The U.S. Postal Service is standing by its estimate that cutting back from mail delivery six days a week to five will save it $3.1 billion annually, disputing a report that says the cutback would save considerably less.
In a report the Postal Service delivered to Congress Monday, it says the Postal Regulatory Commission used flawed analysis in coming up with its estimate that a five-day delivery week would save USPS just $1.7 million annually. It says the PRC refused to consider savings from increased productivity and efficiency, cost savings from lower highway transportation costs and mail processing expenses, and incorrectly calculating the annual revenue lost by eliminating Saturday delivery.
The PRC issued its nonbinding advisory opinion March 24.
USPS, facing an estimated 37 percent drop in first class mail volume over the next decade, lost $8.5 billion last year. In March, it announced plans to cut 7,500 administrative and executive jobs and close seven regional offices.
Many of the Postal Service’s cost savings plans, like reducing mail delivery and postponing retiree health care benefits funds payments, will require congressional approval.
It calls its plan to drop Saturday mail delivery the single-biggest cost-savings move it can make.
jclabaugh@bizjournals.com