"Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds." This a famous quote chiseled in stone on the main entrance of New York Post office. In the current time, the job of carrying mail is no longer as lofty as the quote. United States Postal Service is plagued with multiple problems including fall in revenues and dysfunctional post offices. There are 31,272 post offices in the country with more than 8 million employees. Clerks, mail carriers, truck delivery personnel form the core of the postal service. USPS is a federal run organization with mail delivery, parcel service and bulk mailings. Established in 1775 USPS had been one of the best mail delivery services of the world. The dawn of internet, email and other delivery services USPS has suffered losses during early twenty first century. It surged again in 2006-07 riding high on first class mail and its mail volumes were 213 billion. In 2009, the mail volume fell to 177 billion with greater number of places to deliver and fewer employees (United States Postal Service Annual report, 2009). This paper tries to understand the implications of such changes and urgent the need for restructuring USPS.
Three contentious issues need to be addressed here- the sources of revenue, expenditure, and loss causatives. Revenue for USPS comes by the sale of postage stamps and stationary, parcel service, greeting card and direct mailings. Direct mailings contribute to 52% of mail volume, which is a large number (McDevitt, Caitlin, 2008). Direct mailing is considered ‘junk mail’ by consumer as these constitute of credit card offers, promotional coupons or sale deals. Most credit card companies, utility providers, banks are ‘going green’ by asking consumers to switch to paperless statements. When the bulk of the mailings reduce, it means lesser work for the postal service and less revenue. One cannot justify the environmental friendly move of less mail because it puts the USPS employees at stake.
Other loss causatives are reducing first-class mail volumes, dysfunctional post offices and contracting the last mile delivery. First- class mail had been the most profitable venture with the USPS and is displaced by e-bills, online payments, and purchases. Secondly, some post offices are so remotely located that their operation seems unnecessary. Thirdly, the contracts with private operators to deliver the ‘last mile’ are draining the revenues. Conversely, delivery restriction to six days per week indirectly supports its competitors who would go to any length to capture consumer base.
There had been a frequent debate on restructuring the postal service. In an interview to PBS News Hour the U.S. postmaster general, Patrick Donahoe stated that there are two measures that need immediate attention (PBS Newshour, 2011). One is to resolve the retiree health benefit funds that is prepaid. It needs government approval to modify and prevent draining their own resources. Secondly, there is surplus of money with retiree fund under the government control. The government has to let postal service use its own funds. Other concern of the Post Master General is to close down the non-functioning post offices and move them to convenience stores and gas stations. In other European countries, postal services either are privatized or have digitized their entire services to the core. They have also moved their post offices to convenience stores and gas stations cutting the operating costs.
Several measures were taken to counter the deepening fiscal crisis. Downsizing the number of employees, closing post offices and reducing service hours or days of delivery are some of the ways adopted. Reducing number of employees does not prove to be a good measure because the delivery points have increased and shortage of staff would hinder the delivery process. Some of these measures may be counter –productive because there is a fear of losing consumers. One cannot afford to lose the mass appeal of the service. Universal equitability has been the catchword for USPS. Cheaper rates and reliability of service have been the trademarks and it should rely on its assets. Statement before the U.S. Senate Committee on Homeland Security and Government Affairs On “Solutions to the Crisis Facing the U.S. Postal Service” (R. Richard Geddes ,2013) suggests that de-monopolization and commercialization as solutions to the problems. Government monopoly has to restructure so that services may have competitive rates. Commercialization of the service would help healthy competition and betterment of the service.
Stone, Daniel (Newsweek, 2009) says that the service needs to run like a private business. He suggests that services increase, coupons used to attract consumers, and government broadband channelized through the Postal service. E-business should be promoted too.
In the face of shut down USPS struggles with day-to-day functioning due to financial losses. Government has to consider the magnitude of the problem and assist the organization maintain its strength and popularity. It had shot down postal rates increase several times in the past. This could have helped tide the crisis. The bureaucratic struggle faced by USPS has reached a stage where reform is long due. It is time to think whether we need the postal service to be a slow moving monolith operated by government monopoly or make it fast paced, competitive, edgy business which encourages competition. One cannot simply close the service completely. That would mean massive loss of jobs, tradition and heritage. There are advantages in being the second largest employer in USA and USPS should be able to tide the crisis by modernizing and adopt to current needs.
Resources
“The Challenge to Deliver: Creating the 21st century Postal Service: United States Postal Service Annual report.” United States Postal Service. United States Postal Service, 2009. Web. 2009. 24 Sept 2010.
McDevitt, Caitlin. “To Postal Workers No Mail is ‘Junk: With Revenues falling’, the Post Office owes its future to stuff we throw out.” Newsweek. Newsweek. 27 Sept 2008. Web. 28 Sept 2010.
United States Postal Service. “Postage Rates and Historical Statistics.” United States Postal Service. United States Postal Service, 2012. Web. Dec 2, 2013.
Leonard, David. : The US Postal Service Nears Collapse.” BloombergBusinessWeek Magazine. Cover Story. BloombergBusinessWeek Magazine . May 26, 2011. Web. Dec 2, 2013. Available at: http://www.businessweek.com/magazine/content/11_23/b4231060885070.htm#p4
PBS Newshour. “How Should U.S. Postal Service's Financial Problems Be Fixed?” Debate. Interview with Postmaster General Patrick Donahoe and Fredric Rolando, president of the National Association of Letter Carriers. Aired Sept 6, 2011. Web. Dec 3, 2013. Available at: http://www.pbs.org/newshour/bb/government_programs/july-dec11/postoffices_09-06.html
R. Richard Geddes. “Solutions to the Crisis Facing the U.S.Postal Service.” Cornell Program in Infrastructure Policy, Cornell University. February 13, 2013. Web. 2 Dec 2013. Available at: http://www.aei.org/files/2013/02/12/-geddes-senate-usps-testimony-final_142017292819.pdf.
Stone, Daniel. “Flying like an Eagle?” Newsweek. Newsweek. 5 Oct 2009. Web. 24 Sept 2010
