The United States Postal Service is nosediving. In its last fiscal year, it lost $8.5 billion, which was $4.7 billion more than the year before. In an attempt to stem some of the losses, it's planning on hiking rates in April. With the use of postal mail dwindling, America's massive infrastructure of post offices can remain useful by imitating the diversity of products sold by the Post Office of the United Kingdom. I traveled there, where the local Post Office is innovating its services to stay relevant to its citizens.
Like America's Postal Service, the British Post Office is declining, too, partly under onerous pension expenses, but it's been proactive in trying to keep the system relevant for a changing society. The head of it, Ed Davey, recently pledged to "expand its financial services and become a genuine front office for local and national Government."
Should America do the same? Post offices are a national asset without equal. There are some 36,000 branches of the post office across America. Imagine if you could use your local post office as a one-stop shop for banking, bill paying, insurance, and a variety of government services. If the U.S. Mail's storefronts partnered with a suite of extra services to make extra money and create a more convenient storefront for Americans, what would it look like?
A lot like Great Britain, as the video shows.
Our Postal Service is an independent branch of the government -- technically, the Executive Branch. Our mail system has not received taxpayer dollars since the early 1980s, which is why as snail mail use sags, the postal rate skyrockets.
In recent years, increasingly burdened by over staffing, the U.S.P.S. has tried to increase revenue by aggressively "upselling" customers with add-ons such as insurance and delivery confirmation, but it hasn't taken the bolder step of partnering with a wide array of government and banking institutions to make government-related chores easier for Americans.
With American financial institutions writhing in the mud, soiled by scandal and bailouts, the time may have arrived for a new national banking institution to step in. While our post offices could partner with major brands, perhaps the better tactic would be to create its own guaranteed Post Office-branded bank, which could issue many of the same services as the British version does through its network.
Britain, which like us has been closing branches in recent years, just wrestled with the idea of creating a government-backed "Post Office Bank" that would draw customers to the Post Office. The idea had been growing in popularity for years, but it was scrapped for now out of recession-related concerns. The cash-strapped government has also started privatizing portions of the Royal Mail service.
Improve your investing savvy with the right financial toolset.View Course »