USPS May Need to Cut Delivery To 5 Days/Week
According to the Associated Press, U.S. Postmaster General John E. Potter testified before Congress that massive deficits may force the USPS to cut delivery by 1 day each week. Current law requires mail delivery six days a week. It was interesting to note that the proposed day to cut was not Saturday, but rather Tuesday, which is the lightest mail day by volume.
As more people use alternative forms of correspondence, revenue goes down and the United States Postal Service’s ability to cover their relatively fixed operating cost is diminished. The economic downturn isn’t helping either. One side effect of a slowing economy is a reduction in advertising. Since 52% of the USPS’s mail volume is comprised of junk mail, it should come as no surprise that a reduction in direct marketing mail would hit the USPS hard.
In a few realms, the USPS has its hands tied. Many of its costs, such as its retiree health and benefit programs, can’t be reduced all that much. Income from postage declines as volume is reduced and there are very restrictive limits on postage rate increases. The number of delivery days is one variable that could reduce some costs, though that too would require a law change. The relevance of the USPS may have declined since its heyday, but some form of inexpensive, reliable, and daily delivery service is clearly vital to the success of the economy.
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