PRC issues advisory opinion on ending Saturday delivery

The Postal Regulatory Commission has issued its long awaited advisory opinion on the US Postal Service’s proposal to do away with Saturday delivery. The opinion doesn’t make a yes or no recommendation, but in 211 pages of testimony and analysis, suggests that some of the postal service’s estimates of cost savings are over-estimated, while service impacts are sometimes under-stated.

Key findings of the Commission’s Opinion include:

  • The Commission’s annual net savings estimate is $1.7 billion.
    • The Postal Service’s savings estimate is $3.1 billion.
  • Full savings in either case would likely not be achieved until year three after implementation.
  • The Commission’s estimate of net revenue losses due to volume declines caused by the service cuts is $0.6 billion.
    • The Postal Service estimate of net revenue losses is $0.2 billion.
  • The planned changes would cause an average of 25 percent of First-Class and Priority mail to be delayed by two days.
  • The Postal Service did not evaluate the impact of the proposal on customers who reside or conduct business in rural, remote, and non-contiguous areas.
  • Customers in rural, remote, and non-contiguous areas can be particularly affected by the Postal Service’s plans. The Commission received significant input from rural America and traveled to South Dakota and Wyoming to meet directly with rural customers and community leaders.

Several commissioners submitted separate opinions, with Chairman Goldway finding that:

“The Commission’s advisory opinion describes how the Postal Service’s plan will produce a significant and disparate reduction in levels of service throughout the nation, and that the impact of that reduction in service will be particularly felt in remote and rural areas.

With this proposal, the Postal Service is challenging established national postal policy in two main ways. First, it is asking to significantly reduce service from 1983 levels yet maintain the rates set for six-day service. In its testimony, the Postal Service acknowledges that a reduction in service could be characterized as a hidden cost. It would amount to a de facto price increase. The American public will pay the same amount tomorrow yet receive a level of service quality that falls well below today’s service levels.

While Dan Blair wrote that

In my view, the proposal represents a dramatic step toward realignment of the Postal Service’s universal footprint so that postal operations and expenses are in line with revenues.

But at the same time:

In proposing to reduce days of delivery, the Postal Service must balance service against solvency. A reduction in days of delivery will produce a significant cost savings, but the Postal Service must show Congress that these reductions help, not hurt, its future financial viability to sustain the needs of the Nation.

PRC Advisory Opinion on Ending Saturday Delivery

Press release: PRC issues Advisory Opinion on 5-day Delivery Proposal

  • Waste of Money

    This is unbelievable…it took the PRC a year to evaluate the elimination of Sat delivery and they still couldn’t come up with aa definative answer. The PRC and Congress are full of morons…it’s no wonder nothing ever gets accomplished.

  • big route

    Can I get a job on the PRC , I can say yes or no with no problem. What a waste of the tax money that is stolen from me every pay period. Goverment has spent 9.3 miillion to prosecute Barry Bonds for lying to congress about steriods, why not prosecute the PRC for wasting tax payers money.

  • Mike

    One year and 211 pages later and they can’t give a definite yes or no ?? Gov’t bureaucracy at its finest! Good thing these people aren’t on the Supreme Court!

  • herman

    While the Commission as a whole certifies the preceding advisory opinion, and its extensive analysis of the potential cost savings.

    NOW DO IT !

  • herman

    Ruth Goldway should be fired.

  • herman

    Rolando is already SPUN this to act like its over. What a boob.
    Its 5 day OR we take it up the as% by Rolando next contract.

  • Ed

    1.7 Billion or 3.1 Billion, either is a large savings. Devide either by .44 and see how many stamps you have to sell in a year. 25% of first class mail would be delayed. They need to look at a Post Office on a Sat. That’s the lightest day of the week. Maybe 5%. Business don’t care anyway and they get the most of it. The people who get the mail are the bosses and guess what, they are off on Saturdays. Turn this over to the Board of Governors and fire the PRC. Save us Billions.

  • cindy

    Talk about lack of leadership.
    I would have more respect for a
    decision that I did not like than no decision
    at all.