Ok, so the USPS is failing with a deficit of about 7 billion dollars according to the Times. That’s on a total budget of around 70-80 billion (estimating based on a Heritage.org article with data from 2002). It could be way more but the data isn’t easy to track down/root out.
That being said, the recession is kicking the Post Office’s ass, and it has been beaten to a pulp over the last decades with the advent and ubiquitous use of email as an alternative to sending letters. So less stamps are being sold, but the routes and delivery methods and post office numbers remain the same.
In an effort to alleviate their troubles the Post Office was asked to suggest some reforms to their programs in order to save money. The results were: close branches and cut back on Saturday delivery/pickup of mail. And even though that would not even meet the 7 billion, it was flatly denied by the congressional leader overseeing the reforms because it “affected his constituents” (this is paraphrased by the Morning Edition report on NPR which included an update on the USPS situation).
So the problem is declining revenue (already projected deficit), lots of liabilities (payroll and benefits) and even with the cuts proposed,
It takes a lot of people, equipment and trucks to move 20 billion pieces. If the mail volume doesn’t recover, and the trends don’t look promising for that to happen, there’ll be a lot of excess capacity at the postal service. (NPR)
The Times continues,
“We have too many people, too many buildings, less revenue and less mail,” said Darleen Reid-DeMeo, a Postal Service spokeswoman for New York City. “We’ve got to become more efficient.”
The problem, as I see it, is that no one is really looking at the problem with a fresh outlook. If we view the USPS in terms of current economics, most entrepreneurs would see the issue right away: their freemium model is backwards. Literally, as in they are giving away and charging for the wrong services.
Sure they needed to offer free mail delivery a long time ago in order to create their market, who doesn’t try to give something away these days? But nowadays there’s no way to justify ANY free delivery on ANY day. They want to cut Saturday. I say cut free mail delivery and pickup every day unless the end user opts to pay a monthly subscription fee for the service.
And instead of charging for PO Boxes, offer them for free. This way people are attracted to the Post Office as a destination and can still receive mail at no cost (besides stamps). My suggestion would have several effects:
- drastically decrease the number of staff needed for mail delivery
- cut transportation costs (gas, fleet upkeep)
- create a new revenue stream from those that opt to receive home delivery and pickup
- prepare the USPS for continued reduction in pieces of mail
Now, any congressperson would say that their constituents would balk at this. Obviously, the USPS affects all districts, states, residents and therefore every constituent and interest. Mail is a serious business even if no one is bothering with it anymore.
This isn’t my last post on the USPS situation. It really grinds my gears that they aren’t taking a more serious look at totally revamping the system. GRRR!!!