Post office wants to cut Sat. delivery
WASHINGTON — The U.S. Postal Service is renewing its effort to drop Saturday delivery — and plans a rate increase — in an effort to fend off a projected $7 billion loss this year.
Without drastic action, the agency could face a cumulative loss of $238 billion in the next 10 years, Postmaster General John Potter said in releasing a series of consultant reports on agency operations and its outlook.
As Americans turn more and more from paper to electronic communications, the number of items handled by the post office fell from 213 billion in 2006 to 177 billion last year. Volume is expected to shrink to 150 billion by 2020.
At the same time, the type of material sent is shifting from first-class mail to the less lucrative standard mail, such as advertising, Potter pointed out. And as people set up new homes and businesses, the number of places mail must be delivered is constantly increasing.
The agency has asked Congress for permission to reduce delivery days and has previously discussed the need for other changes such as closing some offices. Cutting back Saturday home delivery, however, does not mean post offices would close that day. There seemed to be concern on the part of Congress that officials had not looked at all possible options, Potter said, adding that was part of the reason for the three consultant studies.
Potter said he would like to see mail delivery cut to five days per week starting next year.
Later this month, he said, the postal service will ask the independent Postal Regulatory Commission to review its plans for the service reduction.
Under the law, the agency is not supposed to raise rates more than the amount of inflation, but there is a loophole allowing for higher increases in extraordinary situations such as the current recession and drop in mail volume.
Potter said the USPS's governing board is engaged in lively discussions of rate increases, though he declined to speculate on a new price.
A proposal before the Postal Regulatory Commission has estimated increases of 3 percent this year and 10 percent next year would be needed to get the agency back to break-even.
