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Postal Service sees holiday packages up 20 percent

The entrance of a United States Post Office is seen in Manhasset, New York August 1, 2012. REUTERS/Shannon Stapleton
The entrance of a United States Post Office is seen in Manhasset, New York August 1, 2012. REUTERS/Shannon Stapleton

By Emily Stephenson

(Reuters) - The Postal Service expects package deliveries during the holiday season to jump 20 percent from last year, as Americans do more shopping online.

The Postal Service said it forecast delivering 365 million packages, a 20 percent increase over 2011.

The bump could temporarily help the USPS make up for tumbling mail volumes that have contributed to billion-dollar losses in recent years as Americans increasingly communicate online.

The Postal Service expects Monday, December 17 to be the busiest mailing day for cards and packages during the holidays. The agency expects more than 655 million pieces of mail will be sent that day, compared with 538 million on a normal day.

In total, the agency said it expects to deliver about 18 billion cards, letters and packages between Thanksgiving and New Year's Eve.

Major private-sector U.S. shippers also say online shopping will drive increases in holiday package volumes this year, but they have been less bullish than the Postal Service.

United Parcel Service Inc forecast a 10 percent increase over 2011, and FedEx Corp expects a 13 percent boost over last year.

Despite the Postal Service's optimism about the next two months, Postmaster General Patrick Donahoe said Congress still needs to green-light a number of cost-cutting measures to staunch the losses.

The Postal Service, which relies on the sale of stamps and other products instead of taxpayer funding, has defaulted twice in recent months on required payments for future retiree benefits. The agency hit its $15 billion borrowing limit earlier this year.

USPS officials want to move to five-day mail delivery, stop making the payments for future benefits, and create a USPS health plan rather than placing employees in federal government health plans.

The changes would require permission from Congress. Lawmakers have not been able to agree on legislation to overhaul the Postal Service's business model.

Some members of Congress want to take up postal legislation during the post-election "lame duck" session. But taxes and government spending issues could require their full attention.

Donahoe told reporters on Thursday that postal officials have been communicating with congressional staff but that he had not seen signs that Congress would finish postal legislation during the lame duck session.

"Congress knows that they have to deal with it," Donahoe said. "I think that they will take some positive steps. No guarantees, but we're hopeful."

(Reporting by Emily Stephenson; Editing by Jeffrey Benkoe)

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