Sourcewww.wsj.com
The U.S. Postal Service is again barreling toward insolvency, and on Friday it reported a $2 billion quarterly loss. “We are in a cash crisis,” Postmaster General David Steiner said. “We require urgent Congressional action to expand our borrowing authority and to address outdated constraints on the organization.” The important part for lawmakers to hear is that last part.
The USPS has been raising prices and trimming costs, but it keeps falling short in trying to make ends meet. The reality is that its business model is an anachronism in a digital world, yet Congress has refused to recognize that. As paper correspondence—letters, bills, party invites—shifted online, total mail volume fell off a cliff. Last year the USPS handled 108.7 billion pieces, down 49% from a peak of 213.1 billion in 2006. A majority of what’s left is euphemistically categorized as “marketing mail.”
At the same time, the total number of “delivery points” keeps going up. The USPS is under a mandate to reach every address in America, six days a week, a task that gets more expensive as the country’s population grows and new subdivisions are built. Last year there were 170.5 million delivery points, up from 146.2 million in 2006, or an increase of 16.6%.
Sourcewww.wsj.com
Congress gave the USPS pretty much everything they wanted the last go round, including forgiving over one hundred billion dollars they were on the hook for. Part of this was prefunding for future retirees that the USPS hadn’t paid for years. Why on earth would congress allow them to borrow more; they’re not gyro pay it back. Yes, volume is down, but the USPS keeps adding more and more managers whose jobs have little or nothing to do with mail processing or delivery. Many routes go undelivered, yet they continue to hire managers. Steiner won’t even discuss trimming the fat and acts as if cutting a day of delivery would be the end of the world. Cutting Saturday delivery and trimming management by 30% would go a long way in righting this ship.