USPS: The Future of Postal Service
Since December 2011, discussions have been made about different actions for the U.S. Postal Service to implement in order for the company to stay in business, provide service, and become financially stable again. Options of cutting its’ network of mail-processing centers in half have been in the mix. This will affect a substantial amount of employees who work in these centers. Businesses and citizens who rely on the postal service for communication and shipping will be affected as well. All the closures and job cuts are part of the USPS plan to cut $20 billion over the next three years to help the company stay financially stable. However, these cuts may even affect the future business of the U.S. Postal
…show more content…
Treasury.
The Rural Environment Many residents and small businesses rely on the postal service for communication and shipment. The post offices that are expected to close earn less than $27,500 in annual sales and nearly 90% of these offices are located in rural areas. These offices revenues are decreasing every year. About 2.9 million people live in rural areas where these post offices may close. These rural areas are where poverty rates are higher than the national average of 15.3%. Some of these rural residents do not have the internet to communicate due to the limited or unavailability of wired broadband Internet.
These residents rely on letters and packages. These closings mean they will have to drive longer to mail packages, buy stamps, or pay bills. Small businesses will be greatly affected; the closings will increase their costs due to the longer drive. Some people may have to drive as far as 17 to 40 miles to reach a post office to ship their products to their customers and to avoid the higher costs of using UPS and FedEx. Losing post offices may even prevent towns from recruiting new employers.
References http://www.federalnewsradio.com/?nid=537&sid=2759470 http://www.businessweek.com/news/2012-02-24/u-s-postal-service-to-cut-35-000-jobs-as-mail-plants-close.html
If I were the current CEO for the United States Postal Service, I would be gravely concerned about the future of my business, as it has recently taken a steep plummet from its success and popularity in the 19th and 20th centuries. The USPS is now faced with the decision to renovate itself due to the extreme loss of business as technology takes over the 21st Century. Some say that the USPS should be entirely reconstructed because the business is only headed further downhill, while others say that paper mail is still very practical, more so than e-mail, and we must each write more letters to do our part in reviving the business to profitability again. Because the USPS has been such a vital part of our country through
The availability of substitutes is medium mainly because there aren’t a large number of substitutes out there for express mail outside of the industry. Most next day deliveries are business documents, parcels, letters, ect, not typically cargo. So substitutes could include email and faxes, both are faster and cheaper than express mailing. Depending on the nature of the business, video conferencing or the old fashion telephone could be used. If the parcel is going somewhere local maybe could use bike messengers, or just hand deliver. There are also the second tier players, like RPS, DHL and TNT, while they are still in the delivery industry; they tend to specialize in areas other than express mail. With RPS, it is second day service at 40-50% less, and a business that does a large amount of overseas or international express shipments may want to substitute with DHL or TNT, who specialize and differentiate themselves in the international market.
b) Regular mail only cost 32 cents for letters. The post office is also very convenient. However, in regards to packages, the post office is very poor in quality service and efficiency (cannot track packages efficiently and has an on-time delivery record much worse than commercial carriers)
Postal Service is facing a major financial crisis and imminent collapse due to new technologies coupled with national economic struggles that have led to an incredible drop in mail and postage revenue (USPS receives no money from taxes). On top of these revenue drops, the Postal Service is burdened with unfair and difficult financial obligations that were imposed by Congress. This dangerous combination has sent the Postal Service into an economic downward spiral.
In July 2009, the Government Accountability Office (GAO) listed the budget of the United States Postal Service as “high risk” and recommended oversight from Congress and the Executive Branch. Specifically, the GAO stated that “Amid challenging economic conditions and a changing business environment, USPS is facing a deteriorating financial situation in which it does not expect to cover its expenses and financial obligations in fiscal years 2009 and 2010” (“Restructuring”, 2009, pg. 1). The GAO claimed that the mail volume in 2009 would likely decrease by about 28 billion as compared to 2008 and that the USPS would likely see declining volumes for the next five years (“Restructuring”, 2009, pg. 1). Clearly, the USPS is currently facing a
For over two centuries, people relied on the United States Postal Service (USPS) as a way to receive their letter and packages from people around the country. It is their only way where a person can obtain a parcel when there are no technologies to assist them. Nowadays, in the modern world, there are different kinds of ways where one can receive a package or a letter, from an email or other companies. This results in the USPS decreasing its values. In order for the USPS to keep up with the fast-paced society, it should consider changing their ways of working.
This accounts for the bureaucratic management of the USPS as represented by standardized procedures that guide the execution of most if not all processes with the organization. This being a strong culture, and according to Harvard Business Essentials, a strong culture is difficult to change without much effort, time, and substantial disruption (2005). The current Postmaster General (PMG) has been in place for the past nine years and has, according to Nocea of the New York Times, the PMG, Potter has had a very successful run (2009). He survived the anthrax crisis, overseen productivity gains and an increase in customer satisfaction (Nocea, 2009). During this time, he also eliminated a $11.3 billion
According to (SOURCE C), people are starting to migrate to the internet, and other cheaper mail options. As O’Keef says, they have experienced a 13 percent increase in mail volume in a fiscal year, more than any double previous decline, and lost 3.8 billion dollars. The USPS is anticipating even steeper drops in the years to come. According to (SOURCE E), the USPS is having a tough time, they are being battered by the high price of fuel. The USPS also takes a dig at our economy saying how it is responsible for their decrease in mail volume, calling the economy soft. The USPS is hit again in (SOURCE F), it states “not only are they losing revenue, they have been required to pay their own cost since 1970, which made a profit until 2006.” The decline in mail has caused major problems for the USPS, they delivered 17 percent fewer pieces in 2009 than in 2006, and lost $1.4 billion dollars. That money was borrowed from the U.S. Treasury. There is not that many alternatives for these issues, but there is one, that solution is in (SOURCE A), it simply states that they should not mess around with their delivery schedule. The USPS should be adding to their services, instead of subtracting from them. They dropped from a six-day service to a five-day service. As Richard Honack says- “to all
Due to the rising popularity of email and the easiness of scanning documents, less and less mail is being sent every year and because of competitors like FedEx and UPS the United States Postal Service (USPS) is having financial problems. All over the world there has been sweeping postal reform. New Zealand moved to three day mail delivery, Canada eliminated home delivery in cities, and the United Kingdom recently privatized their mail system. The United States Postal office has been losing money and reported a loss of $15.9 billion dollars in 2012. The USPS has been increasing stamp prices to make up for this financial loss, most recently increasing stamp prices from forty-four cents to forty-five. With congressing blocking the latest USPS
The United States Postal Service has existed for more than two centuries. As the people have grown into the new world of digital technology and electronic communication, the USPS continues to become more of a disservice to the American people. The USPS has still used the same rules and principles for more than two centuries, which does not intrigue any more customers. The USPS needs to be reconstructed in order to fit the needs of a changing world. As the world grows and develops into higher levels of thinking and technological advances, the USPS should grow with them, changing to become more useful to American people.
Royal Mail is the largest provider of postal services in the United Kingdom and one of the largest postal service providers in the world. This paper analyzes
Another growing idea is the privatization of USPS and the removal of its monopoly on mail delivery. It seems the ultimate goal of this would be alleviating the government’s hold on the Post Office altogether, therefore reduce any burden that it has. Perhaps it would also allow the Post Office to expand its services in order to meet the growing needs of consumers and adapt to the
The USPS is at a point where it does not have the financing available to maintain its operations. One reason for the annual net losses is due to the declining rate of first-class mail. The second reason has to do with the required prepayment of $5.5 billion per year toward retirees’ healthcare costs. In order for the USPS to overcome this deficit, they will need to consider their short time frame, government restrictions and labor union backfire in considering the best alternative. One alternative would be to privatize postal services operations which would allow the USPS to change its pricing structure, yet it would potentially significantly reduce market share. A second alternative would be to undergo a system-wide
The goal of The United States Postal Service is to create “a free flow of information between citizens and their governemnt as a cornerstone of freedom, often spoke of a nation bound together by a system of postal roads and post offices.” (Longley 2013) Postal offices are forbidden to open any letters unless it is undelieverbale. The United States Postal Service (USPS) is resposible for providing postal services for the United States to all Americans no matter the geographical location. The United States Postal Service is an independent agency of the United States federal government that was
USPS should consider shifting part of its mail volume to rail. By making this change it has been estimated that USPS could save at least $100 million per year. Additionally, “because of its lesser sensitivity to fuel price increases and greater control of its own infrastructure, rail transportation has major, long-term strategic advantages over highway” (Berman, 2012).