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Post office estimates $10 billion loss

Mitchell Hartman Sep 30, 2011

Post office estimates $10 billion loss

Mitchell Hartman Sep 30, 2011

Kai Ryssdal: This being the last day of September, it’s also the last day of the fiscal year for the federal government and government-like entities.

Which brings us to this: The U.S. Postal Service is about to report as much as $10 billion in losses. Things are so dire the post office is about to start running television ads reminding us snail mail can’t be hacked, and important documents won’t just disappear with a random errant mouse click. Even the best ads in the world, though, won’t stop the billions of dollars in cuts that are coming.

Including one that businesses don’t like one bit. Marketplace’s Mitchell Hartman reports on the cost and benefits of Saturday delivery.

Mitchell Hartman: Stop delivering mail on Saturdays and you cut labor costs for postal workers. But it would also delay a lot of mail from heavy users: charities sending out solicitations, marketers sending out ads and discount offers.

Gene Del Polito is with the Association for Postal Commerce. He says some marketers want their ads to land on a Saturday — they want you to go out shopping.

Gene Del Polito: By eliminating Saturday, you may be missing getting a person at a time when they might be more receptive to seeing what’s in their mailbox.

But it could be a good thing if you want to avoid getting mail that could just ruin your weekend.

Del Polito: And if you happen to be a bank, you have to do some back-of-the-envelope calculations to figure out what is it going to mean to you to lose the time/value of that money because the payment may be coming in late or the bill may have been received later.

No more Saturday delivery is something Jim O’Brien definitely doesn’t look forward to.

Jim O’Brien: We publish four of the nation’s leading magazines: Time, Sports Illustrated, People and Entertainment Weekly.

O’Brien’s at Time Inc., which drops a billion magazines in the mail every year, plus bills and renewal notices. But mailing Sports Illustrated magazine so it arrives on Friday instead of Saturday is a big headache.

O’Brien: That would put extreme pressure on us to either change our editorial closing schedules or possibly add additional printing plants.

Still, cutting Saturday delivery may look good compared to the alternative, says George Mason University professor Lee Fritschler. He recently surveyed small businesses that send ads and bills through the mail.

Lee Fritschler: And about 75 percent of them said they would prefer losing a day of delivery to raising rates.

Problem is, the post office’s budget hole is so big, businesses might have to settle for both.

I’m Mitchell Hartman for Marketplace.

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