Many online retailers depend on the U.S. Postal Service (USPS) to reliably deliver merchandise to customers, since the service is often less expensive than UPS (United Parcel Service) and delivers six days a week, something that UPS charges a significant premium for.
But the USPS lost $2.8 billion last fiscal year. And, for the fiscal first quarter that ended on December 31, 2008, USPS reported a massive $384 million dollar loss—potentially putting the Postal Service on track for yet another multi-billion dollar loss over the next fiscal year.
“We are taking bold steps to cut costs immediately. At the same time, we are examining, realigning and streamlining our business to address longer-term financial pressures while continuing to provide high levels of service to the America public,” said Postmaster General John Potter in testimony to the Postal Service governors.
“First, it is possible that the cost of six-day delivery may simply prove to be unaffordable” Potter continued. “If that should occur, it could become necessary to temporarily reduce mail delivery to only five days a week. We would do this by suspending delivery on the lightest volume days. Toward this end, I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week.”
While congress must still act on Potter’s request, a reduced USPS delivery schedule would not be good news for ecommerce merchants, especially since, as Potter put it, “The Postal Service is a vital economic engine in our national economy.”