In an Internet age, postal service reform is long overdue

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Wednesday, January 26, 2011; 7:15 PM

SINCE 2008, the United States Postal Service has cut costs by nearly $10 billion and reduced its workforce, through attrition, by more than 105,000. Yet it continues to hemorrhage red ink: The Great Recession dramatically reduced mail volume; and, in the age of texting and Skype, most of that business will never come back. If present trends continue, USPS will run out of cash before the end of 2011 - perhaps as soon as Sept. 30.

And so USPS was only behaving like a rational business when it let it be known Monday that it plans to shut more than 2,000 money-losing postal stations and branches, and to abandon another 400-plus sites that were previously closed due to structural damage and the like. The move should save $500 million over the next two years. Welcome as it is, that will make only a modest impact on the postal service's losses, which totaled $8.5 billion last year. Furthermore, affected communities can still lobby Congress and postal regulators to thwart shutdowns, even though the services those facilities ostensibly provide are now widely available online and through retail stores. If fully implemented, the proposed cuts would still leave more than 29,000 postal sites in operation, the vast majority of which lose money.

Obviously, USPS needs deeper reform. But management is largely powerless to trim its retail network because the federal legal and regulatory framework, established amid very different political and economic realities four decades ago, makes it nearly impossible to close money-losing sites. Indeed, the law specifically bars the postal service from closing any post office solely for economic reasons. No private-sector business could operate under such a restriction; and the same goes for the postal service, which not only faces technological obsolescence but also ferocious competition from UPS and FedEx.

Congress and the Obama administration must treat the looming postal crisis as the national priority that it is. A place to start is legislation proposed by Sen. Thomas R. Carper (D-Del.), which would give the postal service freedom to trim its money-losing post offices. Crucially, the bill would also allow USPS to offer a wider range of products and services and require labor arbitrators to consider the postal service's financial condition when deciding new pay and benefits.

The choice is clear: The United States can start moving toward a modern, efficient postal service, as many European countries have already done, or it can continue stumbling along until the inevitable collapse.


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