The latest financial results for the U.S. Postal Service are in, and they’re a continuation of the same old story line: Tons of red ink and fingers pointing in every direction.
The USPS posted a net loss of $3.9 billion for FY 2009, “only” $1.1 billion worse than the previous year. And that’s even after receiving a $4 billion deferment on paying an annual $5.4 million obligation to pre-fund healthcare premiums for its retirees.
Not surprisingly, total postal revenues were down about 10% to ~$68 billion, not only because of the economic downturn but also because of the continuing shift to digital communications. Total physical mail volume declined ~13% to around 177 billion pieces.
Given the sorry financial stats, one would assume that the USPS would be moving forward in all haste with its plans to shutter as many as 10% of its post offices and branches around the country.
But if you thought that … you would be wrong. What started out as a potential closure listing of ~3,200 stations (the impressively named Station & Branch Optimization Initiative) quickly became ~700 stations and branches that were actually slated to close. Then that figure was trimmed to just over 400. And now we have word that the closure figure is down to ~370.
Given more time, the number of closures may well slip even further … and at some point the whole exercise becomes completely meaningless as cost-cutting endeavor.
And then there are the persistent rumors that mail delivery will be cut back to five days from six. But that never seems to be anything more than just an idle threat.
Welcome to the wonderful world of government agencies: Stultifying bureaucratic procedures that are near-Byzantine in their complexity, coupled with reacting to every conceivable interest group while being too timid to make any hard choices at all when it comes to managing their operations like any business in private industry must do.
Anyone for government-managed healthcare?
Nones Notes 
Several years ago I was talking with a businessman here in Nashville who knew then-Postmaster General Marvin Runyon, a Nashville resident who previously had managed the nearby Nissan plant in Smyrna.
Now this is second-hand, BUT… I was told that Runyon was giving up at the USPS because there was no way to deal with the postal union. Skyrocketing labor costs were an insurmountable problem. The union would not tolerate any real reform. Now, of course, we also have surging fuel costs and thus stamps so expensive we could trade them for hamburgers. Is it any wonder mail volume has nose-dived?
Say what you want about e-marketing. Only a few years ago direct mail was the lifeblood of subscription marketers and many retailers. I suspect It still would be today had postage not gone through the roof. A good mailing list and dazzling direct-response piece was always money in the bank. Sure, the internet was bound to shift the paradigm, and it has. But the post office still has a service many marketers want, but just can no longer afford. The USPS has simply shot itself in the foot.