Mail delivery is central to USPS’s mission and role in providing postal services to “bind the nation together through the personal, educational, literary, and business correspondence of the people.” USPS is required by law to provide prompt, reliable, and efficient services, as nearly as practicable, to the entire U.S. population. USPS is also required to maintain an efficient mail collection system. These and related requirements are commonly referred to as the “universal service obligation.” The PRC has reported that delivery frequency is a key element of universal postal service. Further, provisions in annual USPS appropriations since 1984 mandate 6-day-a-week delivery and rural mail delivery at certain levels. The frequency with which customers receive mail service from USPS has evolved over time to account for changes in communication, technology, transportation, and postal finances. As recently as 1950, residential deliveries were made twice a day. It is useful to note that while most current customers receive delivery service 6 days a week, some customers receive 5-day or even 3-day-a-week delivery, including businesses that are not open 6 days a week; resort or seasonal areas not open year-round; and areas not easily accessible, some of which require the use of boats, airplanes, or trucks to deliver the mail. Mail delivery accounted for nearly one-third of USPS’s $76 billion in expenses in fiscal year 2010. That year, USPS recorded compensation and benefit costs of nearly $23 billion and 586 million work hours for its more than 310,000 full- and part-time mail carriers. Delivery is labor intensive and includes carriers manually sorting certain mail into the sequence in which it will be delivered and delivering mail to, and collecting it from, nearly 131 million residential and business addresses. Moreover, this delivery network has grown on average by over 1 million addresses each year over the last 5 years, resulting in additional personnel, fuel, and vehicle costs. Declines in volumes, however, challenge USPS’s ability to make corresponding cost reductions because some activities—such as providing 6-day delivery—continue regardless of mail volume. Former Postmaster General John Potter testified in January 2009 that 6- day delivery was becoming unaffordable and requested that Congress not include the restriction in annual appropriations legislation so that USPS could move to a 5-day delivery schedule. USPS had been unable to cover its costs, many of which were difficult to cut, as mail volumes and revenues were declining. USPS developed a cross-functional, internal task force composed of experts across various operational areas to examine a variety of topics, including the economic value, financial and operational impacts, and business risk of eliminating a day of delivery. The task force solicited input from the public, mailing industry, and postal unions and management associations. Based on this work, the task force prepared USPS’s March 2010 5-day delivery plan, which was approved by USPS’s Board of Governors. Table 1 summarizes highlights of this plan. The plan recognizes that certain customers may be negatively affected by the proposed reduction in service; however, USPS believes the reduction is necessary to improve its long-term financial viability. In a March 2, 2011, testimony, the current Postmaster General Patrick Donahoe reiterated USPS’s position on 5-day delivery, stated there is no longer enough mail volume to support a 6-day delivery model, and said that moving to a 5-day schedule would strengthen USPS’s future. USPS estimated that if 5-day delivery had been in effect in fiscal year 2009, it would have realized $3.1 billion in net savings—including $3.3 billion in gross savings less $0.2 billion in revenue losses due to a slight volume decline. Of these savings, $2.7 billion would have resulted from reducing work performed by city and rural carriers. City carriers employed specifically to handle delivery on the sixth day, as well as other part- and full-time city carriers used to replace regular carriers on the sixth day, would no longer be needed. USPS plans to achieve these work-hour reductions by attrition, involuntary separations, or other strategies to reduce work hours. Aside from these city-carrier savings, other savings would be achieved by eliminating rural-carrier work hours that would no longer be needed on Saturday, as well as other associated vehicle, supervisor, and transportation costs. USPS’s estimate of gross savings was based on “full-up savings,” which assumed that the transition to 5-day delivery, including the associated operational and workforce changes, had been fully implemented. USPS has not reported how many years this transition would take, but has noted that it would include realigning USPS’s workforce through attrition and other changes. Tables 2, 3, and 4 summarize USPS’s gross savings, mail volume, and net revenue estimates, including the supporting methodology and assumptions. These assumptions, methodologies, and conclusions have generated a significant amount of debate since USPS requested an advisory opinion from PRC in March 2010. USPS is required to request a PRC advisory opinion on a service change when USPS determines that there should be a change in the nature of postal services that will generally affect service on a nationwide basis. The resulting PRC public proceeding has provided a detailed record that includes, among other things, USPS’s proposal and its supporting evidence; input provided by interested parties through oral and written testimony and other supporting evidence; and various statements and rebuttals submitted by USPS and interested parties. PRC issued its nonbinding advisory opinion on March 24, 2011; however since our audit work was completed in early March, this opinion was not included in this report. USPS is likely to achieve significant cost savings by reducing delivery from 6 days to 5 days because it would eliminate costs associated with carriers traversing their routes on Saturday. During the PRC proceeding, however, stakeholders raised a variety of criticisms about the assumptions, methodology, and conclusions USPS used to determine its cost-savings estimate. Exchanges have occurred between the stakeholders and USPS about these criticisms. Our analysis of these exchanges and our independent analysis identified a key area of concern that may have a considerable impact on USPS’s estimate of net financial savings—how efficiently USPS can absorb the cost of its workload transferred from Saturday to weekdays. USPS assumed that most of the Saturday workload transferred to weekdays would be absorbed through more efficient operations. According to USPS, this assumption was based on operational judgments that excess capacity in city-delivery operations would be used to accommodate this shifted mail volume because, among other things, the time associated with certain carrier activities (i.e., loading mail into mailboxes) could be performed with greater mail volumes without much increase in work hours. USPS also assumed that a significant portion of its delivery operations would not be substantially affected because this work must be performed regardless of mail volumes (e.g., driving the route). USPS stated it expects that absorbing shifted mail volumes would raise city-carrier productivity, and in doing so, would reverse the productivity declines experienced from shrinking mail volumes. Specifically, USPS has reported that city-carrier productivity has decreased in recent years as mail volume has declined. USPS stated that in a 5-day environment, with Saturday volume transferred to weekdays, higher carrier productivities would be reached. The National Association of Letter Carriers (NALC), which represents city carriers, expressed concerns that this higher city- carrier productivity may not be realized. Specifically, it stated that recent route adjustment efforts have resulted in routes that have little or no excess capacity to absorb the transferred volumes. If certain Saturday city- carrier delivery work hours were not absorbed under 5-day delivery (when mail is transferred to other days of the week), USPS estimated the cost savings would be reduced by up to $500 million. To the extent to which USPS can absorb this Saturday workload, city-carrier productivity and cost savings should increase. We believe that USPS could realize some increase in city carriers’ productivity under 5-day delivery, but the extent to which such an increase would be realized and workload from Saturday to weekdays would be absorbed between Monday and Friday would depend on several factors. These factors would include how effectively USPS implemented its 5-day delivery plans and managed its city carriers and their workload based not only on 5-day delivery, but also on other actions to increase delivery efficiency, such as adjusting delivery routes and deploying flat-mail sorting equipment. In addition, the Greeting Card Association raised concerns during the PRC proceeding about the compensation rates and attrition levels USPS used in calculating its initial work-hour savings. USPS acknowledges it will not achieve its estimated savings from 5-day delivery within the first year of implementation, in part because some savings are based on realigning USPS’s workforce over time through attrition and other changes. USPS can use workforce strategies to support its workforce transition, such as not filling vacancies before implementing 5-day delivery or offering early- out retirement. USPS also has flexibility to reduce hours for different types of noncareer part-time employees whose wages vary widely, but are generally less than the wage levels USPS assumed in its cost-savings estimates. The timing and amount of savings achieved would be influenced by how these strategies were employed and when eligible employees decided to retire. USPS and many others agree that 5-day delivery will produce some volume loss as mailers and customers see service reduced with the elimination of Saturday delivery. Concerns have been raised, however, that USPS may have understated the potential volume losses based on questions about the methodology USPS used to develop its estimate and the impact of other factors that can affect mail volumes. During the PRC proceeding, for example, some stakeholders raised questions about USPS’s methodology for adjusting mailers’ estimates of how 5-day delivery would affect their mail volumes. USPS adjusted these estimates in one direction which could lead to estimates that would underestimate potential volume loss in a 5- day environment. For example Example using USPS methodology. If a business mailer estimated (1) a 50,000-piece volume loss and (2) it was 50 percent likely to modify its mail volume under 5-day delivery, USPS adjusted the mailer estimate and incorporated a 25,000-piece volume loss into its analysis. Alternative methodology. If a business mailer estimated (1) a 50,000-piece volume loss and (2) it was 50 percent likely to modify its mail volume under 5-day delivery, it may have been more appropriate to adjust the estimated loss in both directions. Under this methodology, the analysis could incorporate losses of 25,000 and 75,000 pieces. Alternative methodology. Make no adjustments and incorporate the mailer estimates at face value. Although USPS indicated that its method of adjusting mailer estimates was a standard industry practice, decision makers may find it useful to have an analysis that reflects adjustments in each direction or just takes the mailer estimates at face value. In addition, some stakeholders expressed concern about potential bias in USPS’s mailer surveys supporting its estimate of a 0.71 percent volume loss resulting from a shift to 5-day delivery—some said that the questionnaire language elicited overstatements of volume loss, while others said that it elicited understatements of volume loss. USPS stated that its estimate likely overstated the volume and revenue losses that would result from its 5-day delivery proposal because respondents were asked about service cutbacks that USPS subsequently dropped after conducting the survey. According to NALC, however, aspects of the questionnaire language encouraged respondents to understate the degree to which 5-day delivery would affect their future mail volumes. USPS responded that the questionnaire was designed to address potential biases and was carried out in a manner that avoided them. In addition to these methodological issues, information collected from our survey of mailer groups in the summer of 2010 suggests that these groups are somewhat uncertain about how 5-day delivery would affect future mail volumes. For example, when asked “do the members of your organization expect USPS’s proposal for 5-day delivery to affect the mail volumes that they or their customers send?” 51 percent of respondents answered “yes,” 29 percent “no,” and 20 percent “not sure” (see app. II for survey results). Five-day service is only one factor among many others, such as postage prices, the availability of electronic alternatives, competition, the cost-effectiveness of mail, quality of service, and ease of use that residential and business customers consider as they plan their current and future use of mail. Changes in any of these key factors may affect future mail volume, particularly given the uncertainty about the effects of 5-day delivery. Implementing 5-day delivery would require USPS to realign its operations network to increase efficiency, maintain service, and address man y of the operational issues raised by stakeholders. To its credit, USPS has dedicated a substantial amount of staff time and other resources to s the staff, system, network, and operational realignments needed to transition to a 5-day environment and has developed communication and implementation plans to support this effort. Risks remain, however, tha could threaten US financial targets. PS’s ability to implement these plans and achieve its Stakeholders have raised a variety of operational issues about USPS’s proposal, such as the extent to which USPS will be able to maintain high- quality service; align its processing, retail, and delivery network with changes in workload; and communicate changes with stakeholders. These operational issues would have a direct impact on its ability to capture its estimated cost savings and retain volumes. To address these issues, USPS has developed ommunication plans for internal and external stakeholders, including employees, mailers, and the public, and escribe the major tasks, milestones, and time frames needed to transition implementation plans across functional areas, such as delivery, transportation, mail processing, and post office operations. Th d to 5-day delivery within 6 months of congressional approval. Because USPS field officials will play a major role in making these changes, USPS headquarters officials are working with field-staff representatives to develop implementation guidance. This guidance, wh lized in March 2011, will include checklists of key steps that is to be fina field managers will have to complete to be adequately prepared for the transition. USPS’s 5-day delivery proposal involves both positive and negative effects. Key benefits would include improving USPS’s financial condition by reducing costs; reducing the size of its workforce; and increasing efficiency by better aligning delivery operations with reduced mail volumes. On the minus side, it would reduce service; put mail volumes and revenues at risk; eliminate jobs; decrease USPS advantages over competitors that do not have Saturday delivery; and, by itself, be insufficient to solve USPS’s financial challenges. Table 6 summarizes these and other key trade-offs. Moving to 5-day delivery would not, by itself, resolve USPS’s considerable financial challenges. We have reported that a variety of actions are needed for USPS to adapt more quickly to changes in the public’s use of mail and to achieve financial viability. USPS’s 5-day proposal should be considered in the context of other restructuring strategies both within and outside the delivery network. In April 2010, we discussed strategies and options across multiple operational and financial areas targeted at reducing operational costs and improving efficiency, including the following: Delivery operations—expand use of more cost-efficient delivery, such as cluster boxes. Retail operations—optimize the retail facility network, move more retail services to private stores and self-service locations, and close unneeded facilities. Mail processing operations—close unneeded facilities or relax delivery standards to facilitate closures or consolidations. We have also reported on other actions that could improve USPS’s overall financial condition, including the following revising retiree health benefits funding requirements, reducing compensation and benefit costs, and generating revenues through product and pricing flexibility. Mailer, business, and public use of the mail is changing as technology and alternatives evolve. Five-day service is one factor among many others, such as postage prices, the availability of electronic alternatives, competition, the cost-effectiveness of mail, quality of service, and ease of use that residential and business customers consider as they plan their current and future use of the mail. Through our survey of mailer groups and major postal labor unions and management associations, conducted in the summer of 2010, we found that they were divided over the merits of 5- day delivery, with the groups offering diverse perspectives on the potential effects on mail volume and members’ finances. Asked about USPS’s proposal for 5-day delivery, about half of those surveyed did not express an overall view, with some explaining that their members had differing views on the matter. Of those surveyed, 22 percent favored USPS’s proposal, including some who said it would lower USPS’s costs and thus help keep rates down. Some other proponents qualified their support, such as by stating they would favor 5-day delivery only as part of a package of changes to improve USPS’s financial condition. Twenty-eight percent opposed USPS’s proposal, often stating it would reduce mail volume and harm USPS’s business. Some mailer groups said the change would negatively affect customers and increase their costs, while others said they would prefer other options to improve USPS’s financial condition. Postal labor unions and management associations raised similar objections. One employee organization expressed concern that 5-day delivery would negatively affect vulnerable populations, such as rural residents, the homebound, the elderly, and small businesses that depend on the mail. Another employee organization expressed concerns that 5-day delivery would negatively affect Saturday retail service and efficiency, as well as reduce support for USPS and its monopoly on delivering mail to mailboxes. See appendix II for tabulations of the responses to our survey. The status quo is unsustainable as USPS is unable to finance its current operations and service levels. Action by Congress and USPS is urgently needed to comprehensively restructure USPS’s operations, networks, and workforce and to modernize its organization. We recently reported that Congress and USPS urgently need to reach agreement on a package of actions to restore USPS’s financial viability and enable it to begin making necessary changes. We also stated that Congress should consider any and all options available to reduce USPS’s costs, and that one option for Congress is to not include appropriations language requiring 6-day delivery. When fully implemented, 5-day delivery would provide USPS with needed cost savings, although the extent of those savings is uncertain. Additional uncertainties remain as factors other than delivery frequency— e.g., price increases—can also affect mail volumes and revenues. USPS’s role in providing universal postal services can affect all American households and businesses, so fundamental changes to universal postal services involve key public policy issues for Congress to decide. Some questions for Congress to consider include the following: What aspects of universal postal service, including frequency of mail delivery, are appropriate in light of fundamental changes in the use of mail? How much postal service does the nation need and what restructuring of USPS’s operations is needed for USPS to become more efficient, cover its costs, keep rates affordable, and meet changing customer needs? What incentives and oversight mechanisms are needed to ensure an appropriate balance between providing USPS with more flexibility and ensuring sufficient transparency, oversight, and accountability? Congressional decision-making actions on USPS’s 5-day delivery proposal will be informed not only by this report but also by PRC’s public proceedings and advisory opinion on the proposal. If Congress decides 5- day delivery is necessary, Congress and USPS could factor the savings from 5-day delivery into deliberations about what package of actions should be taken to restore USPS’s financial viability. Conversely, if Congress maintains the mandate for 6-day delivery, Congress and USPS would need to find other ways for USPS to achieve other substantial financial savings. This would entail difficult decisions with implications for USPS’s infrastructure, workforce, and service. USPS’s financial crisis is nearing a tipping point as USPS anticipates having insufficient cash at the end of fiscal year 2011 to meet all of its obligations, as well as reaching its $15 billion statutory debt limit. Addressing USPS’s financial viability is critical, since USPS plays a vital role in the U.S. economy and provides postal services to all communities. Because GAO previously recommended that Congress consider providing USPS with financial relief, and in doing so, consider all options available to reduce costs, this report contains no new recommendations. We provided a draft of this report to USPS for review and comment. USPS provided comments in a letter from the Vice President, Corporate Communications, dated March 18, 2011. These comments are presented in appendix III. USPS also provided technical comments, which we incorporated where appropriate. USPS generally agreed with our findings, but provided additional context for these findings. USPS said that the net cost savings from ending Saturday delivery would be significant given its operations and cost structure. USPS also stated that it agrees with the findings in our report that said there are always risks and uncertainties in modifying information systems. However, USPS noted that most of its information systems that need to be modified to support 5-day delivery have already passed rigorous testing and there is no appreciable risk or uncertainty relating to these systems. Finally, USPS commented that a change to 5-day delivery is needed because there is no longer sufficient volume to sustain 6-day delivery, and that moving to 5-day delivery is one of the fundamental business model changes needed to help it close the gap between revenues and costs. We are sending copies of this report to the appropriate congressional committees, the Postmaster General, the Chairman of the Postal Regulatory Commission, and other interested parties. In addition, the report will be available at no charge on GAO’s Web site at http://www.gao.gov. If you or your staffs have any questions about this report, please contact me at (202) 512-2834 or herrp@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IV. The objectives of our work were to assess (1) the U.S. Postal Service’s (USPS) cost and volume estimates and the operational impacts associated with its 5-day delivery proposal and (2) the trade-offs and other implications associated with this proposal. To assess these estimates and impacts, we reviewed documents and testimonies from a wide variety of postal stakeholders, including USPS, the Postal Regulatory Commission (PRC), mailers, unions, management associations, economists, and concerned citizens. Much of this information was submitted as part of PRC’s review of USPS’s proposal to move to 5-day delivery. We also reviewed USPS’s action plan entitled Ensuring a Viable Postal Service for America: An Action Plan for the Future; a 5-day delivery plan entitled Delivering the Future: A Balanced Approach, Five-Day Delivery Is Part of the Solution; operational-specific communication and implementation plans; and other financial and operational information contained in USPS’s annual reports, integrated financial plans, and comprehensive statements. We also reviewed reports from PRC, the USPS Office of Inspector General, the Congressional Research Service, the Congressional Budget Office, and the National Commission on Fiscal Responsibility and Reform; relevant congressional hearings and testimonies; laws requiring 6-day delivery; pending postal reform legislation; and our past work. We interviewed officials from USPS, including officials on its 5-day delivery task force, postal labor unions, and postal management associations. In conducting our analysis of the estimates and operational impacts of 5- day delivery, we also reviewed the assumptions and methodologies that USPS used as the foundation for its conclusions and estimates for cost reduction and mail-volume impact. We reviewed the multiple exchanges before PRC about issues or criticisms that stakeholders had raised about USPS’s assumptions, methodology, operational issues, and conclusions and USPS’s corresponding responses. In assessing the estimates themselves and these various exchanges, we considered the following criteria for conducting these types of reviews: the magnitude of criticism on the overall estimate; the internal consistency; consistency with social science best practices; the reasoning or support behind the methodology; and the presence of agreement and/or disagreement among stakeholders. After applying these criteria, we further analyzed two issues that may significantly affect USPS’s net financial savings estimate—(1) USPS’s assumption and judgment that most of the Saturday workload transferred to weekdays would be absorbed through more efficient city delivery operations and (2) USPS’s methodology for estimating the effect of its 5- day delivery proposal on mail volume, including reducing mailers’ estimates based on their responses to the question asking about the likelihood that their mail volumes would change if USPS implemented its proposal. We surveyed 65 selected stakeholders in the summer of 2010 about their views on USPS’s proposal for 5-day delivery, including implementation issues, concerns, and questions; their views on whether the implementation of USPS’s 5-day proposal would affect mail volume and mailers’ financial conditions; and their overall position on USPS’s 5-day proposal. Stakeholders we identified included all seven major postal labor unions and management associations and 58 mailing industry associations that either (1) formally participated in PRC’s proceeding on 5-day delivery or (2) were members of the Mailers Technical Advisory Committee (MTAC). MTAC is a venue for USPS to share technical information with mailers and to receive advice and recommendations from mailers on matters concerning mail-related products and services. MTAC members include mailer associations and other associations and organizations related to the mailing industry. MTAC organizations represent major segments of the mailing industry and members of MTAC organizations that generate most mail volume. However, MTAC organizations are not statistically representative of all organizations in the mailing industry and, therefore, our survey results cannot be generalized to the industry as a whole. We received responses from five major postal labor unions and management associations and 45 mailing industry associations, for a combined response rate of about 77 percent. Our work to assess the trade-offs and other implications associated with USPS’s 5-day delivery proposal was based on analyzing the evidence collected for this engagement and our past work on restructuring options and strategies for USPS. We conducted this performance audit from May 2010 to March 2011 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Tabulations of the 50 responses to our survey from five major postal labor unions and management associations and 45 mailing industry associations follow. Some questions in the survey were asked of all organizations; other questions applied only to mailer groups. Not sure Mailer Group Quetion: Do the memer of yor orgniztion expect USPS' proposal for 5-dy delivery to ffect the mil volme tht they or their customer end? Not sure Mailer Group Quetion: How wold USPS' proposal for 5-dy delivery ffect the finncil condition (i.e., co nd/or reven) of yor memer? No wer Mailer/USPS Employee Group Quetion: Doe yor orgniztion fvor, oppoe, or hve no poition on USPS' proposal to redce delivery to 5 d week? In addition to the individual named above, Teresa Anderson, Brittany Alfonso-Guerrero, Joshua Bartzen, Patrick Dudley, Heather Frevert, Brandon Haller, Kenneth John, Hannah Laufe, and Crystal Wesco made key contributions to this report. High-Risk Series: An Update. GAO-11-278. February 2011. U.S. Postal Service: Foreign Posts’ Strategies Could Inform U.S. Postal Service’s Efforts to Modernize. GAO-11-282. February 16, 2011. U.S. Postal Service: Legislation Needed to Address Key Challenges. GAO-11-244T. December 2, 2010. U.S. Postal Service: Action Needed to Facilitate Financial Viability. GAO-10-601T. April 22, 2010. U.S. Postal Service: Action Needed to Facilitate Financial Viability. GAO-10-624T. April 15, 2010. U.S. Postal Service: Strategies and Options to Facilitate Progress toward Financial Viability. GAO-10-455. April 12, 2010. U.S. Postal Service: Financial Crisis Demands Aggressive Action. GAO-10-538T. March 18, 2010. U.S. Postal Service: Financial Challenges Continue, with Relatively Limited Results from Recent Revenue-Generation Efforts. GAO-10-191T. November 5, 2009. U.S. Postal Service: Restructuring Urgently Needed to Achieve Financial Viability. GAO-09-958T. August 6, 2009. U.S. Postal Service: Broad Restructuring Needed to Address Deteriorating Finances. GAO-09-790T. July 30, 2009. High-Risk Series: Restructuring the U.S. Postal Service to Achieve Sustainable Financial Viability. GAO-09-937SP. July 28, 2009.

Summary: The U.S. Postal Service's (USPS) financial outlook has deteriorated as customers have shifted to electronic alternatives. Mail volumes have declined over 20 percent since fiscal year 2006 and are expected to continue declining. To help its financial outlook, in March 2010, USPS presented a detailed proposal to the Postal Regulatory Commission (PRC) to move from a 6-day to a 5-day delivery schedule. USPS projected this would save about $3 billion annually and reduce mail volume by less than l percent. This proposal factors in widespread changes to USPS's workforce and networks. USPS has also asked Congress to not include language in its annual appropriation requiring 6 day-a-week delivery. As requested, GAO assessed (1) USPS's cost and volume estimates and the operational impacts associated with its 5-day delivery proposal and (2) the trade-offs and other implications associated with this proposal. GAO reviewed USPS's proposal (including its assumptions, methodologies, and conclusions) and other information from the PRC's 5-day delivery proceeding, surveyed postal employee and mailer groups, and interviewed USPS officials and postal employee groups. Because GAO previously recommended that Congress consider providing financial relief to USPS, as well as other cost-saving options, this report contains no new recommendations. USPS generally agreed with GAO's findings and provided additional context on its proposed change to end Saturday delivery. USPS's proposal to move to 5-day delivery by ending Saturday delivery would likely result in substantial savings; however, the extent to which it would achieve these savings depends on how effectively this proposal is implemented. USPS's $3.1 billion net cost-savings estimate is primarily based on eliminating city- and rural-carrier work hours and costs through attrition, involuntary separations, or other strategies. USPS also estimated that 5-day delivery would result in minimal mail volume decline. However, stakeholders have raised a variety of concerns about USPS's estimates, including, (1) First, USPS's cost-savings estimate assumed that most of the Saturday workload transferred to weekdays would be absorbed through more efficient delivery operations. If certain city-carrier workload would not be absorbed, USPS estimated that up to $500 million in annual savings would not be realized. (2) Second, USPS may have understated the size of the potential mail volume loss due to questions about the methodology USPS used to develop its estimates of how 5-day delivery may affect mail volumes. The extent to which USPS can achieve cost savings and mitigate volume and revenue loss depends on how well and how quickly it can realign its operations, workforce, and networks; maintain service quality; and communicate with stakeholders. USPS has spent considerable time and resources developing plans to facilitate this transition. Nevertheless, risks and uncertainties remain, such as how quickly it can realign its workforce through attrition; how effectively it can modify certain finance systems that cannot be changed until congressional approval for 5-day delivery is granted; and how mailers will respond to this change in service. Further, uncertainties remain as factors other than delivery frequency--e.g., price increases--can also affect mail volumes and revenues. USPS's proposal involves several factors that need to be considered. It would improve USPS's financial condition by reducing costs, increasing efficiency, and better aligning its delivery operations with reduced mail volumes. However, it would also reduce service; put mail volumes and revenues at risk; eliminate jobs; and, by itself, be insufficient to solve USPS's financial challenges. USPS's role in providing universal postal services can affect all American households and businesses, so fundamental changes involve key public policy decisions for Congress. If Congress decides 5-day delivery is necessary, then Congress and USPS could factor the savings into deliberations about what package of actions should be taken to restore USPS's financial viability. Conversely, if Congress maintains the mandate for 6-day delivery, Congress and USPS would need to find other ways to achieve equivalent financial savings, so that the package is sufficient to restore USPS's financial viability. This would likely entail difficult decisions with broad implications for USPS's infrastructure, workforce, and service. As GAO has reported, a package of actions by Congress and USPS is urgently needed to modernize USPS's operations, networks, and workforce.