Postal Service looks at ending Saturday delivery

WASHINGTON (CNN) -- Neither snow nor rain nor heat nor gloom of night keeps the U.S. Postal Service from delivering the mail -- but weekends soon might.

Faced with huge projected losses, rising costs and a slowing business, the Postal Service announced Tuesday it will study cutting back to a five-day week that would eliminate its Saturday delivery.

The agency, which jacked up the cost of a stamp by a penny to 34 cents in January, also will examine cost-saving initiatives by consolidating facilities and closing some postal plants and offices across the country.

The agency's governing board wants management to report the study results within 90 days. The board said the Postal Service is expected to lose $2 billion to $3 billion this fiscal year.

"The Postal Service's ability to meet its statutory mandate to bind the nation together needs to be protected," said S. David Fineman, the board's vice chairman.

The board is committed to reducing spending by $2.5 billion by 2003. Over the next five years, the agency plans to cut administrative costs by 25 percent and transportation costs by 10 percent.

Earlier this month, the Postal Service froze more than 800 construction projects to cut costs.

The study will examine ending Saturday delivery for all mail, except overnight delivery.

The governing board recently wrote to President Bush and congressional leaders, saying, "We are taking the steps within our power to sustain the institution. Long-term solutions, however, require, substantial changes to our regulatory framework."

The Postal Service leases about 27,000 facilities a year and delivers mail to 134 million homes and post offices boxes a year.

The agency said among the factors affecting its operations are rising fuel costs, more people using e-mail over regular mail, an increasingly competitive marketplace, wage increases and labor costs.

Employee pay and compensation accounts for 76 percent of the agency's cost. The Postal Service has nearly 800,000 employees, including 250,000 veterans.

A critic of the agency said the Postal Service should examine cutting its work force.

"The Postal Service should be focusing on issues they can implement now and management decisions they can implement without congressional approval," Robert McLean, director of the Virginia-based Mailers Council, a coalition of businesses and mailing groups, told The Associated Press.

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