
Headlines say the post office may have to shut down.
First, clearly the news media do not fully understand why their product is faring so poorly in the new economy. Headlines like, “Post Office is Going Out of Business” are too sensational to be credible. Even if it were accurate and true (it isn’t) people just don’t “buy” it anymore. Most people aren’t willing to pay for sensationalism posing as news. There are too many other ways to get it. But that’s beside the point….
The post office is indeed in financial trouble. There are numerous reasons for this, from management problems to the cost of gas, but clearly the overarching problem for them is that there are too many other, more efficient ways to send things. We just don’t need the mail like we used to. And we don’t use it. Their volume goes down every year. All in all this is a good thing, if you care about the environment and natural resources.
But the post office marches on trying to fulfill the same requests they fulfilled in the days before we had e-mail, faxes, broadband, UPS, yousendit.com, etc. On the rare occasion I mail a letter or document these days I’m usually not all that concerned about when it arrives. If I am, they do (wisely) have options to help. But the general mail, where I can stick something in an envelope and have it delivered across the country for less than a dollar, is where I think a big part of the problem lies. That just seems too cheap.
Raising the price a little isn’t going to help that much. It would need to be raised a lot, regularly, which is a problem because it reaches a point where it will drive more people away, necessitating an even larger increase. The model just doesn’t scale in its current format. One trick, in this particular case, is to lower costs. How to do that? Well, how important is it really to have your mail delivered every day? If my mail came every other day, or even every three days I couldn’t care less. What’s going to be in it that’s so time sensitive that it’s a big problem for me to get it two days later, at most? Likewise, when I mail something somewhere I already understand that the delivery time may vary by three or four days as it is. Bills and payments are about the most time sensitive commonly mailed items, and that stuff is going electronic at an explosive rate, so most of it isn’t likely to be a factor in a few years.
They are fulfilling a promise (request) that hardly anyone cares about anymore. It’s expensive and unnecessary.
This is just the simple stuff.
The harder question is whether they are going to be able to compete effectively with Fed-Ex and UPS for the package carrying business. Currently they win only on price. In every other way those other two carriers are better, and there are others behind them that are competitive. A business plan that wins on price while going bankrupt isn’t much of a plan.
I fear that we will end up subsidizing a flawed business model here. Nothing new I guess…
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