UPS nor FedEx will benefit much from cutting a day of service from USPS. By law, neither can compete in first class mail....may pick up some packages for Priority or Express mail customers but most of those only ship with the post office because of cost--not service, tracking, insurance, etc. Most priority mail and express mail packages ultimately travel by FedEx or UPS now anyway--at least airport to airport.
Reduction in FCM (First Class Mail) and increase in Junk mail (% to total) & increase in Priority Mail are other reasons the post office is losing out. Priority mail cost to you and me does not cover it's cost to the post office. FCM revenue USED TO subsidize Priority, Express & Junk Mail. It doesn't anymore. Our 1 ounce stamp cost is about 1/2 of what it costs in Germany and much of the EU. For the post office to really be profitable, they need to have profitability within each class of mail and stop all the cross-subsidization.
And....cutting a day of delivery--especially Saturday, is supposed to save about $3B annually. Even though they have much larger projected deficits going forward, that's a start. Unfunded pension liabilities are HUGE for them as well as.....drum roll.....current employee and retiree health care costs. Another method they've been looking at is reduction in benefits. Also closing about 10% of the post office locations as well.
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