Anyone who has sent an e-mail or paid a bill online knows how convenient and time-saving that can be. Your aunt might still prefer a handwritten letter or a real birthday card, but aside from that, skipping stamps , sms and envelopes is one of the great benefits of the Internet.
This convenience, though, is one of the many reasons why mail volume has fallen off a cliff, pushing up stamp prices and now prompting a Postal Service proposal to drop one delivery day — a painful but necessary start on fixing the post office’s money crunch.
At the heart of the postal predicament is that less mail means less revenue, but mail carriers still have to go to every household six days a week, to the end of remote roads in northern Alaska or to the bottom of the Grand Canyon (by mule, as it turns out). That’s labor intensive and increasingly expensive.
Carriers are delivering less mail to more addresses. Some of last year’s 13% plunge in volume was recession-driven and should come back, but a lot of it is lost forever to the Internet and private deliverers, such as Federal Express. That makes the trend ominous. The service lost $3.8 billion in 2009.
Years ago, Congress made it a self-sufficient agency and barred taxpayer bailouts. The service has survived by cutting expenses and workers, and taking on debt. It’s on track to reach $14 billion in debt by the end of this year, just short of its $15 billion limit.
Something has to give. Last week, Postmaster General John Potter laid out a plan that would do what he says the Postal Service can do legally to cut expenses: shed more jobs through attrition; reduce work hours; consolidate mail-sorting facilities; push new services such as the flat-rate box for package delivery, and so on.
But those steps would reduce the Postal Service’s 10-year projected deficit by only about half, to an unaffordable $115 billion. To close the rest of the gap, Potter is suggesting an array of unpopular moves, such as ending Saturday mail delivery, shutting some money-losing post offices (only about 6,000 of 32,000 operate in the black), raising stamp prices more aggressively or changing the way retiree health benefits are funded.
These changes would need approval from Congress, the Postal Regulatory Commission or both. And all of these, or something like them, make sense, if they’re the price of saving universal mail delivery, which has helped bind the nation together since the service was founded in 1775.
So, too, does taking a close look at trimming future retiree benefits, which — typical of government — are far more generous than in the private sector.
Some free-market advocates say the answer is to privatize the Postal Service, but it’s unimaginable that any for-profit business would want the job of visiting every address in the USA five or six days a week, for as little as 44 cents, the price of a first-class stamp. Private operators might want to skim off the most profitable urban routes, but not if they also had to go to the end of that road in Alaska. Nor, frankly, would a company want to take over a money-losing, debt-burdened operation like the Postal Service. Yet continuing to pile up unpayable debt is unacceptable.
The answer is a painful retrenchment to make the operation more efficient and better able to cope with the inevitable loss of business. Despite inroads by competitors, last year the Postal Service moved more than 177 billion pieces — cards, letters, bills, magazines, packages and, of course, junk mail — with remarkable efficiency.
Some of this is frivolous, some of it vital, but the capacity to send an envelope or a package anywhere in the country for a reasonable fee is well worth preserving.
