Delivering the Future: a Balanced Approach
Five-Day Delivery is Part of the Solution

Chapter 5 - Financial implications

Estimated savings

Discontinuing Saturday delivery and collections would result in significant savings by eliminating work performed by city and rural carriers. These savings account for $2.7 billion of the estimated $3 billion total.

City carrier savings will result from no longer needing the carriers who handle the sixth delivery day. This work is primarily performed by carrier technicians employed specifically for this purpose. These nearly 25,000 positions would no longer be needed. Other part-time and full-time assignments used to replace the regular carrier on the sixth day would also no longer be needed.

To determine the savings for city carriers, analysts considered the profile of average Saturday work — what portions would be saved by eliminating Saturday delivery, and what would still need to be done Monday through Friday to deliver Saturday mail volumes.

Most of Saturday’s office time would be transferred to other days, Monday through Friday. Most of Saturday’s street time would not be needed to deliver volume during the week.

If five-day delivery had been in effect throughout FY 2009, the estimated city carrier work hour reductions would have been 47 million, or about 12 percent of FY 2009 city carrier hours.

Factors such as changes in the share of mail volume for Monday delivery, which is difficult to forecast, may have some impact on savings.

Over the long term, attrition will result in fewer carrier technicians or other full-time carriers. Initial savings would come from reducing the number of non-career transitional employees.

The estimated work-hour savings for the four types of rural routes are based on the current rural carrier compensation rates. Estimated savings are 18 million work hours, nearly 10 percent of FY 2009 rural carrier hours.

The bulk of the savings would come from work-hour reductions for rural carrier associates (RCAs). The wage rate for RCAs is about half that for regular rural carriers

There also would be vehicle-related savings. Reduced driving would provide savings in fuel and maintenance costs for postal vehicles, and reduce payments for equipment maintenance allowances for carrier-owned vehicles.

Eliminating Saturday delivery also would result in supervisor work reductions. These work reduction savings have been offset to reflect the cost of continuing to deliver Express Mail on Saturday.

About $200 million in annual savings could be realized because of lower processing costs at plants and Post Offices. Moving outgoing sorting from Saturday to Monday would allow savings in plant clerks, mail handlers and supervisors, and reduced maintenance.

Further, eliminating Saturday delivery and collections would reduce the need for clerk staffing at Post Offices. While much of the work formerly performed on Saturday would need to be done Monday through Friday instead, there would still be savings from the activities for which costs are driven by the number of routes and days of delivery.

About $380 million in annual transportation savings would be realized by eliminating Saturday delivery via highway contract, postal vehicle drivers, and contract delivery. Highway contract savings would result from a reduced need for highway transportation on Saturday and Sunday.

Air transport savings would be achieved because less mail would require use of air transportation. Also, eliminating Saturday carrier delivery and collection reduces the need for vehicle service drivers to transport mail between Post Offices and plants on Saturday. Contract delivery savings would also result by modifying contracts to eliminate Saturday delivery.