Last week, the United States Post Office Board of Governors announced that it will cancel plans to drop Saturday delivery that were set to go into effect in August. While this is good news for direct mail marketers in the short term in that at least we can plan for delivery schedules, the larger issue remains: What is the long-term fate of the post office?
It has been well documented that the post office has been hemorrhaging money, to the tune of losing $25 million per day – equating to roughly $16 billion in losses in 2012. Obviously these numbers cannot be sustained.
Stopping Saturday delivery – like it or not – would have made only a slight dent in the losses (hard to believe I’m calling $2 billion per year a slight dent). And a price increase could help, but trying to make up that much ground with price increases would be a nail in the post office’s coffin. Significant belt tightening is critical. I don’t claim to be an expert on post office policy, but there are places that Congress and the USPS Board of Governors can look to find help.
No shortage of ideas to fix the post office
It only took me a quick Google Search to find a wealth of ideas from various people and organizations, and even examples from other countries that could help the post office be more efficient.
- Richard Geddes, PhD., associate professor in the Department of Policy Analysis and Management at Cornell believes that privatizing the post office would be a fix, citing success stories from several other countries including the entire European Union and New Zealand. http://www.news.cornell.edu/stories/2013/02/geddes-delivers-postal-service-fix-set-it-free
- Four postal industry veterans, including a former deputy postmaster general, released a report in January stating that taking the post office to a public/private hybrid system could be a solution that allows the post office to remain largely public but also infuse the ingenuity of the private sector. It’s a very interesting idea. http://www.napawash.org/wp-content/uploads/2013/01/Hybrid-Public-Private-Postal-Service-1-2-13-3.pdf
- Some other sources have claimed that the post office could remain fully public and make up lost money by diversifying its product and service offerings, and generating supplemental income by handling things like driver’s license renewals and title filing.
Congress needs to act NOW
The above ideas all seem to have their merits, but also come with some inherent risks. However, none provide a greater risk than maintaining the status quo. Far too many people depend on the United States Postal Service, including direct marketers. Even in this digital age, direct mail is still a vitally important part of the marketing communications mix that allows us to reach people using the method they prefer – phone, email, text or, direct mail. If the post office fails, the effects would be devastating to our industry, which produces over $2 trillion in annual sales.
In addition, we can’t simply count on private providers to pick up the slack. According to a Huffington Post article from last year, private carriers FedEx and UPS don’t have interest in delivering letters, postcards and other first class mail – and both actually contract with USPS for the delivery completion portion of certain shipments on a regular basis. In fact, according to spokeswoman Maury Donahue, FedEx “support[s] efforts to ensure that the Postal Service is able to successfully manage its business. We believe that a healthy Postal Service, the largest postal operator in the world, is important to America.”
I couldn’t agree more, and I urge Congress to enforce greater accountability of the United States Post Office. Your comments are welcomed.