The Government Accountability Office (GAO) has found that the U.S. Postal Service (USPS) is in urgent need of restructuring and is moving too slowly to cut costs. The GAO also added the USPS to its high-risk list of federal areas in need of transformation.
The Postal Service’s problems may continue to worsen even after the recession ends. Both consumer and business customers are using traditional mail less in favor of e-mail and other means of communication.
Among the USPS’s woes:
o Mail volume last year fell by 9.5 billion pieces to 203 billion pieces and it is expected to fall to 175 billion pieces this year. The Postal Service anticipates mail volume will continue to remain flat or decline further during the next 5 years.
o The USPS is expected to post a $7 billion loss this year. It has outstanding debt of $10 billion and may have a cash shortfall this year of $1 billion.
o To meet payroll and other expenses this year, the USPS hopes to delay payments to its retiree healthcare fund. It also is closing post office locations, cutting jobs and freezing salaries. It also might reduce mail delivery to 5 days a week.
The GAO report also suggests the Postal Service explore opportunities to generate new forms of revenue.