Another Case for Shuttering Post Offices

By Douglas A. McIntyre Updated Jan 11, 11:43PM EST · Published May 12, 8:35AM EDT

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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.

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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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.