Postal Service May Slow Delivery to Save $1.5 Billion

Wednesday, 24 Aug 2011 05:02 PM

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Slowing down the delivery for first-class and Priority Mail could save the U.S. Postal Service $1.5 billion a year, according to a new study. Postal executives are considering the idea and may announce plans after Labor Day, The Washington Post reported.

Postal Service, first class, priorityFirst-class and Priority Mail generally are promised for delivery in two to three days. Relaxing the schedule by a day would cut an estimated $336 million in premium pay for employees that currently work overnight and Sunday to meet the deliveries, according to the Christensen Associates study, which the Postal Service’s inspector general commissioned, the Post reported.

The study also said the move would save an addition $1.1 billion by delivering some Priority Mail by ground instead of air, consolidating mail-processing facilities and employing fewer workers, the Post reported.

First-class mail volume will drop by about 28 billion pieces annually by 2020, but volume for standard mail is expected to remain flat at 50 billion pieces annually, the study says.

“Some of the Postal Service’s largest business mailers have stated that they value consistency over speed and they would tolerate slightly slower service to save costs,” according to the study.

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