At what point does the U.S. Postal Service become obsolete?
A renewed push to cut a day from the six-day-a-week home delivery schedule, coupled with reports that the amount of mail being handled continues to decline, makes this a reasonable question to ask.
The answer, of course, may seem more or less reasonable depending on one's point of view.
Americans are increasingly using the Internet and faxes instead of paper envelopes for their correspondence. Private companies now compete with the post office to deliver packages. Consequently, the Postal Service has seen a dramatic decline in the volume of mail it handles, even as the number of homes and businesses has grown.
For example, in 2006, the Postal Service handled 213 billion items. By 2009, that number dropped nearly 17 percent, to 177 billion. Mail volume is expected to keep falling, reaching 150 billion items a year by 2020. Less mail means less revenue, which makes it more expensive to deliver what's left.
Those who live in urban areas, where Internet connections are fast and many private companies deliver packages, may legitimately wonder why anyone would bother to save a system in which one- third of the deliveries are considered "junk mail" by recipients.
Yet there are plenty of rural areas where affordable, high-speed Internet access doesn't exist -- remote areas that aren't profitably served by private deliverers. Those residents are rightly concerned about losing Postal Service.
Last week, Postmaster General John Potter detailed the system's problems and possible solutions. At the same time revenue and mail volume have been dropping, his reports said, costs have increased with higher fuel prices and a growing number of retiree pensions. (The Postal Service is required not only to pay current pensions, but also to set aside $5.5 billion a year to prepay retiree health benefits.)
If nothing is done, the Postal Services faces losses of up to $238 billion over the next 10 years, said Postmaster Potter, who has already begun actions to save the agency up to $123 billion during that time frame. That still leaves a $115 billion gap.
The postmaster suggested a number of ways to close that gap. Two that have received the most attention are raising rates ($15 billion in revenue) and cutting one day of mail delivery (a $40 billion savings).
Given the economic realities, it is likely that both eventually will be enacted and Americans will adapt.
But raising rates while reducing deliveries could push more people to use electronic communication and private delivers, exacerbating the Postal Service's problems. Which is why it's time for this nation to address the root question: At what point does the U.S. Postal Service become obsolete?
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