The U.S. Postal Service is in Worse Shape Than You Think

4 years 5 months 2 weeks ago Friday, November 29 2013 Nov 29, 2013 Friday, November 29, 2013 8:17:00 PM CST November 29, 2013 in News
By: Andie Lowenstein, KOMU 8 Reporter
loading

COLUMBIA - As Americans have traded "snail mail" for digital mail the U.S. Postal Service may be in even worse shape than we think.

"From 2007 to 2012 we've seen a $3 billion decrease in revenue with first-class mail volume," said Cheryl Thompson, a U.S. Postal Service Customer Relations Coordinator in Columbia. "We project to see $6.2 billion from 2012 to 2017."

Almost every category of mail, ranging from personal letters to bill payments, has eroded, as shown by a survey released earlier this month by The Heritage Foundation based on USPS numbers. After steadily rising for decades, first-class mail volume hit its peak in 2001 at 103.7 billion pieces. By 2012, it dramatically decreased to 69 billion, the same level as it was in 1984.

The study is by James Gattuso, senior research fellow for regulatory policy at the Heritage Foundation and a former contributor to Bloomberg Government. "Since 1987, the number of such letters received per household has plummeted 80 percent," Gattuso wrote in the study. "The total volume of such mail has declined by 25 percent since 2010 alone."

In May, the USPS published a news release saying it ended the second quarter of its 2013 fiscal year (Jan. 1 - March 31) with a net loss of $1.9 billion. It went on to explain that if Congress doesn't provide the U.S. Postal Service with a workable business model to suit today's marketplace, the agency may continue to face large quarterly financial losses. The Postal Service needs to save $20 billion annually by 2016.

The expansion of e-commerce and flourishing marketing campaigns has increased the Postal Service Shipping and Package business. Shipping and packaging revenue in the second quarter increased by $267 million, or 9.3 percent, compared to the same period last year.

The Heritage Foundation survey data shows "from 2009 to 2012, the total number of packages delivered by the USPS has grown by over 7 percent. Package delivery, however, still generates only about 20 percent of the USPS's total revenue, and in the overall package delivery business, the Postal Service is a minor player, with about 8 percent of the market, compared to 60 percent for UPS and 30 percent for FedEx."

The Senate Homeland Security and Governmental Affairs Committee is considering a bipartisan proposal to stabilize the agency's finances, which includes changing the calculating methods of retiree health care costs.

"Establishing a USPS-sponsored health care program, independent of the Federal Employees' Health Benefits Program (FEHBP), represents approximately $8 billion of annual savings," says Thompson. "The plan would reduce health care costs and yield equivalent or better coverage for the vast majority of employees and retirees."

House Oversight Committee Chairman Darrell Issa introduced a bill in July that on top of easing healthcare prefund payments would cut Saturday delivery of first class mail and completely eliminate door-to-door delivery. However, many lawmakers and postal worker unions have resisted the changes because it may be inconvenient for customers. Under the bill, door-to-door service for new residential and business addresses would shift to less costly curbside and cluster box delivery.

The bill would end Saturday mail delivery in a year. According to USPS, ending Saturday mail delivery would save $2 billion each year. "I do think we could do without Saturday delivery," Columbia resident Mel West said. "That wouldn't trouble too many persons."

The Carper-Coburn plan, introduced by Senate Homeland Security and Governmental Affairs Committee Chair Tom Carper and Ranking Committee Republican Tom Coburn, would allow the Postal Service to begin shipping alcoholic beverages.

"Other private shipping companies are able to deliver alcoholic beverages but the postal service is prohibited by law," Thompson said. "So I'm hoping that with the new legislation they will allow us the ability to mail as well to be more competitive."

The Postal Service is currently evaluating whether both the Senate and House bills would enable it to save the $20 billion it needs by 2017.

More News

Grid
List
COLUMBIA - The UM Board of Curators voted Tuesday to increase tuition by 2.1 percent for the 2019-2020 academic school... More >>
1 hour ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 2:00:00 PM CDT May 21, 2018 in News
COLUMBIA -Utility workers began surveying land on Clark Lane for a sidewalk project designed to improve community safety. "The... More >>
1 hour ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 1:40:00 PM CDT May 21, 2018 in News
JEFFERSON CITY (AP) — A House investigatory committee has expanded its membership for a special session to determine whether... More >>
3 hours ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 12:00:47 PM CDT May 21, 2018 in News
ROLLA (AP) — A Missouri University of Science and Technology student has been sentenced to seven years in prison... More >>
3 hours ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 11:40:00 AM CDT May 21, 2018 in News
ST. LOUIS (AP) — Ameren Missouri is planning a 400-megawatt wind farm in rural northeast Missouri, creating... More >>
4 hours ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 10:44:00 AM CDT May 21, 2018 in News
POPLAR BLUFF (AP) — Authorities say a man's body was found in southeast Missouri and the case appears to... More >>
6 hours ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 8:48:00 AM CDT May 21, 2018 in News
COLUMBIA – With a new terminal on the way, comes more possible changes to Columbia Regional Airport. A public... More >>
7 hours ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 7:55:00 AM CDT May 21, 2018 in News
COLUMBIA – The Columbia City Council will address an ordinance Monday on whether to approve of a special August election... More >>
12 hours ago Monday, May 21 2018 May 21, 2018 Monday, May 21, 2018 2:41:00 AM CDT May 21, 2018 in News
COLUMBIA – The MU Board of Curators voted today to increase tuition by 2.1 percent for the 2018-2019 school year.... More >>
16 hours ago Sunday, May 20 2018 May 20, 2018 Sunday, May 20, 2018 11:00:00 PM CDT May 20, 2018 in News
MARSHALL - A standoff between Marshall police and an armed man ended without injury. According to a news release,... More >>
17 hours ago Sunday, May 20 2018 May 20, 2018 Sunday, May 20, 2018 9:53:00 PM CDT May 20, 2018 in News
ROCHEPORT - The city of Rocheport honored two men on Sunday whose legacy has stretched across the state of Missouri.... More >>
20 hours ago Sunday, May 20 2018 May 20, 2018 Sunday, May 20, 2018 7:09:00 PM CDT May 20, 2018 in News
AUXVASSE - Gov. Eric Greitens spoke at the 16th annual Fire Fighters Memorial Service on Sunday. The service was... More >>
23 hours ago Sunday, May 20 2018 May 20, 2018 Sunday, May 20, 2018 4:05:00 PM CDT May 20, 2018 in News
COLUMBIA - The Missouri State Highway Patrol is taking to social media to spread awareness of National Safe Boating Week... More >>
23 hours ago Sunday, May 20 2018 May 20, 2018 Sunday, May 20, 2018 3:36:00 PM CDT May 20, 2018 in News
FULTON - All 6-year-old Sam Santhuff wanted to do was comfort children in the hospital, even though he was there... More >>
1 day ago Sunday, May 20 2018 May 20, 2018 Sunday, May 20, 2018 6:47:00 AM CDT May 20, 2018 in News
CAMDEN COUNTY - The Missouri State Highway Patrol has released the identities of the three people killed and the two... More >>
1 day ago Saturday, May 19 2018 May 19, 2018 Saturday, May 19, 2018 6:42:00 PM CDT May 19, 2018 in News
COLUMBIA - Children in Columbia have a chance to get paid to play. Columbia Parks and Recreation started its... More >>
1 day ago Saturday, May 19 2018 May 19, 2018 Saturday, May 19, 2018 6:10:00 PM CDT May 19, 2018 in News
HAVANA (AP) — The Latest on the crash in Cuba of a passenger jet with 113 people on board (all... More >>
1 day ago Saturday, May 19 2018 May 19, 2018 Saturday, May 19, 2018 5:23:00 PM CDT May 19, 2018 in News
COLUMBIA - Over 90 people showed up at the Burr Oak Brewery for an afternoon of puppies, yoga and beer... More >>
1 day ago Saturday, May 19 2018 May 19, 2018 Saturday, May 19, 2018 4:50:00 PM CDT May 19, 2018 in News
Columbia, MO
Broken Clouds 78°
4pm 77°
5pm 77°
6pm 76°
7pm 75°