Sleet, Rain, Snow, No Problem! But Budget Shortfall?

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Postmaster General John Potter unveiled his vision earlier this week for the future of the cash-strapped U.S. Postal Service, and most reports of the plan have since focused on one unsettling prospect: Mail in America may soon be delivered only five days a week. (Most reports of the plan have also featured the headline “Postal Service delivers bad news.”)

Such a change, Potter suggested, would save about $3 billion a year against a shortfall the Postal Service projects, under current policies, would reach $238 billion over the next decade. But while no Saturday delivery sounds pretty radical, there was an even more fundamentally transformative idea embedded in the reams of supporting evidence and commissioned reports officials relied on in crafting the plan.

How can the Postal Service save itself? If it stops focusing on what it’s been doing for 235 years.

Delivering the mail, in other words, won’t be central to the success of the Postal Service of the future. On the one hand, this makes sense: People just don’t send and receive mail like they used to, rendering the Postal Service’s original mission increasingly irrelevant. Young people write e-mail, not letters. Utilities today post electronic bills instead of mailing them. You can now file your taxes, send out party invites and even pay a parking ticket all without buying a stamp.

As a result, mail volume that’s already been dwindling in the age of the Internet (and recession) is expected to fall another 37 percent by 2020.

So, as an alternative, would you consider looking to the Postal Service for your retail, banking, marketing or e-commerce needs?

THE IDEA LOBBY
Miller-McCune's Washington correspondent Emily Badger follows the ideas informing, explaining and influencing government, from the local think tank circuit to academic research that shapes D.C. policy from afar.

The Postal Service commissioned three reports to peer into its future. One, completed by the consulting firm Accenture, suggestively asks in its title, “Is Diversification The Answer to Mail Woes?” Diversification meaning: doing just about anything other than processing the mail.

As it turns out, plenty of less perilous posts around the world are already doing just that. According to the Accenture study, 63 percent of the revenue of international posts in 2008 came from something other than the mail. And non-mail operations accounted for 100 percent of postal growth internationally from 2003 to 2008.

Other postal services dabble in freight logistics and warehousing, processing licenses, selling phone cards, stationery and office products. Accenture arrays the possibilities among five categories: transportation, retail services, mail-related services (like digital mailbox management), emerging services (like telecommunications and e-commerce), and government services. Diversity isn’t that foreign — other countries have or have had postal banks as the U.S. itself did until 1967.

Granted, you probably have companies, stores or agencies that do each of things for you already. And, under “challenges,” Accenture concedes that moving to such a plan would require “deep alterations to the postal business model,” not to mention changes to the current prohibition against selling “non-postal” products.

But it’s not like the current model is working all that well in the 21st century. The report concludes that the USPS is in such bad shape relative to foreign posts precisely because it hasn’t gotten into any of these other activities. “The USPS is more exposed than the average international post to declining mail volumes,” it says, “and yet remains significantly more dependent on mail than any other post in the developed world.”

Imagine that: a postal service too dependent on mail.

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