The United States Postal Service had a devastating end to the second quarter of 2014. In a report released by Reuters, the USPS posted a net loss of nearly $2 billion as lawmakers continue to bicker over offering financial relief and first-class mail service failed to pick up after a slow first quarter.
First-class mail service, which has historically been the most profitable product for the USPS, saw a volume decrease of 4.1%. This hefty decline is due in part to the ease and access of online bill pay. The agency, according to USPS Chief Financial Officer Joseph Corbett, is in a deep financial hole with liabilities exceeding current assets by over $20 billion.
There is good news, however, as the Post Office has seen a 7.3% increase in package volume as consumers rely more and more on e-commerce over brick and mortar shopping. The USPS has taken a hefty share of this particular market away from other carriers such as FedEx and UPS. Ironically, the federal carrier and several other private shipping providers have cooperative shipping agreements.
Will the post office survive?
Between 2006 and 2010, according to a Bloomberg report, U.S. Postal Service mail volume suffered a decrease of 20%. And, as instant communication continues to intertwine itself with people’s everyday lives, the forecast is potentially bleak for snail mail. Aside from letters and business correspondence, the United States Postal Service has taken a hit on magazine and book mailings also.
While it’s unlikely that the post office will park its trucks forever, there has been some chatter over the years of adapting to a modified delivery schedule. Many believe the post office would benefit from suspending Saturday deliveries altogether. Until that day, they will proudly chant their ages-old mantra of delivering in rain, and sleet, and gloom of night while trying to compete in the digital age.
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