Post Office: Live or Let Die?

The U.S. Post Office is going broke.  

The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

Without a government "bailout" it's going to cease to be able to function sometime this winter.  The causes of the problem are twofold.  The agency has accumulated enormous ongoing costs due to favorable pension plans, and an expensive labor force:

...decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

And, frankly, the need for mail in an era of email, facebook, and cheap cell phones has dropped substantially, and private competitors, UPS, FEDEX etc. have taken much of the high end commercial business that the Postal Service never really tried to match.

So how could UPS reform to get on a fiscally sound path?  Cut costs:

Mr. Donahoe’s hope is to cut $20 billion of the $75 billion in annual costs by 2015. To do that, he wants to close many post offices and slash the number of sorting facilities to 200 from 500 and trim the agency’s work force by 220,000 people, from its current 653,000. (A decade ago, the agency employed nearly 900,000.)

The postal service has the legal authority to close facilities, although community opposition can make the process difficult. To placate critics and cut costs, officials say they would seek to run some postal operations out of stores like Wal-Mart or to share space with other government offices.

Cutting the work force is more difficult. The agency’s labor contracts have long guaranteed no layoffs to the vast majority of its workers, and management agreed to a new no layoff-clause in a major union contract last May.

In our area, all the small communities have their own post offices.  St. Leonard and Western Shores both have their own small post office, located about a mile apart along the same road (Rt. 765), closer to each other than to the bulk of the communities they serve.  Those could certainly be consolidated.  I suspect all the mail in Calvert County could be better handled by a single larger Center.  Just an example.

Or they could add more "premium" services:

In some countries, post offices double as banks or sell insurance or cellphones. In the United States, the postal service is barred from entering many areas. Still, the agency is considering ideas, like gaining the right to deliver wine and beer, allowing commercial advertisements on postal trucks and in post offices, doing more “last-mile” deliveries for FedEx and U.P.S. and offering special hand-delivery services for correspondence and transactions for which e-mail is not considered secure enough.

But the question then is, why force a quasi-governmental business to compete in a business that multiple private companies already make a successful business with?

I say, let it die.  It was a good idea when Ben Franklin promulgated it over 200 years ago, but technology, and private business have rendered it obsolete.