Is Mail Dying?

Here’s an article from the Post about some draconian measures the US Postal Service is planning to take to work its way out of a deep financial hole, including breaking labor agreements, cutting more than 100,000 jobs and withdrawing from federal health care programs.

But this passage jumped out at me …

During the past four years, the service lost $20 billion, including $8.5 billion in fiscal 2010. Over that period, mail volume dropped by 20 percent.

Those are big, big losses. And apparently accelerating ones. But look at that last statistics: mail volume dropped by 20 percent over the last four years. And while some substantial part of that is recession-related, it is hard to imagine that trend won’t accelerate.At some level, that’s hardly surprising. Every company is trying to wean people off paper bills and get them onto electronic billing. That saves them money and it’s unquestionably better for the environment. And when was the last time you sat down and wrote someone a letter?

Still, when you think about the centrality of the mail in our national existence, a 20% drop in four years sounds like a precipitous decline. I’m uncertain how ‘volume’ is defined here. I would assume by unit and not by literal volume. But it’s basically the same difference either way. This is a big historic, cultural shift. But it does make me wonder how viable the USPS as we now know it will be in the coming years. Big systems like a postal system can only survive with massive economies of scale. Without the bills and bulk mail and everything else keeping the whole system moving, sending your tiny little letter probably couldn’t be remotely cost-efficient.

At the same time, the digital revolution has — I would assume — at least kept up and possibly dramatically increased the number of packages sent through the postal service — the clothes you buy online, the stuff you buy from Amazon etc.

I’m sure there’s a literature about the transformation of the postal service as well as the other commercial shipping services that at least partially compete with it. If you’re familiar with this issue, please drop me a line. Let me know where I can find out more.

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