The U.S. Postal Service has been on a cost-cutting mission since 2002, but it still ends up each fiscal year with a budget deficit. In 2008, the deficit was $2.8 billion. That may grow to $6 billion or more this year, since the federal Postal Service is no more immune to the current economic meltdown than businesses in the private sector.
Americans take their mail service for granted, and by and large they get decent service. But the agency has to adapt to hard new realities if it is to remain a viable service. To that end, Postmaster General John E. Potter has asked Congress to lift the rule requiring six-day mail delivery, to give the agency the flexibility to drop delivery one day a week to save money.
Proposing to reduce mail delivery by one day always stirs a debate. In the past, Saturday has most often been considered, although that is changing today. Five-day delivery would be a big step for the Postal Service. Nevertheless, Congress should oblige Potter and refrain from mandating the traditional six-day delivery in the agency's next appropriations bill. A reduction in mail delivery wouldn't come overnight, or perhaps at all. But the Postal Service has to do something to stay afloat, and it needs every tool that is available in order to succeed.
The agency is trying to adapt to the huge changes in how people communicate today. Fewer people use the U.S. mail to pay bills, stay in touch with family and friends or to send packages. You could say the Internet has severely undermined traditional mail delivery, as it has other private-sector industries.
The Postal Service already has cut costs by $1 billion a year since 2002 by reducing its work force by 120,000, putting a halt on new construction, freezing executives' salaries and reducing its headquarters' workforce by 15 percent. Despite these efforts more cost-cutting measures are needed, Potter said. Even if Congress drops the six-day delivery mandate, it won't go into effect real soon. The no-delivery day most being considered today is Tuesday, not Saturday. Tuesdays typically have lower mail volume than other days, according to the agency. The downside of ending Saturday delivery is that Americans would be without mail two days in a row.
Even if the agency shifts to five-day service, the budget hemorrhaging probably won't stop. One study shows the move could save $1.9 billion annually, while another suggested the savings could be $3.5 billion. Remember, the agency is facing a $6 billion-plus deficit in fiscal 2009.
Like its private-sector package-delivery rivals, the Postal Service has to figure out how to adapt successfully to the post-Internet world. A challenge that the agency can ill afford not to get right.