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Postal Service plan to end Saturday delivery likely to affect business

February 06, 2013|By W.J. Hennigan

The U.S. Postal Service's announcement that it plans to stop delivering most mail on Saturdays is likely to have an effect on the business world.

The Postal Service said it made the announcement Wednesday -- about six months in advance of implementing a five-day mail delivery schedule on Aug. 5 -- to give residential and business customers time to plan and adjust.

Hallmark Card Inc., the Kansas City-based greeting card company, said it anticipated problems with the decision. 

"Hallmark continues to believe a reduction in service will not induce customer loyalty and will negatively impact small towns and small businesses that depend on timely, affordable, reliable mail delivery," the company said. "This move should only be considered once all other cost-saving options are fully explored and acted upon."

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Online retailer said it was not worried about the announcement's effect on its business.

"We use multiple carriers in all of our geographies to ensure we are delivering products to customers on time," said Scott Stanzel, a company spokesman.

Netflix Inc., the Los Gatos, Calif.-based DVD-by-mail company, would not comment on the announcement, but has said in the past that it needs to have a healthy postal service.

The Postal Service's announcement came with proviso: Six-day-a-week delivery of packages will continue, allowing the agency to stay competitive with other carriers, said Postmaster General Patrick R. Donahoe.

The Postal Service said there has been recent strong growth in package delivery -- a 14% increase since 2010. It projects continued strong growth in that service through the coming decade as an increasing number of big retailers join online companies such as Amazon in selling their wares online.

"Our customers see strong value in the national delivery platform we provide and maintaining a six-day delivery schedule for packages is an important part of that platform," Donahoe said. "As consumers increasingly use and rely on delivery services -- especially due to the rise of e-commerce -- we can play an increasingly vital role as a delivery provider of choice, and as a driver of growth opportunities for America's businesses."

Wall Street first-glance reaction was a bit of good news for other delivery services: United Parcel Service Inc.'s shares were up 2 cents, or .02%, to $80.82. FedEx Corp.'s shares were up 69 cents, or .7%, to $105.76.

In a statement, FedEx spokesman Jess Bunn said: "While it is too early to say precisely what the eventual impact to FedEx would be from the U.S. Postal Service's proposed Saturday delivery changes, it appears the effect would be minimal. FedEx has an outstanding business relationship with the USPS, both as a customer and a supplier, and looks forward to its continuation."


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