Big losses mandate change
The new postal service won't be like the old postal service.
The continuing financial problems that plague the U.S. Postal Service are laying the groundwork for dramatic changes in the frequency and manner of mail delivery.
It was just a few months ago that the postal service announced that it would like to do away with Saturday deliveries. Congressional opposition blocked that proposal, at least for the time being, but the handwriting is on the wall.
Recent financial figures illustrate the problem. The postal service, an independent agency, lost $740 million for a three-month period that ended on June 30. Here's what's shocking — that represented a reduction in previous losses.
The postal service lost $3.9 billion during the first six months of 2013. Last year, the postal service lost $16 billion.
It's that kind of mind-boggling financial failure that has postal managers contemplating unheard-of service changes in the coming years, including terminating door-to-door delivery and replacing it with cluster box and curbside delivery.
The postal service is also seeking new revenue-generating opportunities, the most prominent of which is the ability to ship beer, wine and spirits. That will require congressional permission but, if adopted, postal officials estimate they could generate an additional $50 million a year by competing with private delivery businesses.
Postal officials, however, said that they cannot avoid disaster without new legislative authority from Congress. Traditionally, Congress has caused more problems for the post office than anything else, mostly blocking service cuts that drive up costs. Members of the U.S. House and Senate have so far not been able to embrace a single plan. But they eventually will because they have no choice.
What people will see over the coming decade is a titanic shift in how the postal service operates, the principal result of which is that it will be doing less than it does now. Services people take for granted will disappear.
The postal service quandary is represented by the economic axiom that if something can't last forever, it won't. The postal service cannot keep generating these devastating financial losses; getting costs under control is an unavoidable necessity, and it won't be pretty.