Proposed 5-Day Delivery Week Could Harm E-Commerce
by Christina Lee on February 3rd, 2009
Postmaster General John Potter’s public plea for a shorter mail delivery week has called attention to how current correspondence has driven the United States Postal Service to debt, as well as how its downfall could later harm e-commerce.
With more personal and business correspondence done over e-mail than snail mail these days, Potter testified before a Senate subcommittee Wednesday to explain the financial need for one less delivery day during the week – not necessarily Saturday, but another day in which mail volume is usually light, such as Tuesday. The Postal Service has maintained a six-day delivery week since 1983, as instructed by federal law.
Potter made his proposal as the Postal Service reported a $2.8 billion loss over the past fiscal year, and predicts that it could lose over $6 billion over the next. Total mail volume fell by more than 9 billion pieces, or 4.7 percent compared to the year before. Its losses come even after cutting costs since 2002, by $1 billion per year.
Some studies show that with one less delivery day, the Postal Service could save billions of dollars, the Associated Press reports. A George Mason University study said that it could potentially save $1.9 billion a year. Meanwhile, a Postal Service study estimates that savings could total $3.5 billion.
If implemented, the shorter delivery week could result in online businesses turning to more expensive delivery services, such as UPS or FedEx. The higher costs could then pass on to the consumer, as Mark Argento, senior equity analyst of Craig-Hallum Capital, said to The E-Commerce Times.
Big online retailers like Amazon.com and eBay have yet to express any worries regarding Potter’s plea. A few other business owners have since reported mixed feelings.
Business owners, what do you think? Would one less day of Postal Service delivery harm your operations?