Post Office's accelerating "end-of-life" issues

After years of subsidies and protected monopoly power, things are getting uglier for the USPS.

From Alex Kingsbury in USN&WR...

The U.S. Postal Service is in serious financial trouble. Last year, it had a $2 billion deficit. This year, it is on track to lose $7 billion, and future predictions are equally dire as the economy, rising healthcare costs, and the shift to electronic communication take their toll on the bottom line.

The sea of red ink has lawmakers and postal officials struggling to find a way to keep the mail system operating while slashing unsustainably high costs. Job cuts are on the table, and hundreds of post offices will most likely be shuttered too. The postmaster general, meanwhile, is pushing to cut delivery from six to five days per week, a change that must be approved by Congress.

Mail volume has plunged more than 12 percent this year, meaning that the Postal Service handled some 20 billion fewer pieces of mail, the largest decline since the Great Depression. By 2010, volume is expected to fall by an additional 10 billion pieces, while the service’s debt could top $13 billion. At the same time, the service is dealing with healthcare and retirement costs that postal officials insist are debilitatingly high...