Is the Postal Service Doomed?

If you ran a business with $25 billion in losses over the last five years, $20 billion in annual losses projected in the coming years, and 80 percent of its locations losing money, do you think that your company would stay afloat? Should it be rescued with a bailout from its customers? Or should it change its business model, eliminate expenses, and innovate to be competitive in the marketplace? These are the questions facing Congress as it considers what to do about the ever-struggling United States Postal Service (USPS).

The USPS is indeed at a crisis point. Barring an intervention from Congress by May 15, USPS plans to start closing as many as 3,700 post offices. Those numbers might sound jarring, but in reality the post office closures (not including the processing centers) only save $200 million under USPS’s estimates, and only 4,500 employees would be “affected” — though many of them would be reassigned rather than let go. It’s only a small part of what’s needed to save the USPS.

But even the small changes being proposed are kicking up a firestorm of opposition. Consider the post office in Hope, Minnesota. It sees about eight customers a day, requiring some seven minutes of service. The USPS wanted to close the facility and offer service to the 90 residents of Hope at the Ellendale post office, just 10 minutes away. Still, the closure was actively opposed, ending with an appeal to the Postal Regulatory Commission before the move was recently cleared.



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