The Dying Post Office

It seems to us the only possible salvation for  the Post Office is privatization.

The NY Times reports this morning the Post Office is on the verge of shutting down due to lack of cash required for a $5.5 billion payment, due September 30, to fund future health care expenditures for retirees.  In addition, in 2011 USPS is expected to lose over $9 billion, which would bring the five year losses to over $25 billion.

Conventional wisdom blames the Internet and email for the Post Office woes. Others blame unions and the high labor costs of the Post office, particularly relative to FedEx and UPS.

A recent article in the CT Post shows how Congress is also to blame.

The Post Office is attempting to close down two postal stations in Bridgeport. In fact, the Post Office wanted to shut both of these offices down two years ago. To the rescue is Jim Himes, pressuring the USPS to keep both open. Nothing unusual in this; most Congressman engage in this behavior. But when an organization can not respond to changes in the market, by adjusting its costs and product offering, it is almost certainly doomed. The only hope is extracting the Post Office from the grips of Congressional micro-management.

The Post Office doesn't have to die at the hands of email. UPS and FedEx both have thriving businesses, despite the growth of the Internet. The Post Office could as well, if the government would get out of the mail delivery business.