Chris Isidore wrote an article for CNN titled Postage is going up again. You should care, even if you don’t send mail.
« On Sunday [14 July 2024], the cost of a stamp is going up for the second time this year, jumping 5 cents for first class postage to 73 cents. »
« Most people don’t use mail the way they used to – if they send out mail at all. But the price of postage is a big deal to millions of businesses and organizations that spend most of the $40.8 billion a year spent on mail, including letters, bulk mailings, junk mail and periodicals. And higher prices are making them cut back – and hurting the budget of the US Postal Service and, potentially, its ability to continue its crucial services. »
« “We think they’ve overshot the mark on raising their rates,” said Michael Plunkett, CEO of the Association for Postal Commerce, which represents companies in the mailing and shipping industry. “These rate increases aren’t generating much additional revenue because it’s driving volume out of the system that is likely never to return.” »
« In its most recent year, the service delivered 11.4 billion individual letters. That may sound like a lot, but it’s down 75% from 20 years ago. »
« In contrast, online shopping has lifted package deliveries significantly. But the Postal Service doesn’t have the lock on that business that it does in its mail service, said Kevin Kosar, a senior fellow at the American Enterprise Institute. “Before the digital age hit, the Postal Service had a very valuable monopoly. Those days are gone,” he said. “The package business is going up, but that’s not a monopoly business for them. It’s very competitive.” »
« “By jacking the rates up, its efficiency and productivity go way down,” said Art Sackler, executive director of the Coalition for a 21st Century Postal Service, another trade group representing business that use the service. “Last year, by its own measure, its efficiency dropped by the most in 60 years.” »
« The Postal Service under current Postmaster General Louis DeJoy laid out a 10-year plan in 2021 to modernize the service and stem ongoing losses. Before, he told the Senate in April, the USPS had been in “financial death spiral” for years, but that under the $40 billion modernization plan, “we are making the changes necessary to ensure that we are around to serve the country well into the future.” But the plan, which includes restructuring its network of mail handling facilities, using more full-time staff, improving transportation and delivery methods and investing in technology, has not lived up to early promises. »
« The service had projected it would break even by its last fiscal year and post a $1.7 billion annual profit in the current fiscal year. Instead, it lost $6 billion last year and is forecast to lose another $6 billion or more in the current fiscal year, according to congressional testimony in April from Michael Kubayanda, chairman of the rate-setting Postal Regulatory Commission. »
Comment: With letter volume down 75%, an obvious survival strategy would be to cut letter delivery to three days a week. Carriers could deliver one route Monday, Wednesday, Friday and a second route Tuesday, Thursday, Saturday. This would cut last-mile labor costs drastically. Personnel could be reassigned to package service, where demand is stronger.
Articles of Interest 