Changes at the USPS

USPS

213 billion (213,000,000,000)

“Way” back in 2006 the amount of mail that the United States Postal Service, a self-supporting government agency that receives no tax dollars, handled peaked at over 213 billion pieces.  On Monday the 236 year-old agency announced that reduced volume (not to mention some fairly unfavorable legislative restrictions and collective bargaining agreements) was driving the organization to evaluate a number of cost-cutting measures.  Some of the changes include shuttering a number of post offices and distribution centers, eliminating next day mail for the cost of a single stamp (currently $0.44), and cancelling Saturday delivery.  I, for one, am not all that broken up about not having to walk to the mail box on Saturday morning but the other changes could have a profound impact on local communities and small businesses.  The next option for next-day mail is priority mail which begins at about $5 per piece, more than 11x the current cost of a stamp.

USPS volume

If there’s any good news in the announcement it is that the USPS is finally making changes that may give it a shot at long-term solvency.  Current mail volumes for 2011 (estimated) are down to 167.9 billion and while the agency has contracted to just over 645,000 employees, the agency lost $5.1 billion last year and is forecasting a $14 billion loss this year.  These proposed cuts are likely going to be just a step in the journey that the USPS needs to complete if they’re going to hit their goal of hitting $20 billion in annual savings by 2015.

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