The Postal Service Should Cut More Than Saturday Delivery

Rick Newman

There will be a predictable uproar over the U.S. Postal Service's decision to stop delivering mail on Saturday. But a better question might be: Why did it stop there?

The postal service is a basket case, with $16 billion in annual losses. If it were a typical corporation, its stock would be plunging and bankruptcy rumors would be swirling. While it's an easy target for jokes and barbs, however, the postal service itself isn't the real problem.

Congress is--because it turned the USPS into an "independent establishment" that's no longer funded by taxpayer dollars, without giving it the independence to restructure itself as needed to deal with revolutionary changes in the way people communicate.

[PHOTOS: The 2013 Washington Auto Show]

As a result, the postal service has been going through a slow-motion death spiral while practically begging Congress to let it make changes that essentially require legislative approval. Congress has been thinking it over for years.

So the postal service now says it will stop delivering ordinary mail on Saturdays, beginning in August, which will save $2 billion per year. It will still deliver packages on Saturdays, which are more profitable. But people dependent on everyday mail delivery (and there are some) will have to adjust.

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If the postal service were truly an independent company, however, the changes would be much more drastic. To its credit, the postal service has hired analysts at firms such as Boston Consulting Group and McKinsey to make suggestions about how to revamp its business model and become profitable.

Some of their suggestions: Cut mail delivery to three days per week. Significantly hike the price of stamps, along with postage for periodicals and promotional material. Slow delivery of first-class mail. Deliver to "cluster boxes" at the curb or at centralized locations, instead of sending a postal carrier to every American's front door.

Every one of those changes would harm somebody, which is why lobbying groups in Washington pester members of Congress to make sure the postal service stays more or less as it is.

Meanwhile, the USPS has proposed other ideas that are reasonable and would be quickly embraced by any real company faced with possible obsolescence. It would like to close hundreds of low-volume post offices while opening small outlets in places where people naturally gather, such as shopping malls.

The post office could raise additional revenue by shipping now-forbidden items such as liquor. It could sell nonpostal products in post offices, ranging from coffee to business services. It could accept advertising. There are lots of ways for a huge organization like the postal service, which literally touches every community in America, to make extra money.

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Yet Congress dithers while the losses mount. If Americans truly cared about the mail, they'd holler at their elected officials to get out of the way and allow the postal service to fix itself. Instead, they're more likely to gripe when the mailman doesn't show up on Saturday. It could be a lot worse, and probably will be before long.

Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.