The U.S. Postal Service (USPS) has 31,600 locations and over 500,000 career employees and 140,000 non-career employees. It also lost $656 million in its fiscal second quarter on revenue of $17.5 billion, a number that was barely more than flat compared with the same quarter a year ago. In the private sector, the USPS would be a perfect candidate for downsizing, a process that needs to get underway.
Postmaster General and USPS CEO Megan J. Brennan made the case for shrinking the organization in her comments about the quarter:
Despite growth in our package business, our financial results reflect systemic trends in the marketplace and the effects of an inflexible, legislatively mandated business model that limits our ability to generate sufficient revenue and imposes costs upon us that we cannot afford.
Congress is not inclined to change the USPS mandate, so Brennan’s remarks about revenue are particularly telling.
Many of the 31,600 post office locations are in small towns. Some have annual revenue in the tens of thousands. Political considerations have to be the only reason these are still in operation
The USPS also persists in offering delivery all five weekdays and on Saturdays. The case against this is simple. It is not essential that most items that go through the system need to be delivered on a specific day. If exact day delivery is needed, the USPS, FedEx and UPS all offer that option.
No one wants to see tens of thousands of postal employees put out of work, or small local offices that may have been existence for decades closed for good. However, the USPS’s own numbers make the case time and time again. The USPS may not be obsolete, but many of its practices and its structure are.
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Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
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