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As early as next spring, Saturday mail delivery to homes and businesses could become a thing of the past, as part of a cost-cutting strategy designed to keep the struggling U.S. Postal Service in business.

Though some Greater Des Moines customers see the service reduction as a trifling inconvenience, other companies’ operations depend greatly upon the Postal Service, and the move could cut into those businesses’ profits.

On March 30, the Postal Service formally requested an advisory opinion from the Postal Regulatory Commission on its plan to end Saturday deliveries. The commission has said it may take six months or longer to review the request, which also must receive congressional approval.

The change could drive up mailing costs for publishing companies as well as increase billing expenses for businesses of all types, said Craig Bjork, director of postal affairs for CDS Global Inc. A Des Moines-based affiliate of Hearst Corp., CDS Global provides subscription fulfillment services for 470 publications, as well as remittance processing services for companies throughout the United States.

CDS Global handles a big chunk of the total volume of magazines mailed across the country, generating nearly 2 billion address labels for magazine publishers annually.

“Timely delivery of magazines is a big concern, particularly for weekly publications that are timed to deliver on Saturdays and are now going to have to move to Monday,” Bjork said. “There could be a significant increase in costs (to publishing companies) to get issues out beforeSaturday.”

Action plan

Once a taxpayer-supported service of the U.S. government, the Postal Service in 1992 shifted to an independent, self-funded model built on the assumption that mail volume would continue to increase with the population. No one could have foreseen the tremendous impact the Internet and electronic payments would have on the ways Americans conduct personal and business transactions.

After peaking in 2006 at a record 213 billion pieces, the volume of U.S. mail has declined each year since. In fiscal 2009, which ended Oct. 31, the volume of mail had decreased to 177 billion pieces, a 13 percent drop from fiscal 2008, and the volume is expected to decline another 15 percent by 2020.

“There is no longer enough volume to generate the amount of revenue necessary to support six-day delivery, and there won’t be enough volume in the future,” the Postal Service concluded in a Five-Day Delivery Plan it introduced last month.

The shift to weekday-only deliveries is part of an action plan outlined in March by U.S. Postmaster General John Potter that’s expected to reduce costs by $3 billion in its first year and about $5 billion each subsequent year. The Postal Service lost $3.8 billion last year, as it delivered shrinking volumes of mail to a delivery territory that’s growing by approximately 1 million additional stops each year.

The lower volume means the average household, which received five pieces of mail each day 10 years ago, now receives four pieces. Ten years from now, the average will be just three pieces a day.

“That makes each stop more expensive,” said Richard Watkins, a Postal Service spokesman in Kansas City, Mo. “If the Postal Service does nothing and operates as we do today, we’d be looking at a loss of $238 billion over the next 10 years.”

Watkins said the Postal Service does not have state-by-state estimates for potential staffing reductions. An estimated 300,000 postal workers will become eligible for retirement within the next 10 years. Of approximately 9,000 postal employees in Iowa, about 4,000 will be eligible to retire by 2015, Watkins said. Those positions won’t necessarily be eliminated, he said.

“We’re actually talking now about the strong possibility of having to hire within the next several years to replace some of these positions,” he said.

Saturday delivery will continue to post office boxes, which the Postal Service hopes will increase demand for – and revenue from – that service. Post office box fees generated nearly $905 million in revenues last fiscal year.

Meredith Corp., which depends upon the Postal Service to deliver its flagship magazine titles that include Ladies’ Home Journal and Better Homes and Gardens, is more concerned about the Postal Service’s long-term viability than losing Saturday deliveries, spokesman Art Slusark said.

“Rather than continuing to increase rates and drive more people away from the Postal Service, we think ending Saturday delivery is much more preferable,” he said.

The company has taken a number of steps over the past several years to keep its postal costs in line, Slusark said. Among those measures have been to do more bundling of outgoing mail to achieve better rates, and moving many of its customer transactions from mailed correspondence to online.

Another high-volume commercial mailer, Wellmark Blue Cross and Blue Shield, has tried to reduce mailing costs by encouraging online transactions, said Rob Schweers, a spokesman.

“We have a high percentage of customers who pay their bills electronically, and we encourage our members to choose electronic options for other regular communications,” he said. “Paying your bill, or receiving explanation of benefits documents online not only saves on postage, but is also better for the environment.”

Another strategy has been to have its remittance mail sent to post office boxes rather than street address, so that that correspondence will not be impacted by the elimination of Saturday delivery, Schweers said.

Ben Hildebrandt, a spokesman for the Iowa Bankers Association, said the impact on financial institutions and their customers from eliminating Saturday mail delivery should be minimal.

“Banks don’t count Saturday as a business day,” Hildebrandt said. “So if a transaction is made on a Saturday, it doesn’t count until Monday.”

Additionally, customers have increasingly opted to receive monthly statements and other correspondence from their banks electronically, which has reduced the volume of mail that banks are sending out, he said.

Mike Draper, an East Village small business owner, said he views the loss of Saturday mail as inconsequential, even though his T-shirt business, RAYGUN, mails between 20 and 25 online orders daily.

“It’s just T-shirts; it’s not life or death,” Draper said. “If they have to go out Monday, it’s not the end of the world.”

At The Mailbox Store in Urbandale, owner Brian Gallien said he makes most of his money through FedEx and UPS shipments, not from reselling postal services.

“It may give us a little bit of an edge as far as parcel shipping, especially for FedEx, because they deliver to homes on Saturday as part of the business week,” he said.

Gallien said he doesn’t know yet whether Saturday mail will be delivered to the postal boxes that he rents at his store. However, “I really don’t think it’s going to make one bit of difference to us,” he said. “People usually rent boxes because we can accept packages, whereas the postal service can’t (to a box). I just haven’t seen anyone caring one way or the other. People just really don’t seem to care about the Saturday delivery, from what I’ve talked to them about.”

The difference could be significant for businesses awaiting payments from customers, though.

In addition to outgoing mail, CDS Global receives approximately 175 million pieces of remittance mail annually, the majority of which is handled at its processing plants in Des Moines, Red Oak, Harlan and Boone. That mail, which includes customer payments, orders, renewals and customer service transactions, will continue to come in to CDS Global seven days a week. But customers may not allow enough time for those remittances to be received on a timely basis.

“Any time you’re going to lengthen the time the mail’s going to be delivered, there’s a concern of how much crossover there’s going to be of payments and bills,” Bjork said. “Businesses will have the distinct possibility of sending out additional notices if customers aren’t hitting the remittance deadlines.”

It’s too early to tell whether eliminating Saturday delivery might cause CDS Global, whose remittance processing centers employ about 1,100 people in Iowa, to reduce its work force, Bjork said.

“If this thing moves forward, and there are a lot of ifs, there will be an adjustment period, and then it will settle down,” he said.