USPS loses money despite customer growth
by Pauline Jelinek
Associated Press Writer
April 09, 2013 12:30 AM | 919 views | 3 3 comments | 3 3 recommendations | email to a friend | print
WASHINGTON — What business gets more customers every year, yet keeps losing money?

The U.S. Postal Service delivers mail to 11 million more homes, offices and other addresses than it did a decade ago, even as the amount of mail that people in the United States receive has dropped sharply.

That combination may be financially dicey, some analysts say.

“The more delivery points they have to service, the higher their costs” in fuel, time spent, etc., says Rick Geddes, associate professor in Cornell University’s department of policy analysis and management.

“But it doesn’t mean their revenue goes up — it doesn’t necessarily mean people are mailing more stuff,” he says.

Indeed, the volume of mail has decreased steadily as people stay in touch with email, Facebook and other electronic services more. Total mail volume handled by the financially shaky postal agency dropped to 160 billion pieces last year from its all-time high, 213.1 billion in 2006. Revenue fell to $65.2 billion last budget year from a high of $74.9 billion in 2008.

The cost of delivery is the agency’s largest fixed expense. It takes tens of billions of dollars a year and 300,000 people, or 60 percent of the agency’s workforce, to handle deliveries, says Postal Service spokeswoman Sue Brennan.

The service isn’t losing money on delivery, but adding addresses while losing volume is an issue, she says.

“In 2007, we could deliver 10 or 15 pieces of mail to a house and we were making a lot of money just because the volume was so high,” Brennan says.

Those times have ended, but the mail carrier is still required to go to every address, six days a week, whether taking 15 pieces there or one.

The number of new addresses had been rising by roughly 2 million almost every year since 1989, but was cut in half to 1 million or less annually during the recession and housing crisis this decade.

With the economy improving, the constant march upward in the number of places the postman has to travel is expected to accelerate.

The Commerce Department reported last week that spending on home construction rose in February to the highest level in more than four years and also was up for office construction and health care facilities.
Comments
(3)
Comments-icon Post a Comment
Be Careful
|
April 09, 2013
The article is slightly misleading.

While it does say that USPS revenue is "down", it doesn't give any indication as to whether the USPS is making or losing money.

Fact is, in 2011 the USPS LOST $5 BILLION. And in 2012 it got a lot worse.

They lost a staggering $15 BILLION.

I haven't mailed ANYTHING since I was in high school. And all my bills are electronic now.

I could remove the mailbox in front of my house and never know the difference.

I only check the mial once a week, the same day I put the trash out. I empty the mailbox and throw it straight into the trash can.
Mike in Smyrna
|
April 09, 2013
A customer is a person or organization that buys goods or services from a store or business. The delivery of mail does not make one customer. The current USPS is a 18th century buggy whip.
blame Facebook?
|
April 09, 2013
The Facebooks are the reason people don't mail letters? Really? How many letters did you mail prior to the Facebooks? Zero! THe Facebooks and cell phones combine to bring down land lions for sure. The problem with postal service is that people are being billed electronically and pay electronically for the electric, water & sewer, natural gas, garbage, but biggest of all, their credit cards. Hang in there, USPS. IT only takes once with the credit card companies slipping something in via e-mail before people go back to printed, on-paper, delivered-subject-to-mail-fraud-law communications with despicable entities such as banks and dentists.
*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides