Is Email Killing the Post Office?

Chris Crum05.29.2011Technology
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Is email killing the post office? It's not a new question. In fact, it's been around nearly
as long as the mainstream use of email itself, but it's also not gone away, and the USPS
has seen better days. I'm not normally one to buy too much into the typical x is killing y
kind of hype, but the Postal Service is clearly severely injured.
Do you think email is killing the post office, or at least contributing to its
demise? Share your thoughts here.
Bloomberg BusinessWeek has put out a lengthy report looking at the decline of the
USPS and its contributing factors. While the seven-page pice just briefly touches upon
the subject of email, comparing the performance of the USPS to that of FedEx, UPS,
and DHL, as well as counterparts in other countries, there's no question that email and
online communication in general have done their fair share of damage.
People have been using email for years now, and despite some predicting the death of
email (at the hands of social media), it's clear that it's hear to stay for quite some time.
Even if email were to die, it wouldn't do much to help the postal service.
As we've seen just in the past week alone, email is an incredibly important part of
business for companies like Google, Microsoft, Yahoo, and Twitter. Even Facebook has
its own email now, and social networks all still rely on email to keep users engaged that goes for the professionals too (ie: the newly public LinkedIn).
In a recent study, 45% said that their use of email at work will most likely increase in
the next five years. 51% said that it would likely stay the same. Only 4% thought it
would decrease. At home, 36% of those surveyed thought their email use will increase,
55% said it will stand pat and 6% said it will likely decrease.
The majority of important online communication still takes place through email,
whether that be B2B or B2C. C2C online communication may be trending more
toward social media, but again, email still plays a role here, in terms of notifications,
and there is still plenty of C2C communication through email. Even from heavy users
of social media. Not everyone is on the same social network. That even goes for
Facebook. Email is universal. You pretty much need an email address to have any kind
of account online.

The rise of mobile, and smartphones in particular, must also play a role, as it caters to
increased use in email and social media, not to mention text messaging, and even.the
phone call! The point is, communication is always as close as your pocket. It's a lot
easier and cheaper (at least on an individual interaction basis) than writing letters. And
it's in real time.
"With the rise of e-mail and the decline of letters, mail volume is falling at a staggering
rate, and the postal service's survival plan isn't reassuring," Devin Leonard says in the
Bloomberg BusinessWeek report, noting that the USPS is the country's second-largest
civilian employer after Walmart (with more post offices than the retail outlets of
Walmart, Starbucks and McDonald's combined). Last year its revenues were $67
billion, with even greater expenses, he says.
According to the report, first-class mail, which the USPS gets the majority of its money
from, has been steadily declining, and in 2005 fell below junk mail for the first time.
Total mail volume has decreased 20% just from 2006 to 2010. The USPS hasn't been
able to cover its annual budget in three years.
Well, there's still packages right? Sure, but there's also stiff competition from
companies like FedEx, UPS, and DHL, along with an increase in digital goods replacing
physical goods. Think movies, music, and books. Amazon, the largest retailer on the
web, announced last week that Kindle books are outselling print books. Never mind
that there are a bunch of free ones too.
Plus, everybody's going paperless these days. The Director of Physical Infrastructure
at the U.S. Government Accountability Office is quoted as saying, "What happens
when Bank of America or Citigroup says you are going to have to pay to get your
statement on paper? That's going to change a lot of behavior. It's going to affect the
postal service. That's how they make most of their money."
The Bloomberg BusinessWeek report includes some interesting ideas on how the
Postal Service could get back on track, at least to some extent, but the outlook is
looking pretty bleak. You have to wonder what this will mean for the future of digital
communication like email.
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E-mail Isnt Killing the Post Office

Revenues at the U.S. Post Office are doing just fine, thank you
By Mark Anderson
Posted 19 Apr 2012 | 13:55 GMT
True or false: The U.S. Postal Service is struggling financially because e-mail and
the Internet have rendered it obsolete.
False.
Yes, this independent agency of the federal government has reported losses
billion-dollar lossesin recent years. But technology is not the cause.
Rather, in 2006, then president George W. Bush signed into law the Postal
Accountability and Enhancement Act [PDF], which mandated that the USPS set
aside 75 years of health-care costs for its retired employees over the ensuing 10
years.
No other corporation or government agency that I know of has to prefund their
retirees health benefits [like this], says Philip Rubio, assistant professor in the
Department of History at North Carolina A&T State University, in Greensboro.
Were talking about postal workers who havent even been born yet.
Critics of the 2006 legislation say its a poison pill, forced on an agency that has
accommodated itself to change many times overfrom railroads and telegraphs
to airmail, AOL, and Amazon.com.
David Partenheimer, a spokesperson for the USPS, told IEEE Spectrum that the
agency has asked Congress to restructure the health-care prepayment system and
return the US $11 billion in overpayments it has already made to the Federal
Employees Retirement System. We receive no tax dollars for our operations, and
that is something we dont want to change, he says.

Illustration: Gavin Potenza

First-class and standard (bulk) mail are the USPSs two cash cows. Since 1997,
first-class mail has brought in a reliably steady US $33 billion to $38 billion per
year. If theres a Facebook or an e-mail effect, its a small net negative buried in

bigger numbers. Standard mails piece of the pie actually goes up from $12 billion
to $15 billion from 1997 to 2001 and from $17 billion to $20 billion from 2002 to
2007. Packages have brought in a comparatively paltry $1$2 billion annually
throughout.
Despite the fact that the backbone of the USPSs business remains strong, in
2007 the agencys annual losses go off the charts. By law it had to begin socking
away the health-care costs of its retired workers through the year 2081. The post
office is really the victim of an invented crisis, says Rubio. The Internet poses a
challenge. But it also poses opportunities and possibilities. The real problem is
the law Congress passed in 2006.