The cash-strapped mail agency will still deliver packages, said the source, who is familiar with the matter but not authorized to speak on the record.
USPS spokesman Mark Saunders could not confirm the change, but said the agency would issue a news release on Wednesday.
The move is part of the mail carrier's larger effort to aggressively to cut costs amid rising use of email and the Internet as well as looming payments for future retiree's health benefits. USPS lost almost $16 billion last year.
The 237-year-old institution has already run into its legal borrowing limit and defaulted twice on required payments to the federal government.
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