The Last Post Looms for the US Mail Service

Article excerpt

Founded before the Declaration of Independence, it's facing an uncertain future thanks to the recession and the rise of the internet Out of America

When did you last get an old fashioned letter? Not one of those tiresome newsletters-plus-family photo that increasingly pass for Christmas cards here (and which, maddeningly, won't even stand up on the mantelpiece) but a real letter, from a friend, relative or lover, with a stamp, a postmark and - unlike email - with privacy guaranteed?

The answer, probably, is not for a while. And if so, you will start to understand the desperate plight of the United States Postal Service, the largest mail system on earth, whose origin predates even the Declaration of Independence. Today, the USPS has 574,000 full-time workers, making it the country's second largest civilian employer after Walmart.

Unlike the vastly profitable retail chain, however, its business has been steadily contracting, by 20 per cent between 2006 and 2010. And unlike Walmart, it loses money by the truckload: $8.5bn (5.5bn) a year, $23m every day. The main culprit, needless to say, is the internet. Most painful has been the decline of first-class mail, the most lucrative part of its operations, but now largely superseded by email. The lost habit of letter writing is only part of the problem; once you paid utility bills with a cheque in a stamped envelope, another nice little earner for the postal service. Today ever more people do so online, for nothing.

Thus are the mighty fallen. The first US Postmaster General, appointed by the Second Continental Congress in 1775, was Benjamin Franklin, statesman, founding father and leading figure in the American Enlightenment, whose face adorns the $100 bill. Last autumn Patrick Donahoe, the 73rd person to hold the job and who began his career as a postal clerk in Pittsburgh, went before Congress to warn that without sweeping reform, the postal service faced default and might have to shut its doors within months.

The financial woes of the USPS do not stem solely from the explosion of the internet. Under existing law, and alone of government agencies, it must contribute out of its revenues some $5.5bn annually into a trust fund for future employee pensions, 75 years in advance. Late last year, Congress did allow that payment to be suspended. Nonetheless Mr Donahoe will have to take immediate and painful action of his own.

Over the last four years alone, the service has shed 110,000 jobs, saving $12bn. It no longer guarantees next-day delivery for first-class mail and is considering dispensing with Saturday deliveries entirely. There will be further large cuts in personnel, and for those who remain, pensions and other benefits will surely be reduced. Most controversial of all - and of which more in a moment - it may be forced to close almost 3,700 post offices across the country.

The United States Postal Service of course isn't the first, and won't be the last, grand old American institution to be brought low by our electronic age. …