Americans not going postal anymore

What to do with the Post Office as we shift to emails, texts and downloads

Michael Fitzgerald By Michael Fitzgerald

Americans aren't lining up for the Post Office these days

The Post Office has endured rain, sleet, snow and hail. But it may have met its match in pension funds and email.

The U.S. Postal service, offspring of Ben Franklin, knitter of a nation, secure employer  and icon, is faltering. It struggles to fund its pension plan, which needs a $5.5 billion payment annually for the next five years. Pensions aside, America’s second largest employer faces dire consequences at the hands of societal change. Americans pay bills online, text each other instead of writing letters and download their reading, instead of getting it in the post. The post office simply does not have as much to deliver as it used to.

Still mailing it in

This week, the week before Christmas, features the Post Office’s busiest day of the year. And the U.S. Post Office is a busy place. It still generates $68 billion in revenues. It is expected to handle nearly 80 billion pieces of first class mail this year. A few years ago, it handled almost half the world’s volume of mail, generating about a quarter of world postal revenues. Supporters note it ships to far more addresses than UPS or FedEx, even as they can’t quite justify why it needs to exist in its current form. While the Post Office has plenty of critics, it is considered the best postal service in the world’s 20 largest economies.

Many Americans do love their Post Office. Talk of closing locations sends phones ringing off the hook in politicians’ offices. Sites like Save the Post Office collect comments on why people love the Post Office (for one, small town post offices are “one of the small wonders of the world left on earth.“)

Some say not only can it be fixed, but it could become an innovation engine. It could, for instance, create a national email service, with an address for each American, then sell ads against the email.

It wouldn’t be the first post office to try to remake itself. Here are some things tried elsewhere:

Special delivery

Financial services. Japan’s post office is also the world’s biggest bank, with about $3.4 trillion in assets. It sells insurance. A number of European postal services also offer banking services and insurance services. India is allowing its post office to offer banking services. US politicians have been loathe to let a government-backed agency compete in financial services. Another debt-heavy country, Britain, decided it was too expensiveto fund a Post Office Bank.

A Royal Mail box in Britain

Franchise it.  That’s the method being used in places like Canada and Australia. They’re selling rights to act as a franchise to supermarkets and drugstores. In Canada, though, some think the problems remain stark, despite franchising. Australia’s postmaster is betting not on franchises but parcels from e-commerce will be what keeps the postal service thriving. But franchising could help the post office cut its huge employment base (only Wal-Mart employs more people in the U.S.), easing its pension woes. The Post Office has set up shop in Office Depot stores around the country.

Go digital. The Post Office could become a digital communications company, offering services like digitized physical mail, a la Swiss Post and at least five other national post offices. This was one of the arguments put forth by the Government Accounting Office. But such a radical move will likely see employment cuts and service cuts, especially outside of urban areas.

Become a government service bureau. Post offices in Finland offer other government services, as does Australia Post.

Privatize it. Popular with people who believe postal workers are paid too much, privatizing has been tried from Germany to New Zealand. It saves on staffing — New Zealand’s post office handles 20 percent more volume with 40 percent less staff — but it generally means less coverage, and some argue less personalized service.

None of these things are panaceas, here or elsewhere. But some of them might mean the Post Office won’t get stuck in a box.