How the U.S. Postal Service can save itself
The debate over potential changes at the U.S. Postal Service is like a fight over the dessert bar on the Titanic. Raising first-class postage rates and eliminating Saturday delivery won’t matter much when the Postal Service hits the iceberg. And USPS will do just that, soon, unless there is a reimagining of its mission.
First, the broad question must be asked: Should the federal government continue to compete against the private sector? The U.S. Postal Service has been losing money for years, whereas competitors FedEx and UPS are thriving.
If the government is to remain in the delivery business, it must develop a workable plan for the digital age.
The Postal Service projects deficits of $238 billion — roughly the current gross domestic product of Portugal — through 2020. Raising rates slightly and reducing delivery would make tiny dents — and that’s the best possible outcome; in the worst, the changes would accelerate the service’s problems. Meanwhile, the debate obscures the fact that digital communications are fast eliminating the need for mail delivery.
To understand what could happen to the Postal Service, look at Kodak, whose 130-year history includes the kind of dominance that USPS long enjoyed. Even as the long-term threat from digital photography became clear in the 1990s, Kodak temporized. It tinkered with its traditional film, paper and chemicals businesses, never acknowledging that digital would all but eliminate them. Kodak continually predicted growth, even as it fell from being one of the most profitable companies in the world to one that’s essentially worthless.