April 12th, 2010
03:34 PM ET
5 years ago

Post office needs to cut deeper

New York (CNNMoney.com) – The U.S. Postal Service is laboring under an outdated business model and needs to cut salaries, close facilities and take other steps to to aggressively slash costs, the Government Accountability Office said Monday.

"USPS's business model is not viable due to USPS's inability to reduce costs sufficiently in response to continuing mail volume and revenue declines," the GAO said in a report. "Given its financial problems and outlook, USPS cannot support its current level of service and operations."

The GAO study was commissioned after the Post Office submitted a proposal to Congress last month to overhaul its business model that included, among other things, the elimination of Saturday mail service.

Over the last three years, the USPS has lost nearly $12 billion as mail volume plunged 17% due to the weak economy and the increasing popularity of electronic mail.

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Filed under: GAO • USPS
soundoff (17 Responses)
  1. What Now, Grasshopper?

    ...and in a few years we'll be seeing the same about the government healthcare programs. Just check Canada and the UK if you want to see the spoiler for how this all turns out. Anyone remember that Canada's PM just came to the US for his hospitalization? Hmmm, wonder why? Maybe the government isn't any good at running things?

    April 12, 2010 03:47 pm at 3:47 pm |
  2. Claudia, Houston, Tx

    The USPS is too top heavy which makes no sense with all the supervisors, managers, CEO's and their paid for expensive corporate housing and jetting around the world, it makes no sense. Technology is the 21st century and it's time Post office to stop the dumbing down of technology.

    April 12, 2010 03:50 pm at 3:50 pm |
  3. Gary

    The single issue that would help the post office's finicial problem is modification of their pension system. The employee pay is on the high side but is sustainable for hard working postal employees. The vehicle fleet as it is replaced could be made more fuel efficient to save costs. Stopping Saturday or additional holiday deliveries is reasonable. But the real issue is that if you allow postal employees to retire with pension after 30 years then an employee who starts working at age 20 can retire at age 50 and live to age 90...we just cannot support retirees for 40 years if they only worked for 30 years. We need a plan that doesn't allow any employee to collect a pension until they are 70 years old or possibly go completely to a 403K/IRA model for retirement. This would solve the postal problem.

    April 12, 2010 03:54 pm at 3:54 pm |
  4. Mike

    Wow, a government program with an outdated business model and a straight path to insolvency. Who are the geniuses thinking they can do health care better?

    April 12, 2010 03:55 pm at 3:55 pm |
  5. Surprised?

    But wait, this is a government run program. Isn't government supposed to solve the ills of us all. Social Security works though. Wait, no, it's about to be bankrupt. But Medicare works. Wait, no. It's already bankrupt and breaking doctors as we speak. Surely the newly passed government run healthcare will work. Seems to be government run programs are an utter failure. Well, there goes our Healthcare too. Better eat your apple a day to keep the doctors away – you won't have one to go to anyway

    April 12, 2010 03:56 pm at 3:56 pm |
  6. Rick McDaniel

    The PO has been loosing money for years on bulk mail, and making it up on first class.

    Perhaps someone should be recognizing that they need to charge what it really costs to deliver the bulk and junk mail, and then charge those customers accordingly.

    April 12, 2010 04:04 pm at 4:04 pm |
  7. www.usdebtclock.com

    Sell the post office to private bidders. We need 100% privatization of the USPS and Amtrak, immediately, and apply the proceeds to reduce the 12.8 trillion dollar national debt.

    April 12, 2010 04:11 pm at 4:11 pm |
  8. Chris - Denver

    No need for Saturday delivery.

    April 12, 2010 04:12 pm at 4:12 pm |
  9. Rob

    Wow the governement does an awesome job running the post office....man I cant wait to see how the ruin our healthcare!!

    April 12, 2010 04:18 pm at 4:18 pm |
  10. longarmss

    The only cut the post office need to do is STOP giving the big mailers the big discount to mail. Charge them all the .44 cent per letter like everyone else has to pay. When the big business got the discount. I didn't see any drop in the prices we are forced to pay for they stuff.

    Myself if I get anything that has less the .44 cents on it I make it "return for postage due." .44 cents ant. .38.6. now the post office has to handle that letter twice for the same price. One to try and deliver it to me and then again to return it back to the sender.

    If every one did this the post office would stop giving the big guys the discount and make them pay the full price and they the post office would have the money they need.

    April 12, 2010 04:18 pm at 4:18 pm |
  11. normajean

    I HATE to admit it, but realistically I can understand the USPS position. Now that everyone is communicating with their computers and all it's glorious advantages, we are sending a major part of our person to person and person to business by electronics not through the P O. I wonder if this won't hurt other businesses, like sending Christmas and Birthday Cards etc.?Never gave it thought.

    April 12, 2010 04:25 pm at 4:25 pm |
  12. MJ

    Anyone surprised? Government does not know how to run business nor should they be allowed. Just the beginning of the end. Now they are trying to run Health Care.

    "The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."

    – Cicero, 55 BC (Yes, this was said over 2,000 years ago)

    April 12, 2010 04:30 pm at 4:30 pm |
  13. Dar

    Yup, that good old goverment run business thrives like gold.
    Cant wait to see how bad they screw up health care.

    April 12, 2010 04:39 pm at 4:39 pm |
  14. Annie, Atlanta

    I don't understand. They have the infrastructure. Cut shipping prices to undercut and complete with Fed Ex and UPS. What's the holdup?

    April 12, 2010 04:51 pm at 4:51 pm |
  15. DMB

    The post offices typically have a huge facility next to major airports....why don't they transport & hold the luggage that airlines are going to lose by charging so much for luggage and carry on bags? They could charge $10-20 a bag from one airport to another.......and travelers would pick them up upon arrival. Just another way to generate revenue for the USPS ;^)

    April 12, 2010 04:55 pm at 4:55 pm |
  16. Obama the Liar

    put ALL government employees on social security and have them wait until mandatory age instead of their exhorbarent and early pension plans that drain the private workers.

    April 12, 2010 05:00 pm at 5:00 pm |
  17. vet in tx

    Every piece of junk mail you receive is revenue paid by the solicitors to the post office. For every person who took the paperless option for their bank statements and bills, is revenue lost by the post office.

    April 12, 2010 05:05 pm at 5:05 pm |