"One of the few areas of federal activity was the establishment and operation of a postal system, and the Postmaster General was a very important federal official. This constitutionally-sanctioned, income-generating operation ought to be the federal government at its most efficient and most economical. Perhaps it is, but that only emphasized just how bloated and inefficient that the federal government has become that Postmaster General Patrick Donahoe has said that Saturday deliveries may soon end and that within 15 years there may be postal deliveries only three days a week.
He bases that projection on the $8.3 billion loss that the Postal Service operated at this year. “On September 30, 2011, I won’t be able to pay my bills. ... At some point, we’ll have to move to three days a week of mail delivery, possibly in 15 years.” Not surprisingly, one of the big ticket items that the Postal Service is grappling to pay is a $5.5 billion payment due September 30 to cover future retirees' health benefits. Ending Saturday deliveries, Donahoe said, would save $3.1 billion a year.
Predictably, the Postal Service cites email and other electronic communications as the big obstacles. But interestingly, the class of mail in which emails are in closest competition, the inexpensive and no frills standard mail, has been relatively stable in volume. During the mid-2000s this sort of mail actually peaked in volume, surpassing levels in the early part of the decade. The year 2007 was the high water mark, with 103.5 billion of these forms of mail delivered. The Post Office had to compete with the telegraph once, too. Businesses always have to compete with not only with each other but with change in the business environment.
This sort of explanation also does not explain why firms such as UPS and FedEx continue to be profitable operations. These companies have to drive much farther between deliveries because, unlike the Postal Service, private companies must respond to specific customer requests for delivery. These companies compete with email, just as successful private retail firms compete with Internet sales of goods. Technological information requires that private corporations continually update their business operations, and these companies do so profitably"...............READ MORE
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