Mail Supremacy No More

What would you rather lose: Web access or delivered mail? For most of American history, the U.S. Postal Service has been the lifeblood of our nation. Think of how many movies you have seen where getting a letter in the mail produces shrieks of joy or tears from the depths of profound human sadness. Cinematic dogs nipping at mail carriers – images from Norman Rockwell paintings – little pushcarts filled with mail, college applicants clutching letters filled with hope, presents during the holiday season. Our idiomatic lexicon is filled with allusions to this esteemed institution: from “going postal” to “the check is in the mail.” Sad fact is, the Postal Service is going broke.

“If it fits, it ships” is one of the many advertising efforts of the U.S. Postal service to compete with the FedEx’s, UPS’s and DHL’s of the world… or even those ratty New York messengers on bicycles. While the USPS is a separate corporation (a public corporation, if you will), unlike its competitors, its rates are subject to approval by postal regulators and it has legal obligations to fulfill requiring the delivery of third class mail, old world spam. Simply put, the USPS is saddled with legacy retirement programs (many of the carriers in the private sector are “independent contractors” who have to provide their own benefits), required to deliver even economically unjustified mail service and is forced to run routes to isolated rural mailboxes to deliver even unwanted flyers. But how would you feel if you lived in rural Nebraska and were told that you would be getting mail once every week or two?

The problem isn’t a minor couple of million dollars of deficit; the USPS is hemorrhaging billions of dollars of annual losses, all this at a time when the nation as a whole is facing record deficits in economically perilous times. They are trying to raise their rates against business pressures to the contrary – looking for a relatively modest 5.6% hike, but at a time when most consumer prices are either stable or falling. The business community thinks the USPS should instead slash and burn its workforce and streamline its operational costs. It’s already cut $10 billion from its operating budget since 2008, but that hasn’t solved the continued imbalance between revenues and costs. On September 30^th, the regulators denied the increase, relegating the USPS to inflationary numbers, meaning the Service is facing some pretty tough decisions.

Pressure is also mounting to address what many feel are unsustainable pension obligations. The September 30^th Washington Post: “GOP opposition kept Congress from permitting the Postal Service to postpone paying $5.5 billion required by law to pre-fund retiree health benefits. A temporary spending measure to fund most federal programs through early December didn't mention the Postal Service… ‘The Postal Service does not want to make the tough decisions, which include cuts in personnel, pay and benefits. Instead, they are relying on a generous taxpayer bailout that will not solve any of their mid- or long-term problems,’ said Rep. Darrell Issa (R-Calif.), who opposes the rate increase and congressional relief.”

The Postal Service is this nation’s second largest employer (in this very labor-intensive operation), but it is facing a deficit this year of at least $4 billion, and sometime this or next month, the USPS will run out of cash. In the private sector, the Postal Service would be forced to declare bankruptcy. Congress is unlikely to let the USPS go out of business, but they will undoubtedly put pressure Postmaster General John Potter to make more tough cuts in personnel and service. We can expect a litany of solutions, but we will expect less from this esteemed institution and will not be disappointed. “Neither snow, nor rain, nor heat, nor gloom of night stays these courageous couriers from the swift completion of their appointed rounds,” words uttered millennia ago by Greek philosopher-historian Herodotus, is the motto of our postal workers. I guess it didn’t cover technological change, marketplace competition or economic maelstroms.

I’m Peter Dekom, getting used to less… much less… is becoming an American pastime.