THE US Postal Service (USPS) has announced that it will halt letter delivery services on Saturday in an attempt to reduce costs that left it $US15.9 billion ($A15.36 billion) in the red in 2012.
USPS chief Tom Donahoe, the US postmaster general, said the national mail agency was taking the step after waiting in vain for Congress to put through reforms that would help it shore up its finances on a long-term basis.
"The Postal Service has a responsibility to take the steps necessary to return to long-term financial stability and ensure the continued affordability of the US mail," said Donahoe.
The USPS said the move is expected to result in $2 billion in cost savings.
The five-day service will begin on August 5. But the USPS will continue to deliver packages on Saturdays, and post offices will remain open on Saturday.
The USPS has been hit hard both by the turn to email and other electronic communications, reducing the volumes of mail it carries, and by competition from more agile private firms like Fedex in the high-margin parcel business.
Its losses more than tripled in the year to September 30 from $5.1 billion in fiscal 2011, with more than $11 billion sucked off to pre-fund health benefits for USPS retirees far into the future.
While package service revenue grew by 8.7 per cent last year, overall mail volume fell 5.1 per cent and operating revenues fell nearly one per cent, to $65.2 billion.
Since 2006 the service has reduced the size of its workforce by 193,000, or 28 per cent.
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