Going Postal
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A few weeks back, the United States Postal Service declared an upcoming $10 billion loss and said it might need to lay off over 120,000 people. In an interview the president of the letter carrier association and number of other postal service officials discussed the reasons for the current situation. The following made me fall off my chair: “One of the reasons for our revenue decline is the Internet diversion.”
Excuse me? The so-called Internet diversion has been happening since 1994! Were all the USPS executives on vacation in Burma since then and are just getting back? How on earth could they fail to see the Internet, email, electronic signatures, billions of documents transmitted electronically, texting and Skype (for starters) as forces that might just make their slow land delivery of packages and junk mail obsolete? Not to mention the green movement, which makes us think twice before printing and mailing anything, and e-payments, which for many expenses such as utilities and credit cards takes away the need for mailing monthly checks. Who is running this show?
In an organization whose monthly budget is in the billions, were there any strategists who saw this wave coming and suggested trying to stay ahead of the curve. How about innovating with things like reliable online tracking like UPS? Sure, the Postal Service has come a long way in allowing customers to print postage online, for example. But when you are becoming obsolete, should you be hiring hundreds of thousands of people? With all due respect to the unemployed, keeping people in obsolete jobs is futile. Instead why do not we retrain our fellow citizens in jobs that can grow in the age of cloud computing, mobile computing and instant messaging?
Due to poor performance by executives and total lack of planning or congressional oversight, we are looking at massive, crippling layoffs or a government bailout. The constructive ideas? No Saturday delivery. Seriously? Or can we possibly utilize some of the over $50 billion in cash reserves that the USPS is sitting on to retrain the many hundreds of thousands who are going to lose their jobs?
This “Internet diversion” is massive and life changing. Just using the word “diversion” shows you how poorly USPS officials understand what they are up against. The Internet is not a temporary thing diverting mail from their offices. It’s the new reality. Leadership’s lack of insight, knowledge and planning is at fault. It’s an outrage. In the spirit of the Culture of Disruption, were there no employees who saw this wave coming and could have altered a leadership too complacent to craft new solutions for the changing world? Now it’s too late to ask those questions. We’re left cleaning up after the tornado.
Related articles
- No more mail? Ben Franklin is rolling over in his grave (capitolhillblue.com)
This post seems to center around a misunderstanding of terminology. After reading a few articles, it becomes pretty obvious from context that the term “Internet Diversion” is meant in the sense of traffic being diverted, not in the sense of an idle pastime or fad. Traffic is diverted from the USPS to the Internet just as cars are diverted around road construction.
The USPS is self-supporting: it doesn’t take a dime of taxpayer money and hasn’t in 25 years, and even now is running a net operational profit. According to the National Association of Letter Carriers, the financial crisis is caused not by mail being obsolete, but by a Congressional mandate that the USPS must pre-fund its future retiree benefits, something no private company and no other public agency does.
Meanwhile, the post office has been innovating. Yes, you heard me. I said “post office” and “innovating” in the same sentence. Did you know the USPS has an Engineering R&D Center filled with mechanical, electrical, and software engineers? Or that they were so far in front of technology that they installed high-speed optical character recognition into service — not R&D, but actually in real service — in 1965? Did you know that USPS is taking the lead in green operations with the largest fleet of alternative-fuel vehicles in the country, solar cells on buildings, and improving fuel efficiency using anything from eliminating left turns to delivering on bicycles, subways, and even mules?
The USPS has some unique capabilities and strengths, such as a ubiquitous distribution network and such a vast scale that sending a truck to every house every day is a fixed cost for them. They are playing to these strengths as would any business. For example, delivering the last mile for FedEx and UPS is their fastest-growing and most profitable business. As the National Association of Letter Carriers points out, “people pay their bills online, but they also order online, and those orders must be delivered.”
This is not a failure of innovation; it’s a failure of the health care system.
Sources for some of the above facts:
http://nalc.org/PostalFacts/06272011-truth_rolando_mcclatchy.html
http://www.savethepostoffice.com/spin-doctors-examine-post-office-financials-patient-goner
http://www.npr.org/templates/story/story.php?storyId=92858127
http://inventors.about.com/od/mstartinventions/a/PostalMechanization.htm
Blog Response for BBUS 525
The USPS is a basic necessity for the country to function. Even though the internet has taken away a big part of the USPS business base it is no substitute for the USPS. Yes I agree that the USPS can make some enhancements to the operation like UPS has but the core business remains the same. Unlike UPS and FedEx the USPS cannot take a day off. They cannot stop unprofitable routes and services.
I’m sure someone in USPS recognized what the internet would do their business base. But the USPS is designed to give everyone in the country no matter where they live a means of communication and unlike private companies they cannot reinvent themselves without an act of congress. They have a specific mission and they have to accomplish it.
What would you do if you had to send a package and no one would serve your unprofitable route?