Friday, July 31, 2009

The Death of the Postal Service?

It might be all bad for post offices in the future. The internet, and more specifically email have severely damaged the age old method of communication. Honestly though, how many of us have mailed a letter out of our own volition in the past six months, without the prodding of a parent? Post offices need to switch it up fast before they become extinct, like Dinosaurs and Cybikos.

(Business Journal) “New technology is profoundly affecting services in both the private and public sectors, including traditional mail delivery,” said acting comptroller general and head of GAO Gene Dodaro in a statement. “Compounded by the current recession, the volume of mail being sent is dropping substantially, leading to a sizable decline in revenue,” he said. GAO recommends the Postal Service work with Congress and other stakeholders to develop a more sustainable restructuring plan.

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.

Full Article Here


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