USPS Loses $1.3 Billion, Plans to Cut Saturday Mail Delivery

    February 11, 2013
    Sean Patterson
    Comments are off for this post.

The U.S. Postal Service (USPS) today announced its first quarter financial results and things are not looking good. In the first three months of the 2013 fiscal year USPS had a net loss of $1.3 billion. The first quarter includes holiday season shipping and mail, which generally makes it USPS’ most lucrative quarter.

The company cited shipping and package revenue growth and “increaced efficiency” as high points, but admitted that those revenues could not help offset continued declines in First-Class Mail volume and “costs that are beyond Postal Service management control.” USPS has been begging congress for Postal Service reform, but has not received it.

As a result of its dismal finances, USPS will begin “accelerated cost-cutting actions,” which include eliminating Saturday mail delivery. USPS believes cutting Saturday delivery would save it $2 billion each year.

“The encouraging results from our holiday mailing season cannot sustain us as we move deeper into the current fiscal year and face continuing financial challenges,” said Patrick Donahoe, U.S. postmaster general and CEO of USPS. “By moving forward with the accelerated cost-cutting actions directed by our Board of Governors, we will continue to become more efficient and come closer to achieving long-term financial stability. We urgently need Congress to do its part and pass legislation that allows us to better manage our costs and gives us the commercial flexibility needed to operate more like a business does. This will help ensure the future success of the Postal Service and the mailing industry it supports.”

Though the Postal Service is mandated to provide six-day mail delivery, the fiscal cliff impasse in congress had the side effect of delaying the yearly appropriations bill containing the mandate. If a new mandate is not passed by March 27, USPS will legally be able to cut Saturday mail delivery. The new delivery schedule would then begin the week of August 5.

  • Chuck Norman

    No big deal for me. I hardly use the USPS anymore. I find that UPS and FedEx provide me with less expensive shipping alternative. As for letters, etc., I use email, a phone call, or talking to people face-to-face. I say the USPS should consider a Monday, Wednesday, and Friday service. And by the way, why do they have to have their own building that is poorly staffed at peak times (e.g., lunch time) and no real customer service (e.g., no smile, I really don’t care if I wait on you or not, and why are you bothering me type of attitude)? Why not have post offices in grocery stores or shopping malls. That way people can do their mailing and shopping in one place? Pay them $12.50 an hour. I foresee an end to the high paying postal jobs. Sorry to the postal employees making more than three times the minimum wage. Getting paid between $50,000 and $60,000 dollars to deliver mail never made sense to me. Not when I get paid $34,000 to do more physical work.

    • John

      Hi Chuck,
      If you had the chance to make $50,000 a year would you take the job? Letter carriers are the backbone of the USPS and have never been given anything that they didn’t fight for. You can not ship with UPS or FedEx cheaper than with the USPS unless you are shipping thousands of packages each day. Mismanagement has cost the postal service billions over the last ten years and continues today. Carriers are being micromanaged to the minute and are being followed by management on their routes like they are on prison work detail. These management people make a lot more money than the carriers and there is no way that a carrier can carry enough mail in a week to pay for two hours of street supervision. There have been cuts in the crafts but not enough in management. There are one supervisor for every 17 letter carriers in this country. School teachers can handle 20 to 30 kids per classroom and do a much better job. If your facts are true and you make 34K per year 34,000/52 weeks =653.84/40 hours= $16.34 per hour. Looks like you are over paid if that is the case.

    • Erap

      Why don’t you tell that to the elderly people who has no means of getting around. If you live in the suburbs, i guess you are ok with Fedex and UPS because they can leave your package by your door steps, try that if you live in the city where hundreds of people pass by your front door day and night and see if your package will still be there when you get home at least the USPS can get inside the building. You probably work inside a nice warm building during summer and cold during the summer.We letter carriers work outside to all kind of weather and we are over paid? Try to climb 1000 steps everyday, walk all day not only delivering mail in your hands and packages with you while climbing those steps and that’s not manual labor? I don’t know what kind of physical work you do but we serve the people in your neighborhood, do you?

  • richard

    Hi John,

    Settle down. Clearly you disagree with what Chuck says. But nobody cares about your opinion. Go back to work. I have a package that is now three days late from USPS. Not cool.

  • Dan

    Good first move to reduce costs, no business can afford to provide minimum value services at a loss
    Next move- cut pensions–business can support 3 retirees for every worker
    This retirement system is a disgrace===a disgrace that this non sustainable promise was requested by the union and a disgrace management accepted

    A nation which bleeds its workers for the luxurious lifestyle of retirees is doomed to failure

  • http://www.wholeblossoms.com Wedding Flowers Co

    We use email and FedEx to drive the vast majority of our letters and packages to customers. Unfortunately, the USPS does not have the infrastructure to support our needs. Should the USPS consider how to compete against UPS and FedEx, it might have a chance to come out ahead. Until that day happens, the USPS will be facing a dismal future.