Service is in the midst of a major restructuring. Since 2006, it has cut annual costs by about $15 billion and reduced the size of its career workforce by 193,000 or by 28 per cent, officials say.
Wednesday's move accentuates one of the agency's strong points. Package delivery has increased by 14 per cent since 2010, officials say, while the delivery of letters and other mail has declined.
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 on that day.
It was not immediately clear how the service could eliminate Saturday mail without approval from Congress. But the agency clearly thinks it has a majority of the American public on its side.
Material prepared for the Wednesday press conference by Patrick R. Donahoe, postmaster general and CEO, says the agency's market research and other research has indicated that nearly 7 in 10 Americans support the switch to five-day delivery as a way for the Postal Service to reduce costs.
``The American public understands the financial challenges of the Postal Service and supports these steps as a responsible and reasonable approach to improving our financial situation,'' Donahoe said.
He said the change is expected to achieve cost savings of approximately $2 billion annually when fully implemented.
The change continues the shrinking of what used to be one of the country's most visible and powerful agencies, one that put the presence of the federal government in some of the smallest towns across the US The postmaster general had such powers of job-placing patronage that the position _ once part of the president's Cabinet _ was a coveted one.
But the Internet and package delivery companies such as FedEx and UPS have weakened the agency.
The Postal Service in November reported an annual loss of a record $15.9 billion for the last budget year and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on billions in retiree health benefit prepayments to avert bankruptcy.
The Postal Service is in the midst of a major restructuring. Since 2006, it has cut annual costs by about $15 billion and reduced the size of its career workforce by 193,000 or by 28 per cent, officials say.
Wednesday's move accentuates one of the agency's strong points. Package delivery has increased by 14 per cent since 2010, officials say, while the delivery of letters and other mail has declined.
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 on that day.
It was not immediately clear how the service could eliminate Saturday mail without approval from Congress. But the agency clearly thinks it has a majority of the American public on its side.
Material prepared for the Wednesday press conference by Patrick R. Donahoe, postmaster general and CEO, says the agency's market research and other research has indicated that nearly 7 in 10 Americans support the switch to five-day delivery as a way for the Postal Service to reduce costs.
``The American public understands the financial challenges of the Postal Service and supports these steps as a responsible and reasonable approach to improving our financial situation,'' Donahoe said.
He said the change is expected to achieve cost savings of approximately $2 billion annually when fully implemented.
Source:-The Times of India dtd 12.02.13
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