According to Postmaster General Patrick Donahoe, 7 out of 10 Americans agree that the Postal Service should stop Saturday mail delivery in order to cut the Post Office's huge budget deficit. Just one problem, General: The savings won't be nearly enough.
If you ask the postmaster general, saving the Post Office will require shutting down one out of three post offices, laying off tens of thousands of postal workers, and ending Saturday mail delivery. Trouble is, he's wrong.
The USPS is still running in the red, and facing an $18.2 billion annual deficit as early as 2015, The Postal Service's solution in a nutshell: Give customers worse service, and charge them more for it. Where have we heard this before? (Hint: the airline industry.)
In a last-ditch effort to save itself from bankruptcy, the Postal Service is forging ahead with plans to close half of its 500 mail processing centers and roughly 3,700 of its post offices. The result: Deliveries will take longer.
If the USPS went into bankruptcy, would anyone care? Not according to former UPS board member Gary MacDougal, who argued in a scathing attack last week that "the rapid growth of email, online bill paying," and private parcel delivery firms like UPS and FedEx has made the Post Office obsolete. Statistics suggest he's right.
On Tuesday, Postmaster General Patrick Donahoe went before the Senate Homeland Security and Governmental Affairs Committee to plead for a government bailout. USPS is losing $9.2 billion a year and is currently on track to lose $20 billion annually by 2015. How can it be saved?
The U.S. Postal Service warned that it will miss federal payments totaling an estimated $6.8 billion by October, unless the government steps in.
The U.S. Postal Service is considering closing 2,000 post offices across the country this year. This could put thousands of government employees out of work. A short-term win as part of deficit reduction could be a long-term loss for employment and the economy.
The U.S. Postal Service's annual loss more than doubled in fiscal 2010 compared to a year earlier as mail volume continues to slide while interest costs related to workers' compensation climb.
Fourteen months after the last price hike, the USPS has proposed a two-cent increase in the cost of first-class postage, which would push the stamp to 46 cents. If approved, the new price would be effective Jan. 2, 2011. Still, the higher rate won't fix what really ails the service.
