Wednesday, April 14, 2010
Post Office Needs to Make More Cuts
Over the last three years, the U.S. Postal Service has lost nearly 12 billion dollars because the volume of mail plunged 17%. This is due to the weak economy and the high usage of e-mail. Even though it chopped 40,000 positions through early retirement packages and attrition in fiscal 2009 alone, the agency expects to suffer a record loss of more than 7 billion dollars in fiscal 2010. According to the postmaster general, swift action must be taken to avert a financial crisis because the Postal Service’s business model is not viable. The Government Accountability Office’s report said that the recently proposed turnaround plan recognizes that immediate actions are needed and that the Post Office has made “limited progress” on some options like closing facilities.
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2 comments:
The USPS is making the right move. The USPS is independent of the government, so it faces hard, not soft, budget constraints. It needs to change its model or it will no longer be able to operate. Besides the use of email, many people are probably paying bills online. This further lowers the need to have paper copies sent. It may be likely that in ten years the only thing sent anymore will be packages. It will be interesting to see how the USPS adapts. It is also interesting to see if people will let an institution like the USPS that has been around so long die. The market might force them to close, but will society do the same?
Since the creation of e-mail. It is obvious that the USPS has to take a business model similar to those of UPS and FedEx to remain competitive.
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