The decline of the American postal service
The Hypocrisy of American Courts
Are Mexican illegal immigrants really the cause of the U.S. socio-economic decline?
The Stupid Headlines of the American Press
The Mystery of the Secret Service Watch
Value of life on the decline: Can a price tag be put on life?
The American Post Office [renamed the Postal Service in 1970] is one of those rare agencies whose creation is given a specific constitutional mandate. But the constitution never stipulated that the Postal Service would have a monopoly over letter delivery, but, alas, it does [with the exception of courier-delivered letters].
Congress gave the Post Office such a monopoly in the 1840s largely due to protecting the Post Office from more efficient private enterprise.
The third-largest national employer [after Wal-Mart and the military], in recent decades Congress has encouraged the Postal Service to behave like a private company and not rely on federal aid. The Postal Service has not received a federal handout since the 1980s, which cannot be said about Amtrack, the federal railway company; and the Postal Service has become more efficient and raised the price of postage stamps in an effort to remain profitable.
Although the company is for the first time competing price-by-price with private couriers UPS and FedEx, the Postal Service is steal behind its private competition.
In 1976, colonial Postmaster General Benjamine Franklin pronounced the goal of two-day mail delivery from New York to Philadelphia. The modern Postal Service delivers mail quite quickly, but not as fast as Google or MSN can.
The Postal Service's most stiffest competition comes not from private land-based competition but that from the Internet. More and more people prefer e-mails to hand written letters. More and more people pay their bills online rather then mail a check.
Given the "perfect storm" of private competition, e-mails and the naturally reduction in businesses during the recession [the current ailing housing and financial markets used to provide lots of business], it is no surprise that the Postal Service is having such a hard time.
Last year saw the biggest decline in mail since the Depression: volume fell by 4.5%, or about 9 billion pieces. The postal service ended the 2008 fiscal year with a $2.8 billion loss, and the next two years may well be worse. “No one knows at what point mail volume will bottom out,” said the postmaster-general, John Potter, in his testimony before the Senate in January. He thinks the service could lose as much as $6 billion in 2010.
In order to stay solvent, the Postal Service has two option: federal bailout or cutting a delivery day. Mr. Potter has gone to Congress asking for a change in legislation that would allow the Postal Service to move to five days of delivery; adding Saturday to Sunday of days when there is no delivery. Polls show that most Americans [I am not one of them] favor doing as such rather than a rise in stamp duties or a federal bailout. Congress is not exactly keen on the idea of cutting the date. As for a federal bailout, no one in Congress is currently proposing that and even Mr. Potter just hinted at the prospect.
Besides those options, there is always the possibility of diversifying the Postal Service. In many Western nations, the Post Office doubles as a bank. Any losses in mail delivery can be recuperated in the banking sector, thus keeping the firm profitable.
But a 2006 law specifically prevents the Post Office from doing anything but delivering the mail. Instead of cutting a day, which will undermine confidence in the Postal Service, or a federal bailout; Congress should change the law and allow the Postal Service to find new ways to make money.
