U.S. Postal Service Policy Change

Beginning on August 5th, 2012, the United States Post Office will discontinue delivering and collecting mail on Saturdays. Packages will continue to be delivered and mail will still be delivered to P.O. boxes, however.

This will mark the end of an era – Saturday deliveries have been part of the U.S.P.S.’s service since 1863.

This cost saving plan should result in an annual cost reduction of $2 billion. The change is expected to affect about 22,500 jobs, but Patrick Donahoe (U.S.P.S. CEO and Postmaster General) plans for the transition to involve as few lay offs as possible. Rather, he would offer buy outs, eliminate over time, and rely more on part time workers. In the past year, the service has cut hours at thousands of post offices — some are open for only two hours a day. It has also merged some of its plants, which led to a 28,000 drop in its workforce through retirements and departures by employees who couldn’t relocate or take up other postal jobs.

The heart of this decision has to do with saving money. Simply put, the U.S. Postal Service doesn’t have enough on hand cash to complete all of the tasks that are required of their office. Their woes center around a 2006 Congressional mandate, under which the office has to pre-fund healthcare benefits for future retirees. The U.S.P.S. has been borrowing billions of dollars from taxpayers to make up for the shortfalls, and feel as though they’ve been ignored by Congress, as far as receiving governmental help in their time of need. If Congress doesn’t act soon, the Postal Service could come dangerously close to running out of cash next month. A report last year projected that by mid-March, the agency would have about $1 billion in cash – barely enough to keep the agency running for four days.

 

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