Postmaster General Patrick Donahue said today that the Postal Service will stop first-class mail deliveries on Saturdays, adding that package delivery will not cease to be delivered and post office operating hours will not change.

According to Donahue the plan will save approximately $2 billion annually, calling the decision an “important part of our strategy to return to financial stability.“

Donahue further stated that “The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits.” Also adding that the plans have little to no impact on the speed of delivery except for items that would have otherwise been delivered on Saturday.

Under pressure from local communities in Congress, last year the Postal Service scrapped plans to close thousands of post offices nationwide, instead trimming operations at 13,000 locations.

The USPS reports that Saturday is the week’s lowest daily volume and more than a third of businesses across the United States are closed on Saturday.  A recent national Gallup poll indicated that Saturday would be the least disruptive day to discontinue mail delivery.

In November the agency reported an annual loss of nearly $15.9 billion for the last budget year. In an attempt to avert bankruptcy, last year the agency defaulted on billions in retiree health benefit prepayments.

One of the largest problems the agency is facing isn’t due to a reduction in mail flow, but rather to growing mandatory costs for future retiree health benefits, accounting for $11.1 billion of the losses.  Disregarding other losses, the Postal Service showed an operating loss of $2.4 billion, an improvement from last year.

Other government agencies are not required to make future payments for medical benefits. In an ever growing concern, postal authorities wanted Congress to address the issue last year however, the season finished without lawmakers getting it done.

Since 2006, the agency has cut annual costs by approximately $15 billion, reducing the overall size of its workforce by 193,000 or roughly 28 percent.

Although the change in the delivery schedule announced today is a step required to ensure the future health of the Postal Service, lawmakers are still urgently needed to act.  Officials of the Postal Service have said that they continue to press forward with legislation reform that will give them more flexibility to make new revenues and control costs.

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