http://money.cnn.com/2012/04/18/smallbusiness/postal-service-closings/index.htm?iid=HP_River
With the tightening of the Federal Budget comes a shrinking US Postal Service. For the average citizen it means little. Most of us communicate electronically. But to small businesses around the country, closing post offices are reason to be afraid. Small businesses rely on the US Postal Service for deliveries. Now because of less post offices and less postal workers, small businesses are suffering. The reliability of the USPS is gone. Packages are not delivered on time, and small business owners must go out of their way to make sure mail is delivered.
Forcing small business owners to go out of their way is hurting efficiency....and the bottom line.
5 comments:
It is interesting to think that businesses are so reliant on one another. I also would question whether the government thought of this negative externality associated with deciding to close the post offices?
I don't think the government thought about that. It is just focused on its own bottom line, but it is surprising to think that its actions could still hurt there bottom line because small businesses are very important to the American economy by providing employment to most American workers.
Though it is weird to consider how important the post office is because we take it for granted. I wonder how the other delivery services will respond to this.
I think it will be interesting to see if businesses that are substitutes will be able to fill the gaps that will result in post office closures. Companies such as UPS and Fed Ex will have greater demand, but these closures will definitely hinder the efficiency of the small businesses in the area. Shipping costs will likely rise which will affect the overall price of goods and services.
These are the kind of effects we are going to begin to see with advanced technology. People are doing less and less communication through our postal service when all we need to do is hop on our email. We are slowly moving towards a paperless world and small businesses need to begin finding ways to work without the US postal office.
The US postal service going out of business is no surprise, they deliver mail to almost every single home and business in the entire United States for a mere .44 cents. Billions of items are processed every week, the US postal service has amazing operational efficiency, but profits very little compared to privately owned delivery services. To prevent going out of business the US postal service should raise their prices, it is as simple as that.
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