What shape is the Postal Service in? It’s hurting, reports The Week.
With more and more personal and business communication being conducted via e-mail and social-networking sites, mail volume peaked at 213 billion pieces in 2006 and has been declining ever since.
The recession has only made a difficult situation worse. Mail volume declined by 25.6 billion pieces this year, or almost 13 percent–more than double any decline in the history of an institution founded before the American Revolution and first led by Benjamin Franklin.
Volume is projected to fall by another 11 billion pieces next year. “Simply put,” says Postmaster General John Potter, “the Postal Service is in acute financial crisis.”
Losses this year alone totaled $3.8 billion, and by the end of next year, total agency debt is expected to reach $13 billion. The Postal Service’s fiscal straits would be even more dire if not for a 2 cent hike on the first-class stamp this year and $6 billion in cost reductions.
The quasi-governmental agency has cut 260 million work hours in the past decade and even eliminated 200,000 of its iconic blue mailboxes. But with $80 billion in annual expenses, cuts haven’t kept pace with the decline in revenue. “The business model, quite frankly, is broken,” says USPS Chief Financial Officer Joseph Corbett.
Photo by hopkins.