According to sources, the United States Postal Service will soon be putting an end to Saturday mail delivery. While Post Offices that are already open on Saturdays will continue to maintain Saturday hours, the USPS plans to cut back mail delivery in August.

The agency, which is struggling financially, intends to continue package delivery on Saturdays but discontinue Saturday letter and mail delivery. The change is attributed to the major decline in physical mail in a largely online society. Email and Internet services that allow instant communication has made physical mail and letters largely obsolete. While mail itself has seen a drastic decline, the USPS’s package delivery has seen a significant increase by 14 percent since 2010. The change is reported to aim at saving about $2 billion dollars annually.

According to postmaster general and CEO Patrick R. Donahoe, “The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits.”

Donahoe said in a statement prepared for the announcement, “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”

Though the change will eliminate Saturday delivery to homes and business, the USPS will still be offering Saturday post office box mail deliveries in addition to Saturday package deliveries. In an attempt to make the change as smooth as possible for residential and business customers, the USPS has made the announcement for the change nearly 6 months in advance.

According to Donahoe, “The American public understands the financial challenges of the Postal Service and supports these steps as a responsible and reasonable approach to improving our financial situation. 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 U.S. Mail.”

Donahoe states that the change will lead to USPS employee reassignment and attrition and believes that the US public is in support of the five day change as a cost saving measure. According to Donahoe, Postal Service market research and other research has indicated that nearly 7 in 10 Americans support the change.

In November USPS reported an annual loss of $15.9 billion for the last budget year and forecasts even more issues in 2013. The agency was forced to default on billions in retiree health benefit prepayments to avert bankruptcy.

The biggest problem the USPS faces is not the reduction in mail flow, but the mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. According to sources, without these and other labor related expenses, the agency sustained an operating loss of $2.4 billion –which was lower than the previous year.

Although retiree health benefits are putting the agency more deeply into debt, congress imposed the requirement in 2006 and has thus ignored the addressing the fact that no other government agency is required to make such a payment for future medical benefits. After lawmakers finished their session without examining the USPS issue, officials moved ahead to accelerate their own plan for cost-cutting.

Although the change in delivery schedule is one of the actions needed to restore financial stability to the agency, the USPS states they still need lawmakers to act on the health benefit issues.

The price for First-Class Mail single-piece letters will increase by just a penny when prices change in Jan. The new 46 cent Forever stamps will allow customers to mail letters to any location in the United States. Forever stamps are always good for mailing a one-ounce letter anytime in the future regardless of price changes.

On Jan. 27, the USPS also implemented the following rate increases:

• Letters (1oz.) — 1-cent increase to 46 cents
• Letters additional ounces — unchanged at 20 cents
• Letters to all international destinations (1oz.) — $1.10
• Postcards — 1-cent increase to 33 cents