Saying that the move will cut $2 billion from a $20 billion gap between costs and revenues at the United States Postal Service (USPS), Postmaster General Patrick Donahoe announced plans today to eliminate mail delivery on Saturdays as of August 5. Package delivery will continue, said Donahoe, since the Postal Service views it as a growth business.
He also noted that post offices will remain open on Saturdays, accepting mail for posting and making deliveries to Post Office boxes.
“We take no tax dollars and we don’t want them,” Donahoe said at a press conference at USPS headquarters in Washington. “We are expected to operate as a business, but while a typical business has two months’ worth of operating costs [in reserve], we have less than four days’ cash on hand. We need to take aggressive steps to reduce costs.”
Direct marketers who make a few changes in their planning should feel little ill-effect from the change in service, noted Dustin LeFebvre, EVP of marketing for Specialty Print Communications, which mails more than 50 million direct mail pieces a month.
“It’s important for marketers to know that this won’t affect logistics of mail delivery beyond the last mile,” said LeFebvre. “It will mostly affect marketers who have Saturday in their in-home windows—retailers, for instance. If they have a Thursday to Saturday delivery window, they may want to move it ahead by a day.”
The Postal Service announced the move without approval from Congress, though Donahoe says that USPS legal counsel and his own reading of the Congressional resolution governing USPS does not commit the agency to delivering mail six days a week. Donahoe noted that the announcement was being made six months in advance of the service cut to give bulk mailers time to adjust their schedules, as well as to allow time to iron out potential problems with legislators and the postal workers union.
“We have no interest in catching Congress in a loophole. We want to work with congress to do the right thing and we have six months to do it,” Donahoe said.
In response to a reporter’s question, Donahoe commented that he would not be surprised by a union lawsuit. “I expect it. It’s America. We’ll go through it and work it out,” he said. USPS estimates that 22,500 jobs will fall victim to the cancellation of Saturday delivery, but Donahoe said that all job losses would come through attrition, and that USPS actually expects more than 40,000 retirements this year.
Donahoe said the decision to cut Saturday mail delivery is backed by public support, quoting outside surveys saying that 70% of Americans approve of the move as a way to keep the Postal Service in business. He claimed that postal worker approval runs nearly as high. “Go out and talk to our workers,” he said. “They are in favor of it. They know it’s necessary.”
In March the Postal Service intends to issue detailed plans for business customers to help them prepare for the change in service. These will include webinars, as well as printed materials.
One thing direct marketers might want to budget for is additional tracking, according to LeFebvre. “You’re going to see more mail tracking—at least temporarily—to monitor delivery expectations. Direct response marketers will have to keep track of this to adjust staffing at call centers,” he said.
LeFebvre also noted that the curtailed delivery schedule could heighten the importance of work-share discounts that bulk mailers receive from USPS for delivering regional shipments to local Postal Service processing centers.
Axing Saturdays was inevitable, opined the Postmaster General in his closing comments. “This was too big of a cost savings to ignore,” Donahoe said. “In fact, I argue that it would have been irresponsible for the Postal Service not to act on it.”
