USPS Can Not Compete with Private Enterprise and Internet

COMMENTARY | The USPS is in another crisis. With pieces of mail delivered slumping by 7.6 percent in the first three months of 2012, Postal Service officials are pleading to congress to bail them out. Unless help is forthcoming, The Postal Service could reach its debt ceiling of $15.4 billion debt this year, causing default on pension plans. In the last fiscal year the department lost $5.1 billion, stating it would have been twice that amount had congress not eased regulations pertaining to pre-funded health benefits for retirees.

The USPS has been failing for years. The last year the postal service made a profit was 2006. Between FY2007 and FY2011, the department lost $25.4 billion. Over the years, The Postal Service has not been indifferent to its unsustainable situation. In April 2011 the average cost of mailing service was increased 1.7 percent and in January of the same year shipping costs rose 3.6 percent.

Implementing strict cost control incentives, USPS reduced total employee work hours by 25 million in the first nine months of 2011. The previous three years The Postal Service had reduced total labor by 240 million hours. Another move to defray cost came through renegotiated labor contracts to reduce new employee wages by 10 percent, and a recommendation to close as many as 3,700 post offices may soon be implemented.

As the USPS continues its decline, other carriers like FedEx and UPS remain stable and continue to produce profits, but try as it may, The Postal Service has not been able earn more than it pays out.

The obstructions to the survival of our national mail delivery service are multiple and complex. Competition from a variety of private enterprise companies that must be efficient to succeed, and the advent of new technological innovations have rendered the motorized pony express obsolete, and are major factors in its decline.

Some suggest it is time to put it out of its misery, but that is easier said than done since it is an American institution, and guaranteed by Article 1 of the Constitution of the United States. In today's social climate, no one is anxious to have that document tampered with, although in our economic situation, pouring good money after bad may not be the best idea either.