Thursday, December 15, 2011

Why is the US Postal Service in trouble?

The mainstream news can't seem to report enough about how the US Postal Service is falling apart.  The service is losing money each year, and can't seem to cut back fast enough.  Here's my thoughts on why.

The obvious:
Most individuals don't use the post office nearly as much they used to.  Instead of mailing letters, emails and text messages are much more practical.  Instead of sending money through the mail, online transfers and bill pay have become much more convenient.  Even direct mail and catalogs have largely moved to electronic delivery.  With much less letter volume going through the postal service, the cost of delivery per piece has increased exponentially.

The part that seems left out:
While the volume of letters being mailed has decreased significantly, more packages than ever are being delivered.  Online shopping has continued to grow steadily each year, resulting in a lot more package deliveries.  Unfortunately for the US Postal Service, most companies don't use them for package delivery, opting for competitors such as UPS and FedEx.

Which brings us to the real problem-  The USPS is delivering letters at a significant loss, while businesses are opting to use competitors for delivery of higher priced packages.

So instead of focusing on cutbacks, and decreasing the quality of service, why doesn't the USPS do what any other business would do, and try to determine why companies are opting to use services other than theirs?

Here's some thoughts: 
1. With all of the modern technology available, the USPS can't seem to figure out reliable package tracking, aside from its ridiculously expensive Express Mail service.  Delivery Confirmation does nothing to determine estimated delivery dates, or why a package has been delayed.  I've even had packages which were delivered, but not scanned by the postal agent, and therefore delivery was never confirmed.  Reliable package tracking is a must for businesses delivering to customers.
2. Again, aside from Express Mail, delivery times are not guaranteed.  I recently had a "Priority Mail 2-3 Day" delivery, sent just a few states away, take 5 business days to be delivered.  Again, because package tracking is not available, I had to sit back and simply hope the item would reach its destination eventually.  In the business world, this is unacceptable.
3. Let's not even get started with talk about the lines at the post office....

If the US Postal Service is to save itself, it needs to make some drastic changes.  And these changes shouldn't involve making the service slower or worse.

First, the cost of a first class letter needs to go up.  A lot.  Let's start the conversation at $1 for a 1st Class stamp.  With the move to electronic delivery, I send about 2 letters a month.  The increase of $1 a month to $2 a month isn't going to end me.  It will, however, provide a lot more cash to continue extremely convenient daily letter delivery.

Second, the quality of service of package delivery needs to improve.  A lot.  A reliable tracking mechanism for Priority Mail service needs to be implemented, and delivery times need to be consistently met.  If the USPS wants to compete with UPS and FedEx, the quality of service needs to improve greatly.

Right now, I ship packages about 50/50 between the USPS and its competitors.  Closing post offices and increasing delivery times will likely move my business 100% to UPS/FedEx.  The current proposals won't serve to save the post office, they will hasten its destruction.  It's time to get real about solutions, if our mail system is to survive.

Post your thoughts in the comments.