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Posted 7/21/10 (Wed)

By Neal A. Shipman
Farmer Editor

The United States Postal Service has found itself in a very unenviable situation. It is hemorrhaging massive amounts of money and is projecting a loss of $238 billion over the next decade unless it makes some very dramatic changes. The changes that the Postal Service is looking at include closing post offices across the country and cutting mail delivery service to five days a week. And of course, raising prices.
But where in all of the hand wringing over all of the red ink has there been any significant talk by the U.S. Postal Service to cut back on the number of employees or to trim back on the benefits package that post office employees receive.
The Postal System is obviously feeling the impact of the poor economy, and more importantly, it is seeing the volume of mail that it handles plummet with more and more people choosing to use e-mail or other electronic forms of communication over the slow-moving mail system.
But there are many businesses that are struggling to keep their operations afloat during these difficult economic times. So how do private businesses cope with declining business associated with economic downturns?
First, they look at trimming any excessive expenses that their business may have. That may mean reducing, cutting back on employee benefits that they offer, and squeezing every last drop out of their supplies and materials.
And second, they do everything in their power to keep the customers that they have. That means going the extra mile to ensure quality service and happy customers, which just might mean being open more hours and more days. It means doing everything that you can to keep your business open.
But the U.S. Post Office isn’t your typical business. And their proposal now is to proceed forward with a two-cent hike in the cost of a first class stamp as well as hike mailing costs for newspapers and magazines. But the new postage increases don’t stop there. The new rates are going to impact churches and community organizations that use nonprofit mail. It will affect businesses that use the mail for communications and advertising. It will affect catalog companies that send packages in the mail. It will affect everyone.
A postal increase of an average of five percent at this time is a bad idea. And those rate increases will become effective on Jan. 2, 2011, unless the Postal Regulatory Commission stops them.
While there are those who may argue that since the increase isn’t all that big, the post office should be able to enact its rate increase. But there are many others who are much more in tune with the workings of the U.S. Postal System who say that the Postal System is in the midst of a death spiral brought on by its ‘raise the price and reduce the level of service’ mentality.
The U.S. Postal System is critically needed. But whether or not it is needed doesn’t matter if it continues to operate inefficiently and expects its customers to pay for its mismanagement. Ultimately, just like UPS and FedEx cut into the Postal System’s package delivery business, some other business will find a way to move all of the remaining mail that goes through the postal system. And they will do it cheaper and better than what we are currently getting from the U.S. Postal Service.
So before the U.S. Postal Service continues to plow headlong in its attempt to raise rates, it needs to be able to assure its customers that it is doing everything possible to reduce its runaway salary and benefits costs, and that it is not reducing service. To do anything otherwise, simply gives credence to those who claim that the Postal System is in a death spiral that no one can save it from.