The United States Postal Service (USPS) is finally going to end Saturday mail delivery. The agency lost nearly $16 billion last year in an annual budget exceeding $70 billion dollars. The move to drop Saturday delivery is expected to save $2 billion annually and has been discussed for quite some time now. Package delivery is the most lucrative part of business for the USPS and it will continue on Saturday. There are other factors such as needing Congressional approval to make the move but that’s not what got me to thinking.

Package delivery is the money maker for the USPS. I would imagine that packages are delivered to addresses that are likely already receiving standard mail each day. In other words, the mail carrier is already going there anyway and there are no additional staffing or delivery costs incurred to also deliver a package as those costs are accounted for in the standard mail delivery.

Drop Saturday standard mail delivery and what happens? Saturday package delivery means staffing and delivery costs to customers that didn’t exist previously. I have to wonder just how profitable package delivery has been if it had to stand alone absent standard mail delivery such as UPS or Fed-Ex would do. Could it be that the accountants have been showing a package delivery division profit without prorating and spreading all of the infrastructure costs evenly? I have no idea, just asking. Without question, package delivery profits will decline on Saturday accordingly.

So, will the projected $2 billion in annual savings actually materialize once the dip in package delivery profits are accounted for? Who knows. After all, this is a government bureaucracy overseen by Congress. Realistically, what chance do they ever have of operating efficiently and making budget?

Maybe snow nor rain nor heat nor gloom of night will stay the couriers from the swift completion of their appointed rounds, but even they can’t escape the reach of the budget reaper.

Advertisements