Abstract
In 2013, the U.S. Postal Service (USPS) announced plans to discontinue the delivery of letters and flats on Saturdays, while continuing parcels delivery (“plan 5+”). This would lead to sharply reduced street times on Saturdays, and to a shift of workload from Saturdays to other weekdays, in particular Mondays. Understanding the net effects of modified delivery schedules and reduced delivery frequency concerns an increasing number of postal operators worldwide. This contribution may hence shed some light on the issue optimizing delivery frequency as a response to declining letter volumes.
This paper is derived from a study conducted by Swiss Economics for the Postal Regulatory Commission. www.prc.gov/. The views expressed in this paper are those of the authors and do not necessarily represent the opinions of the U.S. Postal Regulatory Commission.
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Notes
- 1.
USPS press release No. 13–019 from February 06, 2013.
- 2.
Own calculations based on the USPS DOIS data provided.
- 3.
The assumption of fixed routes on regular delivery days was validated for 230 randomly chosen USPS routes.
- 4.
The “greedy” algorithm moves from one point to the nearest unvisited neighbor.
- 5.
Regressions were run with log(.) and quadratic specifications. These were not superior to this simple linear model.
- 6.
In contrast to city carriers, rural carriers are paid by the item delivered. As a consequence, savings in route and access times translate into USPS savings for city routes only and hence the calculations focus on city routes.
- 7.
There are 53 Saturdays in FY 2012.
- 8.
This is as accurate as possible as we do not have any information on address level volumes.
- 9.
A delivery point can have several addresses.
- 10.
See USPS-LR-FY12-44 for productive hourly wage rate and USPS-LR-FY12-24 for piggyback factors.
- 11.
521 k additional hours for parcels delivery times 59.42 times 8.69.
- 12.
For further information see Trinkner and Haller (2014).
- 13.
Technically, this is limited to the special case where no other plans exist where one or several universal service obligations are binding. If there are other service modifications that are profitable but not feasible because of the USO, then the net costs are higher and the net costs of plan 5+ are one element of the net costs.
- 14.
Postal Regulatory Commission, Report on Universal Postal Service and the Postal Monopoly, December 19, 2008, page 123.
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Robinson, M.H., Klingenberg, J.P., Haller, A., Trinkner, U. (2015). Estimating the Financial Impact of Discontinuing Saturday Delivery of Letters and Flats in the U.S.. In: Crew, M., Brennan, T. (eds) Postal and Delivery Innovation in the Digital Economy. Topics in Regulatory Economics and Policy, vol 50. Springer, Cham. https://doi.org/10.1007/978-3-319-12874-0_12
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