Tuesday, September 6, 2011

US Post Office: Time to Mail It In?

When I first got out of college and began paying attention to the world, I recall expressing my bewilderment, to anyone who would listen, that the post-office could take my correspondence and deliver it to the other side of the country for a mere 22 cents.  It struck me as an unsustainable model that, without certain government mandates and exclusive advantages, could never survive in a free market.

Now it's 2011 and my bewilderment has persisted for 25 years. In fact, each time that I go to my mailbox to bring in the latest load of mail order catalogues and pre-approved credit card offers, I shake my head and mutter.  I gripe quietly that our inexpensive postal rates are essentially a subsidy to support advertising and to promote hyper-consumerism.

In the 1990's, I worked for a company that was one of the major sponsors of the Olympic Games.  This was a tremendously expensive undertaking and many of us, who had direct responsibility for leveraging the sponsorship investment into a return, felt that the money had been largely wasted.  At that time, the US Postal Service was one of the other major sponsors.  I'm still shaking my head.

Now I see that the US Post Office cannot sustain economic viability and many are wringing their hands in search of a solution.  Good thing I figured it out in 1987 -- here's what we do:
  • Deliver the mail only half as often, with half the field force.  Since 80% of the USPO budget is labor, this will yield significant savings.  If it absolutely, positively has to be there overnight, you know what to do.
  • Close most (if not all) of the physical post-offices.  The packaging and weighing services that we all sometimes need are widely available through those ubiquitous private "mail-box" stores.
  • Sell off the prime real estate that many post offices now occupy.  Use those funds to pay up all the pension/obligations in a pre-negotiated agreement with the union whereby the current workers get their benefits protected and those hired in the future get market-competitive compensation.
  • Raise the first class postage rate from 46 cents to about $2.50. I know the junk mail industry will scream but the tree huggers will rejoice.
I know what you're thinking.  All those jobs eliminated?  At a time when unemployment is so high?

Don't worry, it will be a boon for the private parcel companies who will need to add jobs as they gain volume.  Advertising budgets will shift from direct mail to other communication avenues and create jobs in the higher tech industries where all the young people want to work these days.  And don't forget, remodeling of 32,000 post offices will require lots of planning, construction, and decorating labor.

The US Postal Service is a great institution, replete with nostalgic value and proud history.  It is also based on a flawed model to provide a service that is increasingly not needed.  I say it is time to dismantle it.