A weak economy has accelerated the process of the U.S. Postal Service (USPS) becoming pretty much unnecessary due to technology and effective private options.
This is obviously bad news for the the USPS’s 656,000 employees. Yet it is also likely to be bad news for the U.S. taxpayer as well.
The writing is on the wall, but this institution is unlikely to go down without a fight given that it is the second largest employer in the U.S. after Walmart.
Thus each piece of bad news is a step closer to the unfortunate day when billions of taxpayer dollars could be spent protecting an army of postal employees from economic reality.
At the current rate, this could be pretty soon:
The Economist: Overall, many postal firms [globally] now expect total letter volumes to fall by 5-10% or more in 2009. America’s postal service saw a drop of almost 14%, or 28 billion items, in the year to September. Menno Sanderse, an analyst at Morgan Stanley in London, predicts that European postal services could lose half their mail volume over the next 10 years. In Europe, postal services also face the prospect of more competition, since from 2011 all remaining monopolies on delivering letters will end. Japan, ironically, is not suffering quite as much: volumes fell by only 2% last year.
The industry’s high fixed costs make profits vulnerable. In November 2008, badly battered by the recession, America’s post office announced its second successive annual loss, of $2.8 billion, and it expects to lose more this year.