The Postal Service estimates the “full-up” net cost savings from five-day delivery is about $3 billion a year (see Exhibit 3). This is the $3.3 billion gross savings less $0.2 billion in net contribution loss due to a slight volume impact.
“Full-up” savings refers to the annual savings and associated volume reductions after the transition period needed to reduce staffing and adapt contracts, plants, and equipment to eliminate Saturday delivery. These are estimates of the annual savings that would have occurred in FY 2009 if five-day delivery had been in effect that entire year.
