The U.S. Postal Service has floated the idea of service cutbacks before, but this time, it appears the organization is serious.

Postmaster General and USPS CEO John Potter is set to tell a Senate subcommittee on Thursday that the Post Office is in a financially unsustainable position, and needs to stop Saturday delivery, among other cuts. FOX Business obtained Potter’s prepared testimony.

The testimony will come a day after the Postal Service said it lost $2.4 billion in its third quarter ended June 30, marking the operation's 11th net loss in the last 12 quarters.

“Operating under the current legislative requirements, we project annual net losses of in the range of $5.4 billion to $8 billion for at least the next five years, with cumulative annual cash shortfalls growing exponentially,” Potter’s testimony says.

Potter said service would be cut on Saturdays, but that “a change to five-day delivery will not affect retail operations.  Post offices with Saturday hours will remain open on Saturdays … this adjustment would have absolutely no effect on Post Office Box Service.”

He added, “Express Mail, our premium service, which has always offered delivery on Sunday and holidays, will continue to be delivered on Saturday as well.  There will be no regular Saturday delivery or collection of mail to addresses swerved on any city, rural, and contract delivery routes.”

Potter’s testimony suggests that postal employees might need a bit of help to get all their benefits.

“We will simply not have the means to meet all of our required obligations as we close the fiscal year.  This will have the direct effect on our ability to meet the scheduled payment of $5.4 billion to the Postal Service Retiree Health Benefit Fund, which is required on September 30,” he says in the testimony. 

Private shipping companies FedEx (FDX) and United Parcel Service (UPS) were down slightly on Wednesday along with the broader market.

The U.S. Postal Service, By the Numbers

• The average compensation (salary and benefits) from FY 2008 audited financial reports is $66,929 per worker.
• As of Tuesday, there are 630,672 career employees. USPS is third in the U.S., after Wal-Mart and the Department of Defense.
• Personal letters make up 5.8% of USPS volume

USPS Postmaster General/CEO John Potter Testimony