The Postal Service’s problems may continue to worsen even after the recession ends. Both consumer and business customers are using traditional mail less and less in favor of e-mail and other means of communication. Mail volume last year fell by 9.5 billion pieces to 203 billion pieces and it is expected to fall to 175 billion pieces this year.
The Postal Service anticipates mail volume will continue to remain flat or decline further over the next five years.The USPS is expected to post a $7 billion loss this year. It has outstanding debt of $10 billion and may have a cash shortfall this year of $1 billion.
In order to meet payroll and other expenses this year, the USPS hopes to delay payments to its retiree health care fund. It is also closing post office locations, cutting jobs and freezing salaries. It may also reduce mail delivery from six days a week to five.The GAO report says the Postal Service isn’t undertaking cost-cutting fast enough. It also suggests it explore opportunities to generate new forms of revenue.
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