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Source:  http://online.wsj.com/article/SB10001424127887323838204579002921161305780.html

Post Office Sees Gain in Lost Weekend

As Agency Eyes Steps to Stem Red Ink, Residents on a Rural Route Brace for Possible End of Saturday Mail

CHARLES TOWN, W. Va.—On the oldest rural postal route in the U.S., mail carrier Richard Morrison greeted customers by name as he stuffed letters in mailboxes alongside a farm field in eastern West Virginia.

The ritual, repeated on weekends when customers are home, could be one of the casualties of the U.S. Postal Service's inability to stanch its red ink. With the agency hemorrhaging money, including a $3.9 billion loss in the first nine months of fiscal 2013 announced Aug. 9, the service and Congress are contemplating sweeping changes, including ending Saturday letter delivery, increasing privatization and raising stamp prices.

Jared Soares for The Wall Street Journal

U.S. mail carrier Richard Morrison drives down a gravel road to deliver a package on his Saturday rounds.

Saturday delivery in a way represents the Postal Service's dilemma in returning to profitability. Younger populations have replaced many mail services with the Internet, mobile devices and computers, leading to a plunge in volume, while older people, particularly in rural areas, still rely heavily on mail services, creating a small but vocal voice of concern about reduced services.

"Customers are confused by everything they're hearing," Mr. Morrison said. "I think they are going to lose trust in the ability of the Postal Service to do the job." Retirees on his route worry changes could force them travel farther to pick up mail, or make for slow bill payments and disruptions in medicine shipments, he said.

In October, Mr. Morrison, 62 years old, will retire after more than two decades of driving his second-hand postal van down dirt roads and into new subdivisions. He frets that his route will eventually be served by a patchwork of contractors and part-time employees that will lack a connection to the community.

The Postal Service, which lost $15.9 billion last year, is on its way to recording a multibillion-dollar loss for the seventh consecutive year. Cutting Saturday letters, a $2 billion annual savings, would help, but it isn't a cure. The agency faces an even bigger problem covering retiree health obligations, which have caused it to almost run out of cash. If the Postal Service can't pay its bills, a taxpayer bailout is a likely option.

The agency wants to control its own health programs, have the freedom to close processing plants and post offices and set its own delivery schedule. "We need a bridge that gets us all the way to the other side. Half-measures are about as useful as half a bridge," Postmaster General Patrick Donahoe said at a congressional hearing last month.

Decades of Delivering Mail

See key dates in the history of the U.S. Postal Service.

Photos

Jared Soares for The Wall Street Journal

Richard Morrison drove down a gravel road along his delivery route in West Virginia on a Saturday in March.

The agency receives very little in the way of tax dollars but is subject to congressional oversight, giving lawmakers a big say in how the agency restructures. Because mail delivery touches every American household—and congressional district—lawmakers have so far struggled to advance unpopular postal changes.

"Those in my district are among the most reliant on the Postal Service," said Rep. Adrian Smith (R., Neb.), whose vast district covers about three-quarters of his rural state. Speaking at a recent postal hearing, he said it's "not just a convenience. It is a pathway to information, products, medications and services."

There are fresh signs, however, that lawmakers may be willing to budge.

Sens. Tom Carper (D., Del.) and Tom Coburn (R., Okla.) introduced a bipartisan postal overhaul bill this month that would allow Saturday letter delivery to be eliminated after a year, while preserving package services.

"Americans have realized the hard truth that the Postal Service is on the verge of financial collapse," Mr. Carper said.

A Republican-controlled House committee also recently approved a bill that would allow most Saturday deliveries to end immediately. That bill, which has drawn opposition from House Democrats, calls on the agency to look at hiring private contractors and seeks to curtail door-to-door delivery in favor of curbside and community boxes.

Lawmakers are expected to work on postal legislation in September, congressional aides said.

Write to Eric Morath at eric.morath@wsj.com

A version of this article appeared August 16, 2013, on page A4 in the U.S. edition of The Wall Street Journal, with the headline: Post Office Sees Gain in Lost Weekend.

Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved

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