How Can The Post Office Losing $57M Per Day Survive?

US Post Office losing billions each quarter and continuing losses.

Interesting question. And this is not something that is a short term situation. They have been losing billions every quarter. Their 3rd quarter, which is the April to June period, results in a loss of $5.2 billion. And the tax payers are going to be on the hook for that money. While the Post Office must be in business to deliver the mail across the country, this kind of a loss is rather significant and one which cannot continue to occur. In the previous quarter, they lost in the billions as well and there appears to be no end in sight.

If this was a privately held company which continued to sustain these kinds of losses over many years, they would no longer be in business. But the US Government continues to prop up the USPS to continue providing services. And part of the problem is the US Government. The USPS wants to eliminate Saturday delivery services which is very costly for them in a cost cutting move. But, they cannot do that without the approval of Congress. And it does not look like they are going to get that approval any time soon while daily losses continue to climb.

Retirement costs are also plaguing them as well as health benefit cost rising. The biggest problem is that the Post Office has not responded to changing technology. With the growth of email in the 1990's, they knew what was coming, but did not make any changes to try and leverage the changing technology to their advantage. And that is mainly because of the US Government regulations.

In a famous episode of Jerry Sienfield, Kramer attempts to cancel his mail. All of it as he has other ways of getting his bills and communicating with other people. He wants to stop receiving mail period. And that is the reality of today society. The importance of getting mail from the Post Office is greatly diminished as we all use Bill Pay and do not receive paper copies of bills. Instead we get them by email.

The Post Office needs to branch into some other areas as a way to return to profitability.

With coming Postal Service Changes, Are You Prepared?

Expected reduction in services will impact small businesses

With the numerous reports of problems at the US Postal Service, we can expect to see changes which are going to impact just about everyone in the US. There are probably going to be closures of distribution centers, closer of some local post offices and first class mail taking longer to be delivered. If you rely on the US Postal Service for sending and receiving mail, now is the time to take a hard look at what other options you may have. With obvious delays in getting mail delivered, alternatives may make you more efficient.

The US Postal Service has a monopoly for mail delivery, but there are some other alternatives, such as UPS or FedEx. These are obviously more expense than what the post office provides, but you are pretty much assured that it will arrive by a specific time. With delays by the post office, that may longer be the case. And for your small business, relying solely on them is going to make it more difficult in the future. You need to move as much of your business dealings as possible to electronic transaction instead of paper based involving US Mail services.

Paying your personal bills online through your bank is very common place now and this is a free service being provided by them. You are already comfortable working with email and if you are reading this, you are comfortable accessing the web. Now is the time to look atlternatives to reduce your reliance on the post office. Paying your business bills electronically is the first place you should start. While not everyone can receive electronic payments, if they have a bank account, there is a way to move money around.

PayPal is another alternative which a growing number of businesses are using to receive and send payments. There are other like services if you do not want to take advantage of the services of your bank. All of these are related to receiving payments or sending payments. You should move to using email to communicate with clients when sending them invoices for payments and not US Mail.

If you are using US Mail to advertise your business in mailers or through other services, now is the time to look at alternatives. There is Google Places for instance which you can use to show your business locally in Google searches for like services. You can advertise through online services, such as Google’s AdSense. There are varying costs and methods on how that process works. If you are interested, there are a number of resources on the web. You can also create mailing lists just like some have done years in the past collecting addresses. Instead you are collecting email addresses. You can then send out emails to promote your business.

Obviously, having a web site to represent your business is key to your strategy. People need to be able to find your business. With the move to mobile devices and searching for things on those devices, you need to make sure you consider making your web site readable by mobile devices. In a few more years, searching on mobile devices is going to exceed searches by computers. You must be prepared for that.

With changing technology, things are changing from what has been done from over 10 years ago. And it is the continuing changing of technology that you must keep up with. UPS, FedEx and others will still be around to deliver packages to destination, but your concern should be methods to reduce your dependence on US Mail as its future is uncertain. You can expect to see costs increase and service levels decreased. As a business owner, now is the time to reevaluate how your business is using technology and how you might use more of it.

US Postal Service Losses Threaten Service Levels

Mail deliveries may no longer occur in a timely manner

We have been hearing for the past few years about the financial troubles with the US Postal Service and the continuing operating losses with no end in sight. Current plans are talking about reducing the losses, but not doing anything to move to profitability. Businesses can only survive for a few years with mounting losses such as what is being reported by the Postal Service. The 4th quarter loss was reported as $3.3 billion with no signs of being corrected.

There have been talks about closing some distribution centers and local post offices which will result in delays. People get up in arms and say that the Post Office cannot do that as they must deliver the mail as it is currently being done. Unions complain loudly as it will result in a loss of members. But, here we are in the middle of the year and we still do not have concrete solutions to implement. All of this is because the Post Office is being over seen by Congress. And it is precisely that oversight which makes it all but impossible for them to make the adjustments to the changing technologies which are impacting their future.

There is talk of changing how first class mail is being delivered today to add a day or two to the time to get a letter delivered. But the bureaucracy surrounding the Postal Service means that nothing is going to get decided quickly on this. And that is exactly where the problem is. How can any business turn around when they have to answer to an authority which does not decide pretty much anything in a timely manner?

For the Post Office to survive in these changing times, it is going to require freedom from the constraints that they are currently under. If closing distribution centers is going to save them money to get closer to profitability, then they need to do that and do it now. If closing local post offices is necessary because there are too many in an area and are not being utilized, then close those locations. The post office is a business which enjoys a monopoly and for that business to survive, it needs to operate as a business and make decisions for their survival.

Changing technology has created a declining business model and will continue to decline without change. Email has replaced letters. Bills being delivered to the home and paid by mail are being replaced by “Bill Pay”. And those are going to continue to increase while the Post Office continues to decline.

If they are not given the freedom to make the needed changes, then Congress is going to have to provide funding for the post office to prop them up so they can continue operating to serve the US population. Raising rates is an alternative, but the legislative requirements to get one are far too cumbersome for any business. Competition from the likes of UPS and FedEx make it even more challenging for the Postal Service.

It is time for radical changes and there is talk of completely reorganizing the Postal Service which would be a good thing. But, if it involves legislative oversight by Congress, it will take years to complete and will probably not meet the needs for the long term outlook for the service.

The Postal Service needs to have a radical overhaul proposed and completed by the end of the year. Anything else is going to result in continued losses and rising deficits.