Essay on Post Office

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The United States Postal Service employs over 574,000 workers and operates over 218,000 vehicles. It is the second-largest employer in the United States after Wal-Mart, and the operator of the largest vehicle fleet in the world. The USPS is legally obligated to serve all Americans, regardless of geography, at uniform price and quality. It is one of the few government agencies explicitly authorized by the United States Constitution.Recently, the rise of the Internet and the current economic slow down have caused a sharp decline in mail volume. This has put a strain on the Postal Service's finances.

Decline and Default

Without enactment of legislation by the end of this month, the Postal Service faces default. The USPS will have insufficient funds available to make a congressionally mandated $5.5 billion payment to pre-fund retiree health benefits. The payment is mandatory under the The Postal Accountability Enhancement Act, which requires USPS to fund pension benefits for the next 75 years by 2016.

The Postal Service is not broke. The Postal Service would have shown a net profit of $76 million in April had it not been for the $458 million charge for future retiree health benefits imposed by Congress.

However, the Postal Service still has a bleak future ahead.

The Boston Consulting Group
believes, “the U.S. Postal Service will experience profound declines in its volumes of mail and its net income over the next decade under its current business model, presenting a grave threat to its viability.”

The Postal Service, based on research done by the Boston Consulting Group , anticipates first-class mail declining at a rate of 4% over the next ten years, but mail volume overall declining at the more modest rate of 1.5% a year, with some types of mail actually increasing in volume.

Mail Volume, 2000 - 2020 [source: BCG report, March 2010]


Even though future decreases in mail volume seem modest, the Postal...
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