The head of the US Postal Service (USPS) warned Congress last week that the government-run company was running out of cash. Postmaster General David Steiner said the USPS was facing a “severe financial crisis” and could not solve the problem on its own because of restrictions imposed by Congress.
The USPS has lost money every year since 2007 as mail volumes have plunged and the company’s productivity has declined. Its future is bleak unless Congress enacts major restructuring. The table shows factors causing the company’s decline.
Postmaster Steiner floated numerous reform options. One option is to close retail locations because “roughly 60 percent of post offices lose money.” We should close small, rural post offices that receive few customers, as well as thousands of urban and suburban post offices that are close to other locations.
Another option is to reduce delivery frequency. Steiner said that reducing service from six days a week to five would save $2.9 billion or more a year. But I think Congress should cut delivery to three days a week to save $9 billion or more a year. Remember that most of today’s USPS volume is junk mail.
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