Postal Service questions PRC report on five-day delivery savings

The US Postal Service defended internal research that found it would save $3.1 billion per year by eliminating Saturday home delivery, calling into question the Postal Regulatory Commission‘s research that found it would only save $1.7 billion by doing so. PRC chairman Ruth Goldway also said the USPS declined to meet with the oversight body about the discrepancy in projections.

The Postal Service said this week that the PRC did not recognize about $760 million in savings from increased city carrier productivity as well as $260 million in highway transportation and mail processing improvements, among other areas.

“The Postal Service finds it unfortunate that the PRC relied upon a questionable financial analysis in developing its nonbinding advisory opinion,” the USPS said in the report. “The total impact of transitioning to a five-day delivery schedule will significantly improve the Postal Service’s financial stability by reducing annual net costs by about $3.1 billion annually.”

“No other action that we can take will save as much money as this action,” said David Partenheimer, spokesperson for the USPS.

However, Goldway said the PRC’s numbers are accurate and that the oversight body was rebuffed when it tried to meet with the USPS about the difference in projected savings by cutting five-day delivery.

“I’m disappointed that the US Postal Service declined our offer to meet with us to go over the report in detail and to answer any questions they might have had,” she said. “In this case of five-day delivery, the case could’ve been made for even a smaller amount of potential savings, but we tried very hard to give the USPS the benefit of the doubt.”

The PRC said in March that the Postal Service would only save about $1.7 billion annually by cutting Saturday home delivery, short of the $3.1 billion that the USPS projected it would save. The Postal Service also estimated it would see annual net revenue losses due to volume declines of $200 million, while the PRC placed that number at $587 million.

Congress must authorize a reduction in delivery days. Sen. Tom Carper (D-Del.) introduced a bill in May that would allow the USPS to modernize its pension payments system, eliminate Saturday home delivery, expand its services as it sees fit, and close post offices as it deems necessary.

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