The United States Postal Service Merry-Go-Round

Jim Hamilton
Nov 19, 2012

I wish I were drawing this instead of writing a blog because it would make a perfect cartoon or infographic. You saw the latest news from the United States Postal Service (USPS), right? They posted a $15.9 billion loss for their 2012 fiscal year. Sound familiar? They posted a $5.1 billion loss in 2011 and a $8.5 billion loss in 2010.

The image that it brings to mind is a merry-go-round because the same cycle happens over, and over, and over again. Here’s how it goes:

Step 1: The U.S. Postal Service posts a huge loss

Step 2: Politicians demand a solution!!!

Step 3: The U.S.P.S. suggests…

• Rate increases
• Production site consolidation
• Low-use and rural post office closings
• Elimination of Saturday delivery
• Employee benefit reductions
• Privatization of parts of the business (but not the massive ‘last mile’ infrastructure)

Step 4: No! Too Painful!!

Except for the occasional rate increase all possible solutions are thoroughly examined and rejected.

Step 5: Back to the Start…

Wasn’t that fun! How about another go-round?

We can only hope that a lame duck Congress will come to its senses and finally do something, since it is clear that the USPS needs to be more operationally-efficient (and of course they know that). The challenge is getting Congress and other key stakeholders to enable them to make these tough decisions. At the same time, there is a lot of innovation happening in the postal industry internationally. InfoTrends has been a strategic advisor to PostalVision 2020 over the past few years where speakers discussed having the postal service act as a platform for innovation in areas such as digital mailbox services, authentication and identification, patents, eCommerce, and parcel services. There is clearly a lot of room for innovation, but it can’t happen until the merry-go-round stops.

Matt Swain of InfoTrends has been very active in the area of digital mailbox services. You can find a number of recent blogs on that topic here. For more on his analysis and research, one of the best places to start is “The Emergence of Digital Mailbox Services: Moving Beyond Online Bill Consolidation in the U.S.“

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