Published on January 21st, 2010 | by John Ivanko10
US Postal Service: Delivering Sustainability?
While the U.S. Postal Service bleeds red with billions of dollars in financial loses ($3.8 billion in 2008), they keep earning environmental accolades for their green roofs and energy conserving initiatives. Today, some post offices are even LEED certified by the US Green Building Council. As I wrote about last week, the US Postal Service has always been on the leading edge with respect to experimenting with fuel efficient vehicles – even if they’ve been unsuccessful in garnering the widespread adoption of these alternatively fueled vehicles outside their test markets.
So what gives? How could the US Postal Service be in such dire straits with all their green initiatives and their “fleet of feet” making deliveries door-to-door on foot?
Failing to Adapt to Change
This shouldn’t be new news: For years, Americans have been moving away from hard copy to electronic forms of communication. Many of us have gotten fed up with the piles of unwanted mail solicitations and catalogs by the pound by getting our names and addresses on “Do Not Solicit” lists with the Direct Marketing Association. We’ve opted out of banks’ direct marketing schemes for credit cards and insurance. We’ve signed up for electronic bill pay. So, I would have thought that US Postmaster John Potter would have recognized these changes, having grown up with the US Postal Service and having been at the helm since 2001.
The Great Recession didn’t help. According to Postmaster Potter, the recession resulted in a drop of 30 billion pieces of mail from 2007 to 2009. Without the business mail and postal stamp purchases — the primary way in which the Postal Service generates revenue – losses were inevitable.
As if that wasn’t enough, the US Postal Service does have a backseat driver: the US Congress. While not receiving a cent from American taxpayer money (unlike GM or AIG), the US Postal Service is authorized and directed by laws enacted by the US Congress and signed into law by the President. A 2007 law passed forced the US Postal Service to pay between $5.4 and $5.6 billion/year in advance into their retiree health benefits trust fund. Before then, the Postal Service, like many other corporations, could show the pension financial obligations on their books, but not have to pay for them. Amazingly, this action was completely consistent with accrual accounting under GAAP (General Accepted Accounting Principles) rules. While many of the nation’s largest corporations continue to maintain their under-funded future retirement pension obligations, Congress forced the Postal Service to start playing catch up. This, of course, helped bloody the Postal Service’s bottom line further.
What the US Postal Service needs to recognize now goes beyond green roofs and electric delivery scooters. Climate change and rising energy prices forces the whole concept of mail delivery to be re-evaluated based on a priority of a very different sort than they’ve been accustomed to, largely universal mail delivery to over 149 million residences, businesses and Post Office Boxes, six days a week. “If you want to help the future of the mail service, mail more,” proclaims Postmaster Potter.
But the future of the US Postal Service must be defined by sustainability, not by sending more mail. Postmaster Potter is not paying attention to the environment, cultural changes (like use of email), and the reality that relying on the growth mantra will destroy this planet, one junk mail catalog and credit card offer at a time.
Don’t get me wrong. I love catching up with Sue at our Monroe Post Office and our convenient roadside delivery along our rural route. But times have changed. We must adapt to survive, unless the American people want to bail out the US Postal Service, too.
A Poor Sustainability Strategy: “Junk Mail” Keeps the Post Office Open
It’s a hard fact for an environmentalist to swallow: The US Postal Service is funded largely by business advertising, aka “junk mail.” They require an increasing amount of advertising and catalogs, not a reduction of them, to survive. In fact, compensation for some mail carriers are based on the volume of mail delivered. It’s akin to the way electric companies used to promote themselves by encouraging their customers to use (and waste) more electricity.
“[Third class junk mail] is not a word we use,” admits Postmaster Potter in an interview on NPR’s Diane Rehm Show. “It pays our bills. When you think about mail service to your door, it’s paid for by business. Ninety percent of the revenues that the postal serve generates comes from business. We get over $15 billion in revenues from advertising.”
Can the US Postal Service reinvent itself in a way that is not based on moving more mail around? Could it borrow inspiration from Apple, a company that transformed how we listen to and get music?
An End to Saturday Mail Delivery
Perhaps some perspective might help, especially related to the Postal Service’s financial quagmire. In 2000, the US Postal Service had 800,000 career employees plus over 100,000 part-time employees. By 2009, this had dropped to about 618,000 employees, cuts mostly made possible through attrition and retirement. With respect to their brick and mortar offices, in 1900, the then Post Office Department operated 77,000 post offices. By 1970, when the Post Office Department became the US Postal Service, only 37,000 existed. Today, there are 34,000 offices, but of those, over 2,000 of these serve less than 100 people and about 4,000 post offices serve less than 100 deliveries.
The time has come for leaner and greener US Postal Service: Deliver less with fewer employees, post offices and delivery days. When given the choice to raise the postage rate or cut Saturday delivery, a Rasmussen and Gallup poll revealed that about two-thirds of Americans would opt for one day less of mail delivery. This one action would have huge ecological impacts, from cutting transportation costs to reducing energy costs related to the operation of the 34,000 post offices.
Financially, the US Postal Service could save $3.5 billion annually by cutting Saturday delivery, according to Postmaster Potter. This change, however, would translate to a loss of about 40,000 career employees and an additional 45,000 to 50,000 non-career employees who work one day a week, according to Potter. Not exactly a pleasant thought with 10 percent unemployment; this fact may help Congress creep more slowly than usual on this option.
When Less might be Better
I remember one of the US Postal Service promotions for their new Star Wars commemorative stamp collection, an amazing life-size, stand-up cardboard cutout of C3PO placed in our small town post office. It was something any Star Wars collector would love to own (me included). Instead of auctioning them off after the promotion, I was told that they must be destroyed — an incredible waste of resources and lost opportunity for revenues. The strategy has always been to sell a few more stamps.
Now Postmaster Potter wants the US Postal Service to start looking into hawking insurance or providing banking services, all to build revenues in ways that don’t involve stamps. Sustainability, however, is not based on the never-ending growth and consumption of stamps. It’s about living better, with less. The US Postal Service is largely effective at moving mail around, but how might it get in on the revolution in communication taking place? Might the Postal Service really be in the communication business as Americans continue to redefine how we mail each other?
After all, the Forever Stamp really won’t last forever (it’s just made out of glue and some paper). Nothing in life ever does.
Photography: John D. Ivanko/www.ecopreneuring.biz