Saturday, July 25, 2009

Markets in Everything: NOT. U.S. Postal Service: Largest Drop in Mail Volume in 234 Years

WASHINGTON POST -- Combine the impact of new technologies with the gut punch of the recession, and in the past year alone, the Postal Service has seen the single largest drop-off in mail volume in its 234-year history, greater even than the decline from 1929 to 1933 during the Great Depression. That downward trend is only accelerating. The Postal Service projects a decline of about 10 billion pieces of mail in each of the next two years, going from a high of 213 billion pieces of mail in 2006 to 170 billion projected for 2010 (see chart above, click to enlarge).

The situation is so dire that the Postal Service, which is projecting a $6 billion shortfall by the end of September despite a recent postage rate increase, will go to Congress this month to seek emergency relief, looking to cut home mail delivery from six days a week to five. Already, the Postal Service has cut hours at hundreds of post offices across the country, including 56 of the Washington area's 386 outlets. It has consolidated routes, dropping 158 delivery routes locally, offered workers early retirement and imposed hiring and salary freezes. Still, said Postmaster General John E. Potter, the service is in "acute financial crisis."


At 7/25/2009 5:30 PM, Blogger KO said...

I don't see any problem with dropping 1 day of delivery service. Urgent mail is less likely to come regular mail these days.

I think the plan wasn't to drop Saturday, but actually Tuesday or Wednesday which have the lowest volume of delivered mail. So there wouldn't be a 2 day gap, but two 1 day gaps.

It might be a weird work week, but probably not harder to deal with than getting 6 days of work from people on 5 day work weeks.

At 7/25/2009 6:31 PM, Anonymous Anonymous said...

Why not go to delivering mail 3 days a week? Have one carrier work two routes on alternating days. USPS could cut half the delivery force.

At 7/25/2009 6:43 PM, Anonymous Anonymous said...

Sell the postal service.

At 7/25/2009 8:56 PM, Anonymous Anonymous said...

I thought the same thing as Anonymous at7/25/2009 6:31 PM.

I think though that doing that will result in even less mail going through the USPS due to longer delivery.

It is only a matter of time when the USPS will be a memory.

At 7/26/2009 12:20 AM, Blogger KO said...

The mail is one of the few things I think the government should do. You already see selective censorship of tv ads that the stations disagree with. The most recent example being the refusal to run a Republican commercial during the hour long town hall meeting at the White House about healthcare.

Give a private company the mail and they can just refuse to accept political advertising, anything they deem offensive, etc.

They would also cut delivery to many outlying areas that are very expensive to deliver to, or charge appropriate prices. I do not want to have to check the prices for every zip code combo for a letter. Or pay Fedex type rates to mail a birthday card to grandma.

At 7/26/2009 5:36 AM, Anonymous geoih said...

Quote from OA: "I don't see any problem with dropping 1 day of delivery service."

I'm thinking that's not the same thing that FedEx or UPS would do when faced with decreasing volume. There's no logic in 'business is down, I better stay closed more often'.

Quote from OA: "Give a private company the mail and ..."

There is no "giving" needed. This is a false choice. You simply remove the government enforced monopoly and let whoever wants to deliver mail. If one company censors or gives bad service, then you go to a different company.

At 7/26/2009 10:34 AM, Anonymous gettingrational said...

UPS and FedEx don't make regular stops at every mail box in the U.S.
This service is needed but to deliver six days a week is a cumbersome luxury.

Subsidizing junk mail makes no economic sense unless you are a junk mail producer whose spam is blocked on the internet.

Package delivery is the place I diverge with Post Office backers.
UPS and FedEx do a better job in this area and the Post Office could save billions and concentrate on their niche small packets and envelopes market.

At 7/26/2009 2:47 PM, Anonymous Anonymous said...

The US Postal service is one of the few organizations that can spend billions on technology and manage to reduce both costs and price not a single penny.

They're doing everything but what they need to do: big staff layoffs. Don't forget that all these reduced-time workers are still accruing full credit towards their bloated government pensions. They're also getting full medical benefits.

At 7/27/2009 6:42 AM, Blogger juandos said...

Hmmm, what about the Constitution, specifically Art. 1, Sec. 8 - To establish Post Offices and post Roads?

Wouldn't there need to be an amendment process first?

At 7/27/2009 7:36 AM, Anonymous Anonymous said...


Article 1, Section 8 means that We, the People have merely permitted Congress to do this; they don't have to actually do it.

At 7/27/2009 8:46 AM, Blogger Dessert Survivor said...

I have always thought it strange that in most places the Post Office charges for a box in the post office where it is cheap and easy to deliver mail, but delivers it to your home free. Wouldn't it make sense to do it the other way, charge for delivery and give the PO box free?

At 7/27/2009 9:31 AM, Anonymous Rand said...

Note to Dessert Survivor:

That's an interesting proposal, but it would require building larger post offices which could then be named after pork minded politicians.

At 7/27/2009 3:15 PM, Blogger juandos said...

"Article 1, Section 8 means that We, the People have merely permitted Congress to do this; they don't have to actually do it"...

Hmmm, interesting comment anon and one I don't disagree with...

In today Washington D.C. do think the K.I.S.S. theory can be applied?

At 7/30/2009 9:38 PM, Anonymous Anonymous said...

A quick estimate: We went from about 4 credit card offers/week to about 1. If we are typical...3 less pieces of mail x 52 weeks x 100 million households is about 15billion pieces of mail per year. Now, take a look at the top plot again.


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