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Can the Post Office Survive the Digital Age?

Email and web contribute to serious financial troubles for the USPS

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Can the Post Office Survive the Digital Age?
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In an article earlier this year, we asked, “Is email killing the post office?” Well, the post office is not dead yet, but it’s not helping from the looks of it. The U.S. Postal Service doesn’t have the money it needs to pay its bills, and email and the web are clearly major factors.

Can the post office survive the digital age? Tell us what you think.

A report from the New York Times is all but predicting the U.S. Postal Service’s demise. “The agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances,” the report says.

“If Congress doesn’t act, we will default,” Postmaster General Patrick R. Donahoe is quoted as saying.

Whew we discussed the subject before, Bloomberg BusinessWeek had put out a lengthy report looking at the decline of the USPS and its contributing factors. While touching on email, it looked more at comparison of USPS performance versus that of FedEx, UPS and DHL, as well as their international counterparts.

Despite talk that social media might one day kill email, email has proven time and time again that it is still a vital part of the Internet. A report from Pew Internet recently found that email (along with search) is the top activity online adults engage in on the web – way more than social media (though that’s growing significantly).

Pew Internet survey

Unfortunately for the USPS, that conversation is irrelevant, because social media and email go hand in hand when it comes to less communication by “snail mail” – a phrase that the post office no doubt despises.

One can only imagine how mobile has contributed to even more communication by web over mail. Now the Internet is in your pocket at all times, not to mention the phone – another classic non-mail form of communication. Last week, Nielsen put out a report finding that 40% of mobile users in the U.S. use smartphones.

Of course email isn’t the only part of the web that is hurting the post office. Online bill pay is a big contributor as well – also now handily available from your pocket.

It’s just easier, cheaper and more efficient to communicate digitally.

Total mail volume decreased by 20% from 2006 to 2010, according to that Bloomberg report. The numbers can only be getting worse for the post office.

There will always be packages, but the digital age certainly continues to leave its mark on those as well. Movies, music and books are all digital now. Earlier this year, Amazon announced that Kindle books were outselling print books. Tablet (namely iPad) sales are on fire. The USPS also has to compete with those other parcel services too.

The Postal Service’s payment is due on September 30. From the sound of it, consumers wouldn’t likely feel the effects so much until early next year. At least the post office should remain open for the holidays.

Is the USPS in serious trouble or is this just a temporary set-back? Let us know what you think in the comments.

Can the Post Office Survive the Digital Age?
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  • kate

    I am an Australian. I have been waiting 5 WEEKS FOR 2 packages from America. I have already called and complained to them, there were not helpful.

    As a creditor, I have a right to be annoyed. If they’ve been running an unsuccessful business model, that’s the US GOVERNMENT’s problem. Other P.O. businesses are coping. Australia’s is still making big money. New Zealand looked at cutting delivery days because of waining profitability. The U.K.’s is not on the brink of disaster.

    In Australia, our P.O.’s sell uncompetitive priced office items, like pens, tape, printers, scanners, mobile phones. Apparently this is making money for them. I put this to an American who said it wouldn’t work in the US. In Australia, our postal costs ARE expensive. You do have to fly to get to rural places like Alice Springs, the Pilborough, bits of far north Queensland, and our prices are higher than the US. I know I get stung hard enough to post something to Australia from America, if the USPS thinks that it should charge the same from Florida to Alaska, Rhode Island to Hawaii, than from Connecticut to New York, then those big routes need to start subsidising the small or prices must be charged on distance. Territories of Australia are counted international for the sake of packages. While the US has 2 states not connected to the landmass, it has quite a few outlying territories and I’m not sure of how the US administers their mail services.

  • annonymous

    They Are Not Suffering From The Digital Age. Their Problem Is That They Are Still Living In The Past. The Fact Of The Matter Is Yes Less People Are Sending Letters To Friends And Family Through Snail Mail But That Was Only A Small Percentage Of The Mail Anyways. Infact The Digital Age Has Brought Them Tons More Business Since You Can’t Have Any Object Of Substance Delivered By E-Mail And The Digital Age Has Opened The Market on Buying Objects From All Corners Of The World. The Only True Competition Is Their Own Stupidity And Archaic Methods Of The Still Use To Send Mail Today. UPS Is Winning The Snail Mail Race Because It Offers Insurance (Up To $100) And Simple To Use(Every Move Updates) Tracking Information All For Free Where USPS You Have To Pay Extra For That And The USPS’s Tracking Number Are Anything But Informative(Only Telling People When The Package Has Been Picked Up And Delivered With Zero Information On Expected Delivery And Where It’s Currently At. In Short If They Want To Survive They Need To Get With The Times Offering Free Tracking On Every Single Package And/Or Letter And Offer A Decent Insurance For Free(I Mean Come On You Can’t Guarantee That Our Merchandise Is Safe In Your Hands) And It All Needs To Be Offered And A Competitive Rate To Their Competition Or They Will Be Phased Out.

    • brenda

      I agree. The post office is operating as if in the year 1980. USPS seems like it needs to be privatized in order to spiffy things up and get up to seed with new technology and operating more efficiently because what they are doing now is not working. well no, it is working alright…. working against them.

  • http://digitalproductsorderpoint.weebly.com Jesus Olvera

    Yes it does looks bad for the USPS. Their services are no longer much of a necessity as they once were. Remember the “elevator operators” and the “gas station attendants”? Their services were taken over by automation. In addition to automation, they do have some stiff competition in their packaging services. I believe that the USPS will have to downsize. It’s their only salvation if they are to continue in existence.

  • Alec Ward

    The US post looks to be in the same position as the UK post inasmuch that it is a state run enterprise trying to exist in an age gripped and manipulated by all things Friedland. I have no doubt that when it is finally ‘finished off’ it will, within a short period of time, be resurrected under private ownership who will ‘transform’ it into a ‘vibrant business reflecting the best of blah blah blah’. The reality is that your post office, like our’s, has been deliberately run down by various means to ensure that nothing which smacks of ‘socialism’ succeeds.

  • http://www.nua.ie Nuasoft Web Design

    I can’t see the post office closing down. It is a vital service and a lot of online sales are still sent through the post.

    The comment about it reappearing in private onwership would be a disaster because the private owners would only service profitable routes.

    Can you really see a private company delivering a letter to somebody living in the middle of nowhere for a few cents?

    • G. Barlow.

      Private enterprise is the only solution to the U.K.’ problems. Anything to do with the government and councils is guaranteed to waste money.
      Private P.O. can offer a collection service and/or delivery on specified days in a specific area.
      Imagination and profit oils industries’ wheel.

  • G. Barlow.

    No the Post Office can never survive applying its current policy.
    Recent investigation reveals that their counter scales are in-accurate and biased towards over-charging.
    Complaints to both the P.O. and the Office of Fair Trading have proved useless. The public are treated with contempt.
    FOC’s plan is privatisation with an offices in every hamlet, open six days a week, dawn to dusk.

  • http://www.mortgage-investments.com Norman

    All businesses come and go in cycles. The stagecoach was destroyed by the rail services about 100 years ago. The rail services were destroyed by private cars and airlines.
    The Pony Express rider by the telgraph and the telegraph by the phone and later the fax.
    So what makes anyone think that the Post Office will always be there?

  • http://my-gem.net James

    I don’t the United Postal Service is needed any more. Most of the time it’s junk mail that they send out anyways. I am so sick of getting it. Yes, everything is going digital and pretty soon we won’t need their services. Just a waste of government money.

  • http://matweller.com Mat Weller

    Since it’s constitutionally guaranteed, it will survive. However, if it’s going to be even remotely useful, it will require some drastic changes and leadership with a third-grader’s knowledge of business. The post office will always have the advantage of not needing to turn a profit to be a win. It doesn’t really even have to break even. It just has to not leak money like a bottomless bucket.

  • http://www.Playingcardsandmore.com Tommy

    I think the postal system’s problems stem from employee pay and benefits package, if they can get that portion of their expenses under control they could and should survive.

  • http://N/A jeff

    The problem is not email nor social media. Fed Ex has survived this competition of email/social media because they adjust to market changes more effiecently because they are focused on their bottom line profit. The Post Office is not. The Post office is bled dry by union workers and union pensions and benefits. They are so focused on the greviences and contracts of these employees that they don’t spend enough time focusing on their ledgers. It really irritates millions of Americans that see the Post office as a needed necessity, but feel it is no place for the Government to bail these guys out. Let the private sector run this and it will survive…

  • http://seowritingexpert.weebly.com SEOWritingExpert

    The days of the UPS is numbered when it comes to the traditional mail like letters etc. I receive most of my accounts electronically and it is also much easier to file, whilst the billing company save thousands on mailing cost. The only viable option for the UPS is to diversify and look for other complementary revenue streams.

  • http://freelancewritingnet.com FreelanceWritingJobsOnline

    The digital age is most definitely a serious challenge to the Post Office and it will need to almost re-invent itself to survive. How about expanding into banking and commercial services, or even selling more stationery?

  • http://www.antellus.com Theresa M. Moore

    While I do not rely on the USPS for sending letters, I do rely on it for special packages which must be in physical form and also to ship my products to customers. I would not mind not getting mail on Saturdays to make up for the difference if it would help the USPS get back on track. However, the cost to mail something has gone up enough that I am forced to consider using another service. USPS needs to re-examine its allocation budget to see where it can cut other costs. On the news the other day, I saw that the rural community of Hack, NC was used as an example of a post office about to be closed, and it did not help the USPS to see the mail carrier using an SUV to drive from mail box to mail box. Maybe if the USPS went back to the time-honore tradition of having its mail carriers walk they would cut back on the amount of gas consumed, and save money that way. Blaming the costs of labor does not cut it. Other companies and shippers don’t appear to have this problem.

    • http://www.norele.com Richard Hance

      Rural North Casrolina has hills and snow. The rural carrier could possibly go back to horseback, but that is way slow. Some routes in the universal delivery are miles a part. Want to pay the rural carrier to walk between boxes? I didn’t think so. The pay schedule for rural carriers in SUVs is the same as for rural carriers in subcompacts, so much a mile. The issue is whether the vechicle can lock the mail securely when the carrier is not in the vechicle, hold all the mail to be delivered, and travel the route in any weather.
      The demise of the Postal Service started when the USPS allowed other carriers to take unwanted package routes, at first in big cities. Don’t know if any of the readers remember when UPS first started and didn’t offer service to some addresses. The Postal Service lame management didn’t even try to keep that business.
      On the subject of pay, the UPS drivers are teamsters and get more per hour than a Postal Service letter carrier.
      My experience as a former letter carrier makes me reflect the problem with the Postal Service isn’t the workforce, it is the number crunching management types that don’t see it as a secure, universal service. They think man hours (and delayed delivery)verses quality of service in any weather to any address nationwide.
      The postal service is kinda like FEMA. No one likes it (USPS) until they need it. Maybe the Board of Governers of the Postal Service will wake up and require people skills in managers.

  • http://hockeyspirit.com Elizabeth Urlacher

    I’m not sure that it will, since I can certainly see that in our business we don’t buy stamps nearly as often as we did in the past. We email invoices, and most payments are made electronically.

    I fear though that if the postal service doesn’t survive that it will become significantly more expensive to send a few of the necessary every day items by way of private carriers. Or maybe it’ll actually just even out… private carriers will have more business and perhaps their rates and pricing will eventually come down to be more competitive.

    Times are definitely changing. We just had the last video store in our city close down. No more Block Buster, I think a little guy called Netflix had something to do with this.

  • kuppyus

    I think the US Post OFfice missed an opportunity and it shows how poorly they operate.

    The US Post Office is in the information delivery business and there is no reason they did not think about become an Internet Service Provider early in the game.

    How they never thought e-mail, online bill-pay, online greeting cards, online bank statements, online credit card statements, etc. would not impact on their business can only make one think they were led by people who kept their head in the sand.

    The handwriting has been on the wall for years, yet they have done nothing.

    Poor management and leadership.

    Management all deserves to be tossed out with NO PENSION. They failed miserably and should be punished accordingly.

  • Bill

    The USPS is top heavy with personnel. When other companies were trimming back their work force and striving to become more efficient, the USPS simply asked Congress for an increase in stamp prices.

    Instead of embracing the Internet (until the last few years), they pretty much ignored it and carried on, business as usual. The problem is, with each increase in stamp prices, they drove more customers away and to the Internet.

    There are postal services in other developed countries that are running profitably – so there are examples to be followed. They need to hunker down, trim the fat and get serious.

    I rarely go into the Post Office these days, but when I do, I can count on standing in a line, with only one or two stations open, while being able to hear and see personnel sitting around, being totally unproductive in the back room.

    Any business I have been associated with, took care of the customer first, then worked breaks into the flow of the day. Not the PO. There can be 20 people in line, and when it’s time to take a break, well, it’s time to take a break!

    The USPS is just another example of how the Unions have outlived their usefulness, and driven costs labor costs and benies to unsustainable levels. I’m not anti-union per se, but they need to open their eyes to reality. They have priced themselves right out of a job.

    They have talked about eliminating Saturday postal service. We could adjust to that. We rarely receive anything but “junk” mail on Saturdays, anyway.

    The bottom line is, they are in this position because nobody wanted to make the tough decisions necessary to make the business profitable. And they’re still not – they’re turning to Congress to solve their problem for them. Management, leadership – it’s more than just a title!

  • Vivek

    Hi All,

    It is wrong to say that the advent of Internet Technologies such as EMail and Messaging services replaces Postal Services.

    In fact it is the other way around. Today’s Information technology can
    be a valuable asset for Postal Services. For example, one can send message from Electronic Media instead of writing on a post card and sending it. The final Postal message can be delivered at the other end which involves both manual and electronic usage in a quick and efficient way.

    With Regards,
    Vivek

  • http://www.mosaicbooks.org Norman

    I can’t speak for the US Postal services, but as an online seller of books, I can certainly say that the sheer costs involved in selling hardback books through the post (our books are quite heavy e.g. Vintage Advertising Old Automobiles is 3kgs in weight) has been a major factor in our reviewing our Marketing for 2012 and introducing our titles as eBooks.
    Whether the French rates are more exorbitant than other countries I don’t know, but we also have a bizarre situation that if our books were written in French, and supported ‘French Culture’ this particular tome would cost only €7.00 to send worldwide, whilst although it does feature a lot of French posters for example, the book is in English, and therefore cost us close to €40.00 to send to the USA.
    It’s these examples of massive over-pricing, and selective as well, that are certainly affecting our business decisions. Either way, we will be spending less with the postal authorities in the future.