USPS Delivery Cuts Will Save, But...

The U.S. Postal Service is likely to save a significant sum by eliminating a delivery day, but a new watchdog report suggests the actual figure is dependent --in part -- upon the productivity of the agency's workforce in the remaining weekdays.

The Government Accountability Office on Tuesday determined that the Postal Service could achieve "substantial" savings by cutting Saturday delivery, but the agency would have to increase its efficiency Monday through Friday. If city letter carriers do not boost their productivity, USPS will miss out on $500 million in savings, the report said. Postal officials have estimated nearly $3.1 billion savings per year with a shift to five-day delivery.

The Postal Regulatory Commission last week issued an advisory opinion on the issue, noting that the Postal Service overestimated potential savings and underestimated potential losses in revenue associated with dropping Saturday delivery. The actual savings would be approximately $1.7 billion annually, but only after three years, according to the PRC.

GAO also noted that eliminating Saturday delivery alone would not solve the Postal Service's current financial predicament. Additional restructuring is necessary, and other issues, such as the agency's obligation to prefund retiree health benefits and its high employee compensation costs, also must be altered, according to the report.