Postal Service will study ending Saturday mail delivery

Tuesday, April 3rd 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ Through snow, rain and gloom of night _ but maybe not on the weekend.

Battered by slowing business and huge projected losses, the Postal Service announced Tuesday that it will study cutting back to a five-day schedule that would eliminate mail delivery on Saturdays. The agency also will examine how much money can be saved by consolidating and closing some postal plants and offices.

With rising costs, postal officials say they face a $2 billion to $3 billion loss this fiscal year. After five years in the black, the post office had a $199 million loss last fiscal year.

The agency's governing board will ask Postal Service management to report their study results within 90 days, said S. David Fineman, the board's vice chairman.

Fineman said the financial savings of going to five-day service could be ``substantial.''

``It could offset the amount of the loss that we have and we would hope that whatever actions we take will be able to cause us to ask for less of a rate increase,'' he said.

The price of first class mail went up a penny to 34 cents in January. Postal managers are preparing to apply this summer for another rate increase, to take effect next year.

The study will examine ending Saturday delivery for all mail, except overnight delivery. The study won't consider closing post office windows for other services.

The study of consolidating postal facilities will focus on behind-the-scenes operations like mail sorting and delivery and will seek ways to avoid affecting consumers, Fineman said.

Last week, the Postal Service announced that it plans labor, administrative and transportation cuts over the next five years. Deputy Postmaster General John Nolan has said the agency is committed to cutting costs by $2.5 billion by 2003.

And earlier this month, the Postal Service said it was freezing more than 800 new construction and leasing projects across the country.

Among the problems cited by the Postal Service are wage rate increases larger than the rate of inflation, rising fuel costs, greater competition and increasing use of electronic alternatives.

``As people begin to communicate with each other by means of the Internet, as people begin to pay their bills by means of the Internet and businesses communicate with each other by means of the Internet ..., we're seeing declines in volume of first class mail,'' Fineman said.

For the past several years postal leaders have sought changes in the laws that regulate how the post office operates to give them more flexibility in changing rates and services to cope with rising costs and changes in competition. Under current rules it takes nearly a year to change rates.

While the Postal Service does not receive any taxpayer money for its operations, it is still a government agency and operates under laws set by Congress.