No safe port for Postal Service in economic storm

Those who anxiously wait for the postal carrier to deliver their mail each day may be in for a disappointment in the future.
 
The traditional six-day delivery schedule for the Postal Service may be coming to an end if Congress gives the nod to the idea. Postmaster General John E. Potter testified before lawmakers this week and asked them to remove the requirement for the semi-public agency to deliver mail six days a week.
 
This regulation was put in place by Congress in 1983.
 
"It is possible that the cost of six-day delivery may simply prove to be unaffordable," the postmaster general said.
 
The possibility of reduced delivery is hardly a surprise. It has been discussed in the past and there is growing pressure on the Postal Service to keep its budget balanced. A provision of the law authorizing the postal agency requires that it be self-supporting, primarily through what is charged for postal rates.
 
The agency is facing two problems. Revenue is declining and mail volume is dropping. Obviously, the two are related. It is like the situation in the private sector where retailers and other businesses are struggling to survive as consumers choose not to buy or choose other options for products and services.
 
The Postal Service had the largest single mail volume drop in history last year - more than 9 billion less mailings than the previous year. It also had a big drop in revenue.
 
The postmaster general told Congress the Postal Service lost nearly $3 billion last year and could lose as much as $6 billion this year.
 
It is likely the volume drop is related at least in part to the current economic conditions in our nation. Less business activity and fewer people with jobs likely results in less use of the Postal Service, something that is beyond the control of the agency.
 
But there is likely more going on here. There have been warning flags flying for years about the intrusion of electronic replacements for traditional mail. Consumers and businesses are increasingly using electronic bill paying rather that mailing payments and bills.
 
Even the mundane practice of sending greeting cards is impacted - as some people turn to e-mailed cards rather than sending them in the mail, or simply stop sending cards and choose personal greetings instead. Have you been getting more Christmas cards or fewer ones in recent years? The answer could be revealing as to the reason for the Postal Service's problems.
 
This is bad news for the Postal Service which has a government-protected monopoly on letter mailings. Less mailings equals less money to operate.
 
So the agency is facing two choices - cut costs or raise rates. It is likely there will be a combination of both methods because there is a limit on the amount of postage increase allowed each year.
 
The Washington Post reported a postage increase is scheduled in May. It could be 2 cents more for a first class stamp, for example, which would be the maximum amount allowed under current regulations that limit the increase to the amount of growth in the consumer price index - 3.8 percent last year.
 
That wouldn't eliminate the revenue shortfall with current volume, so postal officials have to find additional ways to balance the budget. Thus the request for flexibility in the delivery schedule. The postmaster general wants the option to drop a low volume day - probably Saturday or Tuesday - if necessary.
 
Some people won't like this idea, but the alternatives - even bigger postage increases or taxpayer subsidies - are less attractive. Life will go on with one less day of mail delivery. We will all adapt.
 
The ultimate question, however, is whether even this will be enough to save the Postal Service - at least in it present form - in the longer-term.
 
The dynamics of communication are changing. There is less and less reliance on mail as a primary means of communication for both commercial and private use.
 
The Postal Service is facing the same thing many private businesses, including newspapers, are facing now - a need to adapt to a completely different marketplace. Using a tried and true example from the past, no one wants to be the buggy whip maker when cars are taking over.


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Terry Ross is director of The Sun's News and Information Center. E-mail him at tross@yumasun.com or phone him at 539-6870.