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  • Stamps Increase: USPS Seeks To Raise The Price

    The USPS is seeking to increase the price of stamps, which will certainly be disapproved of by American citizens. The postal service is planning a 3-cent increase, which would raise the price to 49 cents, in order to mail a letter. The proposal of this rate increase must be approved by the independent Postal Regulatory Commission. If accepted, the increase would take effect on January 26, 2014.

    As a part of the request for the rate increase, the cost for each additional ounce of first-class mail would increase from one penny to 21 cents. Additionally, the price of mailing a postcard would rise by a cent, to 34 cents. The cost to mail a letter to an international destination would jump up to $1.15, an increase of 5 cents. The New York Times mentions that according to federal law, the post office is not allowed to raise the price more than the rate of inflation, unless it gets the approval from the commission. The post office is also expecting to lose $6 billion this year and will be forced to look to Congress for assistance.

    An increase in rates could hurt media marketing and businesses that rely on postal services, and would likely lower postal volume and revenues. This is not the first time that they have tried to increase the rates and in fact sought an increase in 2010 unsuccessfully, blaming their results on the recession. It sounds like a dangerous decision again and it is unclear how this will have an effect on businesses. Raising the price on necessary things does not seem good for an economy, and industry groups and unions say raising prices beyond the annual limit could hurt the mailing industry and their businesses, as stated by the Chicago Tribune. The postal service seems to be seeing it as a necessary task in order to get rid of their deficit and balance the budget. Stamped mail, the most profitable business of the agency, accounts for 43 percent of its revenue. Although, these sales continue to drop, while the majority of Americans now use e-mail as a form of communication and are able to pay the majority of their bills online.

    A bipartisan bill in the Senate would end Saturday mail delivery after one year and cease door-to-door delivery for new residential and business addresses. It is said that this would save $2 billion per year and was introduced by Darrell Issa, a republican senator from California.

    Image via Youtube

  • U.S. Postal Service Proposes 3 Cent Stamp Hike

    In a new proposal by the financially embattled United States Postal Service, first-class postage could rise 6.5%, or 3 cents, to 49 cents a stamp, in early 2014. The hike would increase revenue by roughly $2 billion a year. The new pricing, along with hikes for other type of mail, including postcards and packages, would take effect on January 26.

    USPS Board of Governors Chairman Mickey Barnett states, “of the options currently available to the Postal Service to align costs and revenue, increasing postage prices is a last resort that reflects extreme financial challenges.” The cash-strapped Postal Services has been suffering great losses due to pre-funding payments for retiree health benefits – the service posted a $15.9 billion net loss last year, and is expected to record another $6.9 billion loss this year.

    The Postal Service, which is under a congressional mandate to increase funds, will require an approval from the Postal Regulatory Commission, as rate hikes cannot exceed the rate of inflation, which is roughly 2% at present. Still, the new proposal seems like a quick fix to some. Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, states, “today’s rate increase is a desperate cry for help from an insolvent Postal Service. Revenue and volume are down dramatically and our mail delivery service, hamstrung by congressional mandates and onerous labor contracts, has been unable to sufficiently reduce costs.” Issa adds, “This rate hike and the ones sure to follow will only push more and more private sector customers to stop using the mail altogether – The rate increase poses a direct threat to the 8 million private-sector jobs that are part of the mailing industry as businesses shift from paper-based to electronic communication and mailers are priced out of business.”

    The struggling Postal Service, established in 1775, and one of the few government agencies explicitly authorized by the United States Constitution, has also tried to cut costs elsewhere, including a proposal to end door-to-door delivery for millions.

    Image courtesy of Wikimedia Commons.

  • Johnny Cash Stamp To Be Released This Week

    Johnny Cash still has a devoted fanbase ten years after his death, and now his legacy is being honored with a postage stamp designed to look like an album cover.

    “The committee selects individuals to be on stamps based on accomplishments in their fields, and Cash was a natural fit,” Postal Service spokesman Mark Saunders said. “He has a huge following, and extends from country to rock ‘n’ roll to rhythm and blues.”

    The stamp goes on sale Wednesday, and a celebration of Cash’s life and work will take place at Ryman Auditorium the same day which will culminate in a concert featuring John Carter Cash, Tommy Cash and Joanne Cash Yates, Randy Travis, Marty Stuart, Larry Gatlin and The Oak Ridge Boys. Jamey Johnson and The Roys.

    Cash’s family approves of the stamp, saying it fits in well with the way they remember the legend.

    “It just truly embodies my father’s spirit, who he was,” John Carter Cash said. “It’s different. That’s one thing: It stands out to me as being unique. It’s very commanding when you see the stamp.”

    The stamps, which are limited edition, are expected to be a big hit for the USPS. The agency has had its share of troubles in recent years owing to a decline in its customer base now that so many people are using internet-based services, but Saunders has hopes that stamps like this one will make at least a small change for the better.

    “We hope that people will buy these stamps and use them,” he said. “Hopefully they will promote letter writing and stamp collecting.”

  • Stamp Prices May Soon Increase Again [Report]

    You know how the U.S. Postal Service keeps raising the price of postage? Well, get used to it, because it looks like the price of stamps may soon be rising again.

    A report out from CNN Money says USPS board chief Mickey Barnett said the board has directed the USPS to “evaluate price increases,” while also noting that, “as a board we are loathe to pursue this approach.”

    It’s no secret that the post office is struggling to make ends meet these days. You’ve most likely heard of the grand plan to eliminate Saturday mail service, but that approach was recently shut down, or at least delayed, as Congress, last month, passed a resolution that the USPS said gave it no choice but to backtrack. More on that here.

    In April, the U.S. House Oversight and Government Reform Committee held a hearing in which Postmaster General Patrick Donahoe discussed the Postal Service’s losses.

    “In the past two years, the Postal Service has recorded $21 billion in losses, including a default of $11.1 billion in payments to the United States Treasury,” he said. “The Postal Service has exhausted its borrowing authority and continues to contend with dangerously low liquidity. We are losing $25 million a day, and we are on an unsustainable path.”

    First class mail use has dropped 28% since 2007, he said, complaining that restrictive laws governing the Postal Service prevent it “from fully responding to these changes in consumer behavior.”

    Something has to give somewhere. Unfortunately for consumers, that may mean paying more to send mail.

  • United States Postal Service Losing $25M a Day

    It’s no secret that the United States Postal Service (USPS) has been struggling for years. The company has seen its revenues fall in the face of email and the new internet economy.

    In February, the USPS announced that it would be dropping Saturday mail delivery to try and cut its losses. However, congress just this month passed a resolution barring the USPS from getting rid of Saturday delivery. It’s the type of congressional mandate that Postmaster General Patrick Donahoe has been complaining about in every dismal USPS quarterly financial disclosure.

    This week, the U.S. House Oversight and Government Reform Committee held a hearing titled Options to Bring the Postal Service Back From Insolvency. Donahoe was invited to give testimony at the hearing, during which he revealed just how bad the situation is for the USPS.

    “In the past two years, the Postal Service has recorded $21 billion in losses, including a default of $11.1 billion in payments to the United States Treasury,” said Donahoe. “The Postal Service has exhausted its borrowing authority and continues to contend with dangerously low liquidity. We are losing $25 million a day, and we are on an unsustainable path.”

    Donahoe went on to outline the usual points made by the USPS when addressing its financial situation. First class mail use has dropped 28% since 2007, and the Postmaster General complained that restrictive laws governing the Postal Service prevent it “from fully responding to these changes in consumer behavior.”

    Donahoe’s testimony was then countered by Fredric Rolando, the president of the National Associatio of Letter Carriers (NALC), the union that represents the USPS’ letter carriers. Rolando stated that the congress-mandated pre-funding of retiree health benefits is the major factor in the USPS’ insolvency.

  • Should The Post Office Keep Saturday Mail?

    There has been talk of the United States Postal Service ending Saturday mail delivery for years now. In recent months it appeared to be getting closer to reality.

    Do you want to see Saturday mail stay, or is it better off as a thing of the past? Let us know in the comments.

    Congress recently passed a resolution that the USPS claims gives it no choice but to backtrack on getting rid of Saturday mail. The new schedule (which would have seen packages continue to be delivered on Saturdays) was set to take effect in early August. Now it remains to be seen how long we’ll be able to enjoy Saturday mail.

    The USPS says the plan would have saved about $2 billion a year, and would help restore the USPS to financial stability as it continues to face obstacles of the era (digital and otherwise). At least the USPS (as far as we know) is still launching a clothing line.

    Rep. Darrell Issa has scheduled a hearing for next week to analyze the “motivations” for the move. He’s quoted by The Washington Times:

    “The Postal Service’s decision to first pursue modified Saturday delivery and then renege on its cost-cutting plan has seriously set back efforts to advance postal reform legislation,” said Rep. Darrell Issa, California Republican and chairman of the House Oversight and Government Reform Committee. “This hearing will allow us to review a wide variety of options to bring the troubled agency back from insolvency.”

    Rep. Blake Farenthold, who chairs the House subcommittee that oversees the USPS, disagrees with the approach the Post Office is taking now. Chron reports:

    Farenthold disagreed with the board’s assessment, saying that he thinks the language in place does not bar cutting Saturday deliveries.

    “Contrary to the Board of Governors’ decision, blaming a congressional mandate for preventing implementation of modified Saturday delivery, I believe that the modified 6-day delivery met all congressional requirements for moving forward,” Farenthold said in a hearing on Wednesday.

    Following is the USPS’s full statement:

    The Board of Governors of the United States Postal Service met April 9 and discussed the Continuing Resolution recently passed by Congress to fund government operations. By including restrictive language in the Continuing Resolution, Congress has prohibited implementation of a new national delivery schedule for mail and packages, which would consist of package delivery Monday through Saturday and mail delivery Monday through Friday, and which would have taken effect the week of Aug. 5, 2013.

    Although disappointed with this Congressional action, the Board will follow the law and has directed the Postal Service to delay implementation of its new delivery schedule until legislation is passed that provides the Postal Service with the authority to implement a financially appropriate and responsible delivery schedule. The Board believes that Congress has left it with no choice but to delay this implementation at this time. The Board also wants to ensure that customers of the Postal Service are not unduly burdened by ongoing uncertainties and are able to adjust their business plans accordingly.

    The Board continues to support the transition to a new national delivery schedule. Such a transition will generate approximately $2 billion in annual cost savings and is a necessary part of a larger five-year business plan to restore the Postal Service to long-term financial stability. According to numerous polls, this new delivery schedule is widely supported by the American public. Our new delivery schedule is also supported by the Administration and some members of Congress.

    To restore the Postal Service to long-term financial stability, the Postal Service requires the flexibility to reduce costs and generate new revenues to close an ever widening budgetary gap. It is not possible for the Postal Service to meet significant cost reduction goals without changing its delivery schedule – any rational analysis of our current financial condition and business options leads to this conclusion. Delaying responsible changes to the Postal Service business model only increases the potential that the Postal Service may become a burden to the American taxpayer, which is avoidable.

    Given these extreme circumstances and the worsening financial condition of the Postal Service, the Board has directed management to seek a reopening of negotiations with the postal unions and consultations with management associations to lower total workforce costs, and to take administrative actions necessary to reduce costs. The Board has also asked management to evaluate further options to increase revenue, including an exigent rate increase to raise revenues across current Postal Service product categories and products not currently covering their costs.

    The Board continues to support the Postal Service’s five-year business plan and the legislative goals identified in that plan, which will return the Postal Service to financial solvency. The Board additionally urges Congress to quickly pass comprehensive postal legislation, including provisions that would affirmatively provide the Postal Service with the ability to establish an appropriate national delivery schedule.

    Do you agree with the USPS? Should the post office keep Saturday mail? Tell us what you think.

  • USPS Clothing Line to be Sold Next Year

    USPS Clothing Line to be Sold Next Year

    The U.S. Postal Service (USPS) has announced a new partnership with Cleveland apparel manufacturer Wahconah Group. The companies will create the “Rain Heat & Snow” line of apparel and “accessory products.”

    The clothes will be designed around the unofficial USPS creed, “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.” The clothing will feature USPS branding and could include some sort of “smart apparel” electronic devices.

    “This agreement will put the Postal Service on the cutting edge of functional fashion,” said Steven Mills, USPS Corporate Licensing Manager. “The main focus will be to produce Rain Heat & Snow apparel and accessories using technology to create ‘smart apparel’ – also known as wearable electronics.”

    This announcement comes soon after the USPS announced a net loss of $1.3 billion during the first quarter of its 2013 fiscal year. As a result of that announcement, the company has planned to use a congressional loophole to end Saturday mail delivery on August 5. USPS estimates that cutting Saturday mail delivery could save as much as $2 billion each year. Though that may be enough to help the Postal Service limp through another year of declining First-Class Mail volume and government-mandated pre-funding of retiree health benefits, it seems that the company is now looking for outside-the-box solutions (such as fashion) to its money woes.

  • Postal Service Cuts Saturday Deliveries, But Who Will Be Most Affected?

    The USPS has been the topic of much debate over the past couple of years as it reviews its options now that the digital world has seemingly rendered mail service near-obsolete. Though widespread email use has all but eliminated the need to send letters and many people are going paperless in an effort to be green, a lot of people still rely on the post office to deliver bills–especially those who don’t want to give out their banking information online–and package delivery is always a concern.

    In an attempt to make things easier for its customers, the Postal Service has even introduced a new service for packages recently that includes giving the customer the ability to pay for and print their own shipping labels at home, then schedule a pick-up using one of the service’s flat-rate boxes. But the agency says it will continue to make packages a priority even as it prepares to end Saturday mail service, scheduled to begin this summer.

    Should the Postal Service end Saturday mail delivery? Let us know what you think in the comments.

    Packages will still get delivered six days a week, even if regular mail will not. The USPS has been battling Congress for several years now in an effort to get the measure approved, and many are wondering exactly how the agency–which is largely considered quasi-governmental and relies on Congressional approval for all measures–can get away with making the decision for five-day delivery itself.

    Apparently, Postmaster General Patrick R. Donahoe has found a loophole in the system involving the fiscal cliff impasse; even though every appropriations bill Congress has passed for the USPS in the past thirty years has included a six-day mail delivery mandate, they have yet to pass the bill for 2013, which is still operating under the “continuing resolution” the federal government is under due to the fiscal cliff. Unless Congress passes a bill mandating six-day delivery by March 27th–which Donahoe knows is extremely unlikely–the USPS is legally allowed to act on its own. The measure comes at a time when polling shows 70% of Americans support cutting Saturday delivery, especially if it saves the agency a projected $2 billion annually as promised. It would also negate the need to hike up stamp prices, an idea which garnered many protests when it was submitted to the public.

    “The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits,” Donahoe said in a statement. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”

    The USPS also acknowledges that this doesn’t mean it won’t need the help of Congress later on, as the agency is not taxpayer-funded. It wants the support of its customers when it comes to changing legislation in the future.

    “While the change in the delivery schedule announced today is one of the actions needed to restore the financial health of the Postal Service, legislative change is urgently needed to address matters outside the Postal Service’s control,” reads the statement. “The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue and encourages the 113th Congress to make postal reform legislation an urgent priority. The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.”

    But despite the growing support the country has shown for the decision, not everyone is happy about it; some companies are worried about the impact the move will have on their business. Those who rely on Saturday mail service to keep customers happy–such as Hallmark–say it could prove to be a bad choice for everyone involved.

    Hallmark released a statement about the news on its website:

    While we know this option was one of many the USPS has recommended in the past, the Postal Rate Commission believes the cost savings from this move would be less than the postal service estimates, especially if they continue to deliver parcels on Saturday.

    In addition, this move does nothing to address the underlying organizational and operational issues that have led to their current financial crisis.

    Hallmark continues to believe a reduction in service will not induce customer loyalty and will negatively impact small towns and small businesses that depend on timely, affordable, reliable mail delivery. This move should only be considered once all other cost-saving options are fully explored and acted upon.

    Time Warner is another company which could be affected by the loss of a delivery day, as they are the largest magazine publisher in the U.S. Blogger Chris Kotje predicts that magazine editors will be scrambling to meet deadlines in an effort to get their product to the customer in a shorter block of time…meaning increased labor costs.

    On the other side of the coin, we have delivery companies like UPS and FedEx, which may well profit from a 5-day delivery system. Even though the USPS is adamant that packages will still be delivered six days a week, there’s always the possibility that some customers might not understand or trust the new schedule and take their business elsewhere. Revenues for both UPS and FedEx are expected to jump up to 5% in the next year.

    Finally, there are those companies one would assume might be opposed to the changes but are surprisingly casual about the possibility of no weekend mail delivery. Netflix may have relied heavily on mail service to deliver DVDs and games to their customers in recent years, but they also have a growing streaming community which allows customers to pay a fixed amount each month for access to hundreds of titles right on their television or computer. That means a lessened dependence on snail mail.

    All in all, it will be interesting to see exactly what effects the move will have on these businesses and others when it goes into effect during the week of August 5th. And how long it will take the USPS to recover once it puts it into action?

    Is this the right move for the USPS? Let us know what you think.

  • USPS Loses $1.3 Billion, Plans to Cut Saturday Mail Delivery

    The U.S. Postal Service (USPS) today announced its first quarter financial results and things are not looking good. In the first three months of the 2013 fiscal year USPS had a net loss of $1.3 billion. The first quarter includes holiday season shipping and mail, which generally makes it USPS’ most lucrative quarter.

    The company cited shipping and package revenue growth and “increaced efficiency” as high points, but admitted that those revenues could not help offset continued declines in First-Class Mail volume and “costs that are beyond Postal Service management control.” USPS has been begging congress for Postal Service reform, but has not received it.

    As a result of its dismal finances, USPS will begin “accelerated cost-cutting actions,” which include eliminating Saturday mail delivery. USPS believes cutting Saturday delivery would save it $2 billion each year.

    “The encouraging results from our holiday mailing season cannot sustain us as we move deeper into the current fiscal year and face continuing financial challenges,” said Patrick Donahoe, U.S. postmaster general and CEO of USPS. “By moving forward with the accelerated cost-cutting actions directed by our Board of Governors, we will continue to become more efficient and come closer to achieving long-term financial stability. We urgently need Congress to do its part and pass legislation that allows us to better manage our costs and gives us the commercial flexibility needed to operate more like a business does. This will help ensure the future success of the Postal Service and the mailing industry it supports.”

    Though the Postal Service is mandated to provide six-day mail delivery, the fiscal cliff impasse in congress had the side effect of delaying the yearly appropriations bill containing the mandate. If a new mandate is not passed by March 27, USPS will legally be able to cut Saturday mail delivery. The new delivery schedule would then begin the week of August 5.

  • USPS Will Not Deliver iPads, Other Electronics Overseas After May 16th

    New regulations set to take effect on May 16th mean that the United States Postal Service will stop shipping iPads, Kindles, and any other devices that runs on Lithium batteries overseas, due to the risks those batteries pose to the aircraft the USPS uses to transport overseas shipments.

    Over the past few years there have been several reports of planes owned by shipping companies like UPS crashing when shipments of lithium batteries caught fire in the planes’ holds. Inside most forms of lithium battery is a pressurized canister holding a flammable liquid containing in which the lithium is suspended. During the pressure changes associated with air travel, sometimes these batteries can overheat and burst, causing a fire. In one of the most famous instances, a UPS 747 was en route from Dubai to Cologne, Germany with a large shipment of lithium batteries. During the flight the batteries caught fire. Despite efforts to turn around and return to Dubai, the plane ultimately crashed, killing both the pilot and co-pilot.

    In an effort to avoid such mishaps in the future, the USPS will stop accepting devices with lithium and lithium ion batteries for international shipment beginning next week. You can read the USPS’s new regulation’s here.

    The USPS provided Fast Company with a graphic showing some of the items that are can no longer be shipped. It’s a pretty long list, including power tools, video cameras, mobile phones, computers, and even electric shavers.

    USPS Lithium Battery Devices Banned

    Unfortunately, this means that shipments of such devices to, for example, soldiers stationed overseas, can no longer be handled by the USPS. Such shipments will now have to go through a private shipping service like UPS, FedEx, or DHL, all of which are considerably more expensive than the USPS.

  • eBay, USPS Innovate Shipping for Retailers

    eBay, USPS Innovate Shipping for Retailers

    eBay was recognized by the U.S. Postal Service for technology and financial innovation on Monday, after systematically developing a setup on its platform that allows sellers to bill and ship faster. Users of eBay, the world’s largest online marketplace, are able to calculate postage, purchase and print stamps, ship, track, etc., all within their online store.

    Patrick R. Donahoe, Postmaster General and Chief Executive Officer of the United States Postal Service, presented the online auctioneer with its Partnership for Progress award at the annual National Postal Forum. eBay received the award for financial and technology achievement, as their one-click systems have saved sellers time and money, with roughly 8 million shipping labels printed in 2004 alone – the year the USPS and eBay formed a partnership to offer users the comprehensive system. With this scheme, shipping rates have grown substantially in the last 8 years, which is good news for the USPS, which has struggled in the digital age.

    Jay Hanson, vice president of eBay Managed Marketplaces, who accepted the award, stated, “This is an example of eBay and USPS continuously improving the products, integration, and pricing for our customers. eBay’s innovations are immensely popular because they allow our customers to save considerable time and money, whether they’re an individual entrepreneur, a small business or a retailer. This ultimately means better and faster service for shoppers.”

    Donahoe went on to say, “eBay has been a true technology innovator, working with the USPS to help our customers save money while generating more than $800 million in postage last year alone. Our collaboration with eBay demonstrates the transformative power that technology can have for our industry.”

    While, The Partnership for Progress award was given for eBay’s general shipping technology enhancements over the years, eBay also launched its Fast ‘N Free program last October. The program highlights items that offer free shipping and fast delivery times. Through a broad system of data mining, eBay is able to identify items that could be delivered in under four days, based on seller location, seller rating and shipping history, and seasonality. Over 3 million items were sold through the Fast N’ Free program since its inception.

  • Can the Post Office Survive the Digital Age?

    In an article earlier this year, we asked, “Is email killing the post office?” Well, the post office is not dead yet, but it’s not helping from the looks of it. The U.S. Postal Service doesn’t have the money it needs to pay its bills, and email and the web are clearly major factors.

    Can the post office survive the digital age? Tell us what you think.

    A report from the New York Times is all but predicting the U.S. Postal Service’s demise. “The agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances,” the report says.

    “If Congress doesn’t act, we will default,” Postmaster General Patrick R. Donahoe is quoted as saying.

    Whew we discussed the subject before, Bloomberg BusinessWeek had put out a lengthy report looking at the decline of the USPS and its contributing factors. While touching on email, it looked more at comparison of USPS performance versus that of FedEx, UPS and DHL, as well as their international counterparts.

    Despite talk that social media might one day kill email, email has proven time and time again that it is still a vital part of the Internet. A report from Pew Internet recently found that email (along with search) is the top activity online adults engage in on the web – way more than social media (though that’s growing significantly).

    Pew Internet survey

    Unfortunately for the USPS, that conversation is irrelevant, because social media and email go hand in hand when it comes to less communication by “snail mail” – a phrase that the post office no doubt despises.

    One can only imagine how mobile has contributed to even more communication by web over mail. Now the Internet is in your pocket at all times, not to mention the phone – another classic non-mail form of communication. Last week, Nielsen put out a report finding that 40% of mobile users in the U.S. use smartphones.

    Of course email isn’t the only part of the web that is hurting the post office. Online bill pay is a big contributor as well – also now handily available from your pocket.

    It’s just easier, cheaper and more efficient to communicate digitally.

    Total mail volume decreased by 20% from 2006 to 2010, according to that Bloomberg report. The numbers can only be getting worse for the post office.

    There will always be packages, but the digital age certainly continues to leave its mark on those as well. Movies, music and books are all digital now. Earlier this year, Amazon announced that Kindle books were outselling print books. Tablet (namely iPad) sales are on fire. The USPS also has to compete with those other parcel services too.

    The Postal Service’s payment is due on September 30. From the sound of it, consumers wouldn’t likely feel the effects so much until early next year. At least the post office should remain open for the holidays.

    Is the USPS in serious trouble or is this just a temporary set-back? Let us know what you think in the comments.

  • Is Email Killing the Post Office?

    Is Email Killing the Post Office?

    Is email killing the post office? It’s not a new question. In fact, it’s been around nearly as long as the mainstream use of email itself, but it’s also not gone away, and the USPS has seen better days. I’m not normally one to buy too much into the typical x is killing y kind of hype, but the Postal Service is clearly severely injured.

    Do you think email is killing the post office, or at least contributing to its demise? Share your thoughts here.

    Bloomberg BusinessWeek has put out a lengthy report looking at the decline of the USPS and its contributing factors. While the seven-page pice just briefly touches upon the subject of email, comparing the performance of the USPS to that of FedEx, UPS, and DHL, as well as counterparts in other countries, there’s no question that email and online communication in general have done their fair share of damage.

    People have been using email for years now, and despite some predicting the death of email (at the hands of social media), it’s clear that it’s hear to stay for quite some time. Even if email were to die, it wouldn’t do much to help the postal service.

    As we’ve seen just in the past week alone, email is an incredibly important part of business for companies like Google, Microsoft, Yahoo, and Twitter. Even Facebook has its own email now, and social networks all still rely on email to keep users engaged – that goes for the professionals too (ie: the newly public LinkedIn).

    In a recent study, 45% said that their use of email at work will most likely increase in the next five years. 51% said that it would likely stay the same. Only 4% thought it would decrease. At home, 36% of those surveyed thought their email use will increase, 55% said it will stand pat and 6% said it will likely decrease.

    The majority of important online communication still takes place through email, whether that be B2B or B2C. C2C online communication may be trending more toward social media, but again, email still plays a role here, in terms of notifications, and there is still plenty of C2C communication through email. Even from heavy users of social media. Not everyone is on the same social network. That even goes for Facebook. Email is universal. You pretty much need an email address to have any kind of account online.

    The rise of mobile, and smartphones in particular, must also play a role, as it caters to increased use in email and social media, not to mention text messaging, and even….the phone call! The point is, communication is always as close as your pocket. It’s a lot easier and cheaper (at least on an individual interaction basis) than writing letters. And it’s in real time.

    “With the rise of e-mail and the decline of letters, mail volume is falling at a staggering rate, and the postal service’s survival plan isn’t reassuring,” Devin Leonard says in the Bloomberg BusinessWeek report, noting that the USPS is the country’s second-largest civilian employer after Walmart (with more post offices than the retail outlets of Walmart, Starbucks and McDonald’s combined). Last year its revenues were $67 billion, with even greater expenses, he says.

    According to the report, first-class mail, which the USPS gets the majority of its money from, has been steadily declining, and in 2005 fell below junk mail for the first time. Total mail volume has decreased 20% just from 2006 to 2010. The USPS hasn’t been able to cover its annual budget in three years.

    Well, there’s still packages right? Sure, but there’s also stiff competition from companies like FedEx, UPS, and DHL, along with an increase in digital goods replacing physical goods. Think movies, music, and books. Amazon, the largest retailer on the web, announced last week that Kindle books are outselling print books. Never mind that there are a bunch of free ones too.

    Plus, everybody’s going paperless these days. The Director of Physical Infrastructure at the U.S. Government Accountability Office is quoted as saying, “What happens when Bank of America or Citigroup says you are going to have to pay to get your statement on paper? That’s going to change a lot of behavior. It’s going to affect the postal service. That’s how they make most of their money.”

    The Bloomberg BusinessWeek report includes some interesting ideas on how the Postal Service could get back on track, at least to some extent, but the outlook is looking pretty bleak. You have to wonder what this will mean for the future of digital communication like email.

    Are email taxes on the horizon? Tell us what you think.

  • Amazon Against Post Office Ending Saturday Mail Delivery. Netflix Ok With it.

    As you may know, there is talk that the U.S. Postal Service could end mail delivery on Saturdays. Internet companies that ship items to consumers don’t all have the same opinion on this matter, as is evidenced by comments from Amazon and Netflix.

    Paul Misener, Amazon VP for Global Public Policy gave a testimony at a hearing in Washington on the future of the U.S. Postal Service (hat tip to Eric Engleman). Here are some notable quotes from that (the entire statement can be read here):

    United States Postal Service - Will it really end Saturday Delivery?"Amazon enjoys a strong and extensive relationship with the Postal Service. The USPS is an integral part of the service we provide our customers. Globally, we spent well over a billion dollars last year on outbound shipping – an increase of over 20% from 2008. In dollars, we spend nine figures annually on the USPS, with over two million shipments per average week via the Postal Service."

    …

    "Our customers have come to appreciate and expect Saturday delivery, and this is an instance where the USPS currently maintains a decided advantage over other carriers."

    …

    "We believe this is a bad idea. Not only would it be bad for parcel shippers, who would face higher costs to reach their urban and suburban customers on Saturday, it would be even worse for rural consumers and for the USPS itself."

    …

    "While they may be willing to wait until Monday or Tuesday for a bill they don’t really want; an advertisement they didn’t ask for; or a magazine to which they subscribed long ago; they expect the items they purchased this week to be delivered as soon as possible."

    Netflix takes a different view. "A well-functioning Postal Service, positioned over the long haul to meet changing customer and consumer demand, is more important than maintaining current delivery frequency," said Netflix chief service and DVD operations officer, Andrew Rendich, at that hearing. (via Bloomberg Businessweek)

    While Netflix certainly accounts for a great deal of mail deliveries around the country, its interests are quite different than those of Amazon’s, so the difference in opinion isn’t that hard to believe.

    For one, Netflix believes the future is in streaming when it comes to movies, and it would just as soon have customers using its streaming service more. In fact, the company is making deals with distributors to bolster their streaming catalog. Don’t be surprised if streaming becomes the main business model for the company in the future.

    At the same time, it is also in Netflix’s best interest for customers to rent a lower rate of DVDs by mail. This means less shipping costs for them while they get to charge the same amount to customers. Amazon on the other hand wants to get its products to customers as quickly as possible to keep them ordering more.

    What do you think about the idea of Saturday mail delivery coming to an end? Are you for it or against it? Discuss here.