Will Cutting Saturdays Save the Postal Service?
Neither rain, nor snow, nor sleet, nor hail may stop the Postal Service...but high costs? Maybe. Last month, the Atlantic Wire covered visions of the future of the beleaguered United States Postal Service. This week, the USPS took a drastic step to save itself, announcing that it would stop delivering mail on Saturday, a move projected to save almost $3.5 billion a year (although the Postal Regulatory Commission (PRC) has a more conservative estimate of $1.9 billion).
Yet this may not be enough. Whether it's $1.9 billion or $3.5 billion saved, "it's peanuts considering the agency is projected to lose an average of $23 billion a year for the next decade," writes Matthew Phillips for Newsweek. Phillips sees a serious catch-22 for the USPS: if the PRC approves the plan, it will go to Congress, which has been growing "frustrated" with Postmaster General John Potter's promises of fiscal solvency while the price of postage increases annually. "Even if the House and Senate do pass the plan to cut Saturday delivery," writes Phillips, "it'll be a miracle if that happens before the plan is set to go into effect in 2011. In the meantime, the Postal Service will just keep losing money and probably raising postage rates, which it has done eight times since 1999."
Phillips pessimism isn't confined to Congress. Even if the plan to cut delivery gets through the House and Senate, the direct mailers and catalogues that makes up the majority of the USPS's business will be forced to internalized the increased costs, leading to decreased circulation. Phillips notes that "there are now 8,000 fewer catalog companies in the U.S. than there were in 2006, [and] the number of catalogs mailed has dropped from 20 billion in 2006 to 13 billion last year." Other mail-order businesses like Netflix will also take a huge hit.
Phillips paints a dreary picture of Postal Service's future. Is there hope for the U.S. mail system, or will a bad economy and skyrocketing costs do what apocalyptic precipitation has failed to do?
This article is from the archive of our partner The Wire.