We are all killing snail mail—and that’s a big hairy problem!

Technology is a big part of the cause...but without a universal mail system, business as we know it stops.

The current issue of THE WEEK [December 4, 2009] ran an article, “The shrinking post office,” that shouldn’t really surprise us—that the USPS is in considerable trouble—mostly because of the evolution of technology and internet services in the lives of Americans today, and what we have done with both.  For the past three years mail volume has declined—this year alone by almost 13%; next year the decline is expected to be approximately 8%.  There’s no end in sight. 

Here's the problem at hand.

Losses for 2009 will be about $4B and by the end of 2010 the part-private, part-public organization’s debt is expected to reach $13B.  But it hasn’t been for the USPS’s lack of trying.  It has cut over a quarter of a million work hours in the past decade, done away with 200,000 of its quintessential blue mailboxes.  However, with $80B in annual expenses, cuts have not kept up with the decline in revenues. 

With more retail counters than Starbucks, McDonald’s, and Wal-Mart combined, the USPS dilemma is simply a big problem to tackle.  As the country’s second largest employer, the USPS has 630 thousand full-time employees with generous benefits packages [anybody heard of GM?] and tens of thousands contract workers.  Compensation and benefit packages account for 80% of the Post Service’s expenses—compared to only 50% for UPS or FedEx. 

[Little known trivia about the Post Office's financials: 'way back in the early decades of the 20th century--the two principle sources of revenue for the U.S. government came from tariffs and the USPS--it didn't always lose money, indeed, it was incredibly profitable!]

Furthermore, what’s remarkable, the agency can’t take the steps necessary to help itself—because it is not really an independent entity.  Steps to save money by doing away with Saturday delivery or closing locations—there are 2,000 post offices in the country which serve less than 100 customers each are--until now, at least--not viable options, for congressional approval is needed, but not forthcoming. 

One of the most amazing things about all of this is that this "vital" service represents a product in which the customers are estimated to shred 90% of their mail—without reading it! 

Why is this happening?

What accounts for this set of circumstances?  For starters:  eMail, electronic billing, internet payment services, telephone rates that offer the benefit of an immediate, direct conversation over a slow travelling letter or note—a far cry from how the country used to view and use the Postal Service!  And yet, it would be hard to imagine doing without the USPS when we need it:  for package delivery, publications and catalogues, some mail. 

There isn't an easy solution.

For those who say, let FedEx or UPS take over the task—they surely can do a better job—don’t be so certain.  Indeed, I’m pretty sure that neither of those firms would want the job nor could do it very profitably, if at all.  They’ve made their bones on the high-margin, lucrative items, not the door-to-door to everybody’s house, delivering low-margin post-cards for 17 cents each, virtually every day of the year.  Indeed, there’s little money to be made in that market; such a business strategy would be the equivalent of the proprietary, for-profit, specialty-service medical center trying to put the county hospital out of business—that’s in no one’s game plan! 

Despite all the promise from new technologies we still need snail mail.

It’s a big hairy mess for both commerce and consumers.  In business terms, the search should be on for several things:  a new business model; a different delivery system, a product that gets the good stuff—and not the junk--to our places of work and home.  In marketing terms, the precipitous decline of the USPS’s product life cycle is around the corner…and there’s either going to be a re-invention of what we have come to call the Postal Service or there’s going to be a very big price tag to pay for each and every mailed-piece, each and every year. 

Even though we’ve all—albeit inadvertently--helped to play a part in the Postal Service’s demise, the reality is that in a civilized society consumers and business alike need a universal, door-to-door mail delivery system at rates affordable to all—but the product we once knew, which once made so much sense, and used to serve a clear need—that’s all changed and is changing still. 

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