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Saving the Post Office
Post offices give away small, cardboard scales to help customers determine how much postage their mail needs.
(By Julia Ewan -- The Washington Post)
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"To their credit, they went along with it," said company president and chief executive Ken McBride, who deems the test a success. From May to September, customers bought 3.5 million PhotoStamps, he said, featuring adorable kids, bouncy puppies and romantic moments.
"We believe a lot of this is new revenue," McBride said. "Customers are using PhotoStamps and coming back from electronic means of communication. They're excited about it, so they're sending real invitations rather than electronic invitations, personal letters instead of e-mail."
* * *
Behind the scenes at the Postal Service lie both its best and worst stories.
Since 2000, the agency has gone through an astonishing makeover of automation and efficiency; reducing staffing by 100,000 to just over 700,000, all through attrition; while delivering more mail to more delivery points. Last year, the post office took roughly 212 billion pieces of mail to 144 million addresses, 2 million more delivery points than in 2004.
What postal officials find most gratifying is that on-time delivery has improved, too: Today, 96 percent of mail is delivered on time to the Zip codes that should only take only one day for delivery. Eight years ago, that figure was 92 percent, Day said.
Businesses and other big-volume mailers are bar-coding mail so it can be processed faster and automatically. New optical readers can decipher all but the worst handwriting on envelopes.
And last year was a particularly good year, with mail volume up, and even first-class mail rising one-tenth of a percent. But these results belie an underlying erosion in the most important type of the Postal Service's business.
About two years ago, first-class mail fell below the 50 percent threshold of mail volume for the first time. It now accounts for about 46 percent of all mail, while direct-mail marketing items represent 49 percent. The rest is packages. The package-delivery business is so dominated by UPS and FedEx that the Postal Service now partners with these private carriers along parts of the delivery chain. The theory is that it's cost-effective for both if only one delivery person has to walk up to a house. There are even FedEx boxes in some post offices.
The decline in first-class mail is partly because people are writing fewer letters, but it's also closely tied to the banking industry. The more people pay bills online, the more money banks save, so they're making it easier to do. Financial remittances represent about $17 billion of the Postal Service's $70 billion operating revenue, so it's a big chunk to lose.
"My concern would be . . . there comes a tipping point in the financial services industry where the balance goes so heavily towards electronic means of communication for bills and bill payment that they may get more aggressive in providing incentives to customers to get them out of the mail," Day said.
To deal with the expected decline in revenue, the Postal Service needs to raise money in other ways and cut costs, and that means several looming battles, Day said. Rates will likely rise again for first-class stamps and for direct mail, perhaps as early as next year, he said.
