Why The Post Office Is Broke

Why The Post Office Is Broke

Postal BoxWell, it’s official, the Post Office is broke! It is stopping Saturday deliveries of your mail. You’ll only be able to get a letter five times a week now, instead of six. Does this bother you? Do you still send mail? How will the lack of Saturday deliver affect your life? To many, it won’t make much of a difference. They send emails and pay their bills online. But that isn’t everyone in the United States. It makes you wonder why the Post Office is so inefficiently run that they are losing money. The answers may actually surprise you.



The world wide web came about in 1991. Now, nearly twenty years later, that’s got to be hurting the Post Office. People send emails and ecards to one another. How many Christmas cards did you send out this year? Sounds like a likely culprit, doesn’t it? You might be surprised, though, that the loss of snail mail makes up a very small percentage of the post offices’s profits. It costs only 46 cents to mail a letter! That’s hardly going to break a multi-billion dollar company! The real culprit (big surprise) is the U.S. Government. Congress passed the Postal Accountability and Enhancement Act in 2006 which requires the Postal Service to pay for their retirement plans SEVENTY-FIVE years in advance. This cut into 80% of the postal service’s budget and caused major losses. Note: No other company in the United States, public or private – including the armed forces – is required to have retirement paid for by people that have not been born yet.



The Postal Service is being hit with its own two-edged sword. On one hand, economically it makes sense to close down the small, rural post offices that have low volume and cost the Post Office money, shut down Saturday service, and utilize smaller buildings to handle the packages and junk mail we get every day. On the other hand, the Post Office is bound by law to perform certain duties (like deliver the mail through rain, snow, heat or gloom…blah, blah, blah…) What are they supposed to do?



Do you hate getting junk mail? The post office does too. Large junk mailers have actual public interest groups on Capitol Hill in Washington to keep their postal prices cheaper than everyone else. Groups you’ve never heard of, like the National Association of Pre-Sort Mailers have lobbied to take away functions that the post office usually does to get your mail ready and farms it out to foreign countries that will do the job cheaper.



The Post Office doesn’t always make the smartest choices when it comes to investments. Like any business, they have tried to renew their brand with a fresh look. Sometimes, this branding can become an expensive failure. One good example is from 2008. The Postal Service decided to create a new series of stamps using the Simpson‘s television show on their postage stamps. Cute, right? Most people didn’t think so. In fact, the Simpson’s cost the Post Office $1.2 million when they had to throw out over 68% of the stock. Last year, things got worse when 10 different products went under and the USPS lost and additional $1.6 BILLION. They cannot continue on making bad choices. Technology is changing so they have failed to keep up with modernization. They have considered several ways on offsetting this and making money. In other countries, Postal Services double as banks for small investors. This could be one way of bringing money in. Additionally, many Post Offices are made of very expensive marble buildings in some of the most prime real estate in the United States. They are virtually sitting on a gold mine that could pull them out of their financial woes.



The Post Office has often been the target of various types of crime. This is not necessarily from the postal carriers, themselves, but people who want to send packages with illegal materials, steal social security checks, or run information scams. Additionally, more serious crimes, like the Anthrax killer of 2001 and the Unibomber are also out there using the postal service to be a vehicle in their dastardly plans. Because of this, the Post Office has had to create it’s own police department, called the U.S. Postal Inspection Service. In 2011, they arrested more than 5500 people, so it is pretty serious. All of this costs the Post Office more money and puts them that much closer to bankruptcy.