US Postal Service Mulling 3 Day Delivery

Postal Service Urged to Weigh Three-Days-a-Week Mail

March 04, 2010, 4:18 PM EST

By Angela Greiling Keane

March 4 (Bloomberg) -- The U.S. Postal Service, facing a
$238 billion budget deficit by 2020, should consider cutting delivery to as few as three days a week as the agency
ed dramatically in the last 40 years, but some of the laws that govern the Postal Service have not,” Postmaster General John Potter said in a March 2 statement. “These laws need to be modernized to reflect today’s economic and business challenges and the dramatic impact the Internet has had on American life.”
Retail Locations

The Postal Service has 36,500 retail locations, more than twice as many as McDonald’s Corp. and more than triple the number of Starbucks Corp. outlets, New York-based McKinsey said.

“The Postal Service urgently needs a more flexible business model to best meet America’s changing mailing needs and consumer patterns,” said Sue Brennan, a Postal Service spokeswoman. “The volume of mail that funds the organization is declining at such a rate that we need to be able to adapt, and without flexibility we cannot.”
Asked about the possibility of trimming service to three days, Brennan said that the agency is “only focusing on five- day delivery.” Potter requested the consultants “investigate all possible options. And one of the options was to decrease mail delivery in some areas to three days due to lack of mail volume,” Brennan said.

The service said in January it’s reviewing 162 post offices, stations and branches for possible closing, down from an earlier review last year of 3,600 locations. The agency isn’t considering closing facilities in places such as small towns that are served by only one retail location.
‘System Would Collapse’
“
We believe three-day delivery would result in the demise of the Postal Service,” Sally Davidow, a spokeswoman for the American Postal Workers Union, said in an e-mail. “The USPS would become irrelevant, and the nation’s government-sponsored mail system would collapse.”

The Postal Service expects to lose about $7 billion in the fiscal year ending Sept. 30, with debt expanding to $13.2 billion, approaching its $15 billion debt limit, Chief Financial Officer Joseph Corbett told reporters last month.
Privatizing the Postal Service, as countries including Germany and the Netherlands have done, is an “unlikely” option for the U.S. because it wouldn’t be attractive to investors, McKinsey said.

The Postal Service said in a statement today that it will offer “sale” prices to some customers July 1 to Sept. 30, the second such program in a year. The service will give 30 percent rebates on standard-mail letters and flats to those participants who ship at least 5 percent more than their mail volume in the same period last year.