US Postal Service Loses $5 Billion: Its All Your Fault

blr-editor | November 16, 2011 | Comments (0)

Through rain, sleet and snow - The US Postal Service is in deep trouble

The U.S. Postal Service announced on Tuesday it lost $5.1 billion in the last year, edging closer to default on a multibillion-dollar payment and bankruptcy.

The major reason? Customers like you and I have switched to other options. Email has replaced handwritten letters (when was the last time you handwrote a letter?) Online bill pay has replaced mailed checks. For security and speed, many use Fedex and UPS.

In addition, the weak economy has driven down mail volume as there are fewer business mailings – although you’d never know it, seeing the amount of direct I get every day.

The LA Times writes:

Losses will only accelerate in the coming year, Postmaster General Patrick Donahoe warned, citing faster-than-expected declines in first-class mail. He implored Congress to take swift, wide-ranging action to stabilize the ailing agency’s finances as it nears a legal deadline Friday to pay $5.5 billion into the U.S. Treasury for future retiree health benefits.

Congress will grant a reprieve, it is expected, but in the meantime, the Post Office is seeking to lay off tens of thousands of workers, which it cannot do due to current union contracts.

It is also asking Congress to give back $6.5 billion in overpayments to workers’ pensions, a cent increase in the price of a first-class stamp, and an end to Saturday deliveries.

Even if all these are granted, prospects for the US Post Office are grim. What do you think are solutions to their downward spiral.