United States Postal Service officials say things have gotten so bad it may be out of business by the end of the year.
Unless someone comes up with a better funding mechanism or the service becomes a private company, mail delivery will soon be a thing of the past, they said.
In a nutshell, the post office has become a victim of the internet – no one is writing letters anymore.
And that means of course that no one is buying stamps.
Email and Facebook messaging, both of which cost users not a penny, have become the go-to method for communicating these days.
That has translated into a drastic drop in revenue for the time-honored U.S. Postal Service.
The agency is also fighting a battle with parcel competitor Amazon.
Postmaster General David Steiner says the agency is running out of financial solutions and is now looking to Congress for help.
“I like to say that we got thrown overboard and into the water,” Steiner told a congressional subcommittee earlier this week. “But instead of tossing us a life jacket, we were thrown an anchor.”
The Postal Service has been losing money for years, including a reported $9 billion loss last year alone, according to WSB-TV in Atlanta.
Part of the challenge, officials say, is that USPS is required to deliver mail to every address in the country six days a week, even though about 71 percent of its delivery routes lose money.
At the same time, the agency is heavily regulated, with limits on how much it can charge, how it operates, and even how it manages retirement funding and borrowing.
“We don’t have options. We have mandates,” Steiner said.
Now, he says, the country is approaching a critical decision point – whether the Postal Service should continue operating as a government service or shift toward a more business-driven model.
“If you want the same number of delivery days and post offices, we can do that,” Steiner said. “But someone has to pay for it.”
Possible solutions on the table include reducing delivery days or raising prices, though no decisions have been made.
The general is considering increasing the price of first-class stamps from 78 cents up to 95 cents to help solve his financial problems.
Steiner’s bleak forecast comes amid a contract fight he’s having with Amazon.
The company, which has long been the mail service’s largest customer, reportedly aims to cut Postal Service volumes by at least two-thirds when its contract expires this fall.
“Our goal was to increase our volumes with USPS, not reduce them – until USPS abruptly walked away at the eleventh hour in December,” Amazon said, referring to contract-renewal negotiations.
The postmaster general claimed that Amazon “wouldn’t be what it is today” without the service.
Amazon last year passed the Postal Service as the largest domestic parcel carrier, increasing its take by 10 percent, while the Postal Service’s declined by 9 percent.
