May 4, 2012
There is something about the local post office that provokes nostalgia. Buying a sheet of stamps, checking your PO Box, or simply chatting with the local postman about the latest gossip all recall an idyllic life.
The post office in Hope, MN epitomizes the small-town charm of the obsolete, politicized, government-run postal system. On a typical business day, the Hope post office sees eight customers, who require a total of seven minutes of service. The USPS could shutter this underused, loss-making post office and ask the town’s 90 residents to journey 10 minutes to the next closest post office. But the closure was appealed.
Small town local post offices are wonderful in theory. But since 80 percent of all U.S. post offices lose money, major reforms are essential.
Heritage Foundation expert James Gattuso explains the gravity of the problem:
It is no secret that the U.S. Postal Service (USPS) is in financial trouble. Its business is shrinking, with first-class mail revenue dropping 25 percent since 2006. As a result, the government-run enterprise is facing a sea of red ink, losing some $25 billion in the past five years. Losses of up to $20 billion annually are predicted for coming years.
Americans are using their local post offices less than ever before. Electronic alternatives such as stamps.com, as well as sales at supermarkets and other retails stores, have meant fewer trips to the post office. As a result, traffic at America’s post offices dropped 21 percent from 2009 to 2010
The USPS is a slow moving bureaucracy, unable to adapt to market forces and ill prepared to compete with private sector competitors. Post office closures are a slow and laborious process requiring a 60-day public comment period, followed by another 120 days before the Postal Regulatory Commission makes a final decision.
Congress is actually stymieing the most logical reforms. Gattuso reports that the USPS is “prohibited by law from closing individual post offices simply because they are losing money. Congress is also keeping USPS from dropping Saturday delivery, although that step would save close to $2 billion a year.”
With $25 billion in losses over the last five years, new estimates suggest the mail service could lose $20 billion every year going forward. Gattuso suggests several solutions, including closing more underutilized post offices and processing centers and offering new self-service options for customers.
What do you think should be done to reform the post office?