Rain or snow? No problem, but revenue shortfalls cripple the Postal Service

Facing a $7 billion shortfall, the United States Postal Service (USPS) has explored numerous strategies for reducing costs. In addition to getting rid of many of its traditional blue collection boxes, it has looked into raising rates and cutting hours. The latest proposal is to close up to 700 underperforming post offices.

Given the choice between increased postage rates and post office closures, the vast majority of customers are in favor of closures. However, when it comes time to choose which ones to close, everyone wants to keep their own local post office.

As Connecticut postal patrons declare that their local post office is the heart of their community and Washington customers rally to buy their post office, it becomes clear that these outlets are more than handy places to buy stamps; in many ways, they represent their residents' main contact with their communities and their government.

Post offices, after all, are the most prominent -- and, in many communities, the only -- physical entity connecting towns to the federal government. This, incidentally, may go a long way toward explaining why many citizens are so dubious about government efficiency: after waiting in line for half an hour to face down a surly shipping clerk, it is all too easy to assume that the government is rude, poorly run, and unresponsive.

Whenever there are postal problems, the same refrain inevitably emerges. Some market capitalist -- in this case, Fortune -- pipes up with the clever suggestion that the postal service should privatize. On the surface, this makes sense: after all, UPS and Federal Express seem to be doing well, and it is a well-accepted truism that private industry is far better than the federal government at pretty much everything.

The thing is, when one compares UPS or Federal Express with the USPS, it becomes clear why a publicly funded post office is a necessity. The first issue is price: as anybody who has recently compared the U.S. Postal Service's Priority Mail shipping with UPS and FedEx can attest, the government's prices on most items are significantly lower. While this might not make a huge difference for some consumers, those of us who often ship packages vastly prefer paying less. If private shipping services didn't have to compete with the federal government, it is reasonable to expect that prices would go even higher, which would be devastating for many lower-income customers.

Additionally, for all its plodding bureaucratic incompetence, the USPS does, indeed, deliver. I've lived in many homes and, for one reason or another, UPS refused to deliver to half of them. While there have been times when I've had to go to a post office and wait in line for a package, this has been far preferable to UPS, which usually requires that I journey to a regional distribution center, which is inevitably located an hour or so from my house, to pick up my package.

While the internet and private industry have taken care of many of the USPS' services, it is worth noting that online commerce remains highly dependent upon a cheap, convenient mail system. After all, it doesn't matter how cheap a sweater is on eBay: if it costs a fortune to deliver, the potential savings evaporate. Many companies currently rely on the Post Office to keep prices low; if it was well-funded and more convenient, it seems likely that it would become even more popular.

The ultimate problem is that many consumers have yet to wrap their minds around the fact that the mail is not a business, and can't really be measured on the same yardstick as a McDonald's or a 7-11. It is a fundamental governmental service, a basic requirement for a modern, industrialized nation. Along with public schools, roads, and the military, it is something that citizens (justifiably) feel entitled to.

In this context, $7 billion is not much of a bailout, and there is little question that the USPS adds more value to the average American life than Goldman Sachs, Bank of America, or General Motors. Rather than quibble over closings and postage increases, it's time to get it together, recognize that some things are non-negotiable, and pick up the tab for the post office. While we're at it, in fact, maybe we should talk about how much it would cost to create a well-funded, efficient postal system that we can be really proud of.
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