Friday, February 24, 2012

Saving the post office in an internet age

I really like George and his colleagues at my local post office. They’re helpful and friendly, and seem to know the local residents. They're an important part of the local neighborhood scene. A lot of people feel that way about their local post offices. But from a business perspective, and given economic realities, it is probably true that across the country there are many communities that have more post offices than the USPS really needs. More post offices, and more postal workers. Not in my neighborhood, of course.

There are so many post offices (38,000), Congressman Stephen Lynch told the New England Council yesterday, that we’ll run out of names for them before we run out of post offices. A Pew Research study found the public is generally satisfied with postal services (compared to its view of Congress, which, according to Lynch, is “somewhere between the Taliban and swine flu!”) However, he said, the reality is that many communities with five or six branches could get by with two to three.

Here’s the problem. Since 2008, there are 42 billion fewer pieces of mail sent through the U.S. Postal Service, mostly first class mail. The USPS keeps running up operating deficits and needs to reduce costs some $20 billion by 2015. The USPS depends for its revenues on the sale of stamps, products and services. Because of the rise of the Internet, past volume won’t come back, even when the economy rebounds.

Nowadays, we’re apt to use email than send a letter, and, instead of mailing our bill payments, we tend to use online banking. That’s a direct hit on postal service revenue. So USPS keeps raising the price of stamps, but it is clearly a losing battle.

Technology will only intensify the shrinking of the revenue base. Denmark is testing a Pitney-Bowes system for allowing customers to go online, see what mail awaits them in their local delivery hub, and check off what they want to have actually delivered. Goodbye unwanted catalogues and junk mail!

Among possible solutions to the deficit are eliminating Saturday deliveries, closing facilities, and eliminating workers. Yesterday, it was announced that the main postal annex in South Boston has just been spared, at least for now. [Note: this is a mixed blessing. There’s no telephone number to contact anyone to track mail, and packages can sit there for days before being moved to the local office.] Branches will be closed in Wareham, Waltham and Shrewsbury, North Reading and Lowell, eliminating some thousand jobs. Brockton may also be affected. “Going postal” today may mean going the way of the dodo bird.

Seventeen members of Congressman Lynch’s family are either working for or have worked for the Postal Service, so he’s been thinking about the human dimension of this for some time. Lynch notes that, while the postal service itself is drowning in red ink, the postal workers’ retirement fund actually has a surplus of about $7.5 billion. He wants to allocate about $1.5 billion for early retirement incentives for some 100,000 postal workers.

Lynch says the Tea Party probably opposes the idea because the proposal doesn’t cause enough pain and “leave enough blood on the floor.” As a journalist, I should be suspicious of any bill put forth by a politician with family ties to the particular agency. But, try as I might, I can’t find any reason why this retirement fund proposal doesn’t make sense. Care must be taken though that the money be used for workforce reduction, rather than to subsidize jobs that no longer are needed.

I’d greatly appreciate your thoughts in the comments section below.


  1. Wouldn't the most sensible thing to do be to set a strategy and timeline to eliminate the USPS and take that function completely private? What's interesting about this issue is that the right (Chamber of Commerce and business interests) and left (unions, fans of huge govt, etc) come together in support of this business subsidy dinosaur.

  2. If you take it completely private, what happens to delivery of mail to the nation's most remote areas, which will never turn a profit?