Aug 18

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Where is the U.S. Postal Service Headed?

It is no surprise that the U.S. Postal Service has been struggling.  The drop in first-class mail as more people use the Internet and a decline in advertising mail because of the recent downturn in the economy are the leading factors contributing to the U.S. Postal Services downward spiral.  Last year, it is estimated that 50% of bills were paid using the Internet, up from 5% a decade ago.  In addition, more people are sending emails instead of letters to communicate for business correspondence and personal correspondence with friends, family, and loved ones.

The U.S. Postal Service suffered a $8.5 billion net loss for fiscal year 2010, compared to a $3.8 billion loss in fiscal year 2009.  Last quarter, the U.S. Postal Service reported a loss of $2.2 billion.  With these substantial losses, action needs to be taken.   Recently, Postmaster General Patrick Donahoe, released a “post office study” of nearly 3,700 potential closings of post offices.  Most of the locations under review are in rural areas.  Just because an office is under review, that does not mean it will be shut down.  In January, the U.S. Postal service indicated that it would review 1,400 offices.  As a result of this review, 280 have been closed and another 200 have undergone the review process and will remain open.

So what is the future of the U.S. Postal service?  “The Postal Service of the future will be smaller, leaner and more competitive and it will continue to drive commerce, serve communities and deliver value,” Donahoe said.  Options being floated around in order to assist the ailing U.S. Postal service are:

  • Reduce mail delivery to five-days-a-week
  • Move some post office locations into local businesses, town halls and/or community centers
  • Continue to further reduce staff and other costs.

About the author

Anand Khemlani

I am a founding member of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA), Accredited in Business Valuation (ABV), a Certified Fraud Examiner (CFE) and am a licensed Real Estate Broker. I regularly serve as an expert witness involving results of my forensic accounting assignments and damage analyses. My resume is available on Fulcrum's website

Permanent link to this article: http://betweenthenumbers.net/2011/08/where-is-the-u-s-postal-service-headed/

1 comment

  1. hotshot bald cop

    I just said that a number of days in the past!!!

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