PRC Submits Advisory on Five-Day Postal Delivery

The Postal Regulatory Commission just issued its advisory opinion on the U.S. Postal Service’s five-day mail delivery proposal to Congress.

So does this mean letter carriers will soon stop delivering mail to U.S. homes and businesses and picking up mail from blue collection boxes on Saturdays?

Not so fast, says the PRC. The Commission’s analysis determined that the Postal Service may not save as much money as it planned to by curtailing Saturday delivery. And the potential volume losses are possibly higher than initially expected, too.

“In all cases, we chose the cautious, conservative path,” said chairman Ruth Y. Goldway in a statement. “Our estimates, therefore, should be seen as the most likely, middle ground analysis of what could happen under a five-day scenario.”

For instance, the Commission estimates that the USPS’s annual net savings from eliminating Saturday delivery would be $1.7 billion; the Postal Service’s savings estimate is $3.1 billion. Full savings in either case would probably not be achieved until three years after implementation.

The PRC also believes net revenue losses due to volume declines caused by the service cuts is $0.6 billion, vs. the USPS’s estimate $0.2 billion. What’s more, the planned changes would on average cause 25% of first-class and Priority mail to be delayed by two days.

The Commission also found that the Postal Service failed to evaluate the impact of five-day delivery on customers in rural, remote, and noncontiguous areas.

The USPS, which is required to ask the Commission for an advisory opinion on any change in nationwide service, made the request on March 30, 2010. Though the proposal would end Saturday mail delivery, collection, and outbound mail processing, post offices would stay open on Saturdays, and mail would be delivered to post office boxes.

Clearly the PRC is not taking the prospect of eliminating a day of postal delivery lightly. Goldway told MCM last week that in her 13 years serving on the commission, “this has been the most difficult and multifaceted issue I have been asked to address.”

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