Although somewhat lost in last week's deluge of layoffs and "stimulus calculus", the Postmaster General requested that Congress allow him to cut one day of mail delivery in the near future. All sentimentality aside, the US Postal service, which is also the nation's 3rd largest employer, swims in a troubled sea a red. Unfortunately, it's more like drowning, and the $7.9 billion lost since 2007 is just the tip of the iceberg. By 2016, the postal pension trust fund for every retiring letter carrier will be completely bankrupt. To replenish it will cost taxpayers at least $40 billion, and if Congress allows the Postal Service to borrow against what remains right now as a budget band-aid - well, the math could really get ugly.
Most market experts agree with what we at Triumphant Communications already know - Americans under the age of 40 read little or nothing sent to them in print and AARP cardholders aren't far behind. After all, my own mother who kept Hallmark in business for years, is now addicted to Evite.
Considering these new economic and cultural realities, why should we prop up an institution the Internet is rendering obsolete?
We don't personally hate the Post Office and just four years ago, about 40% of our company's own marketing business involved direct bulk mail. But the advent of new digital platforms and their explosive growth forced us to change our business model. We think the US government needs to do the same.
While lawmakers could endlessly debate how to better efficiency at the Postal Service, it won't solve the long-term problem because here is the hard truth:
- The cut in mail volume increases each year - in 2008, volume was down 4.5%
- Only 9% of mail is correspondence - letters, birthday cards, outgoing bills, etc. (Forbes.com)
- Households receive 7 times more mail than they send
- $320 million in local taxes are used each year to collect and recycle bulk mail
In other words, the Post Office has become the slowest, priciest, most eco-unfriendly, paper-based telemarketer in the world. And not by accident either. Congress and the Post Office together reworked the agency's business plan several years back to make cheaper bulk mail - er, I mean junk mail - the backbone of its long-term financial stability. This may have still made sense in 1999, but it's completely unrealistic in 2009.
And then there is the environmental impact of junk mail. According to the non-profit group 41pounds.org, a year's worth of new junk mail requires the destruction of 100 million trees and the use of 28 billion gallons of water. That equals the carbon footprint of 9 million cars.The Democrats in Congress whose campaigns are backed by the powerful postal unions do not dare mention reducing junk mail in their platform to slow global warming. And the Republicans who suggest privatizing the Postal Service fail to account for the possibility of massive job losses and the corresponding human toll from such a move.
However, the Internet is not about to crawl under a rock anytime soon, which means mail will continue its trek toward marginalization. The question is how to welcome progress while protecting the livelihood and retirement of thousands of postal workers.
We think President Obama has a historical opportunity to transform the US Postal Service into a carefully balanced model of organizational and mission-statement reform. Mail will continue and should continue in the near future, but cutting at least one day of delivery instantly provides money sorely needed to keep postal pensions solvent. A second day of reduced delivery could also enable the administration to try a variety of pilot programs that prepare the Postal Service for an inevitable reality come 2020 and beyond. One such option is transitioning younger postal employees into technology-based education programs for a 21st Century workforce. Mr. Obama spoke of this frequently during the campaign, and perhaps some of the .7% in the controversial stimulus now projected to band-aid 2009's postal operations could be a good place to start.
