The postman will only ring five times a week

U.S. Postal Service employee Arturo Lugo delivers an Express Mail package during his morning route on February 6, 2013 in Los Angeles, Calif. The U.S. Postal Service plans to end Saturday delivery of first-class mail by August, which could save the service $2 billion annually after losing nearly $16 billion last fiscal year.

The long-suffering, and all-but-bankrupt United States Postal Service, said today that starting in August, it will stop stuffing home mailboxes on Saturdays. The USPS figures to save $2 billion a year.

The postal service is losing $25 million a day delivering our mail, but what’s in our mail these days? If you look in your mailbox, you might see a magazine or two, some bank statements and, of course, junk. But mostly, it's what is called first-class mail. Postal industry analyst John Callan says the category is made mostly of business mail -- billing statements and checks.

“If they’re still paying checks in the mail," he says.

Callan says deliveries of first-class envelopes have been declining and with that, so too has the postal service’s revenue. Junk mail, or what the industry calls standard or advertising mail, now makes up half of the mail’s volume but brings in much less money. And even that is declining. You can expect 3 percent less junk mail in your mailbox this year.

But don’t think this is a foreshadowing of the beginning of the end of your mail. Rick Geddes, who teaches in the department of policy analysis and management at Cornell, says your mail deliveries for the foreseeable future, are safe. And he’s not basing that statement on raw optimism.

“But on the experience in other countries that have made their postal services more commercial, more like real companies, more entrepreneurial and more innovative,” he says.

Like UPS and FedEx, those private sector models of speed and efficiency. But even these companies rely on the postal service for some of their deliveries.

About the author

Sally Herships is a regular contributor to Marketplace.
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I am disappointed that you did not discuss what I and many others think is the most important reason for the USPS's financial problems. Since 2006, Congress has required the agency to pay into a health-care pension fund for future-retirees for 75 years into the future to the tune of $5.5 billion a year, a mandate that has hamstrung the agency. This was a law passed by a Republican controlled House and signed by then President Bush. No other business has such a requirement. Without such a requirement, the Post Office would be doing well financially.

There is some indication that this is part of the general trend to bust unions (the USPS has one of the largest unions in the country) and to privatize heretofore public services. If the Post Office is forced to curtail services in order to meet the pension obligations then it will be all the easier for conservatives to argue that the private sector can do the job better.

@cat: I read your link to the post office page describing the military pensions. Apparently, former military employees, now working for the post office, are to have their pensions paid for by postal costumers, instead of by the government through income taxes. This is what Republicans want. They want the burden split evenly by everyone, where as they deplore income taxes, because income taxes supposedly taxes the rich at a higher percentage than the poor. This is what they hate the most. No way, to them, is a person in a better position to pay going to help anyone in a lesser position.

I heard mentioned at least twice in Sally's reporting about the benefits of privatizing governmen-run post offices… This is a very bad idea! Have you checked the price of a letter sent by UPS or FedEx lately? What is it? $15 or $18 or more? Compared to the post office price of 46¢ ?

We hear many stories of the Post Office's financial troubles. For years we've been hearing how it's out of money or hopelessly in debt or bankrupt. But it's important to report what may be the biggest albeit not the only cause of the problem: the United States Congress. Congress has required the USPS to overfund its pension funds by billions and bizarrely made the Post Office responsible for funding the military pensions of ex-military postal employees. Congress created these problems. Add them to the decline in first-class mail customers and we wind up losing Saturday delivery. Remove them and the Postal Service is not fiscally healthy but not on its deathbed either.



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