Thursday, February 16, 2012

The rise of the internet and the Postal system financial woes

Whenever you walk into a post office you see assortment of people trying to mail stuff or buy stamps and there is usually a long line of people doing that, but behind all this fa├žade the postal system is in a deficit and bleeding money thanks to the Internet and other onerous requirements put by the U.S. Congress. Their demand is that if no relief comes to them then they would run out of money by October of 2012. They want flexibility in raising stamp prices, closing and consolidation of existing post offices, no more Saturday delivery and the unnecessary burden of pre funding retirement benefits. Although the rise of the internet has increased the post office business through mail order items sent by numerous internet companies but still it does not offset the fact that most of the people with internet connection have been paying their bills through the internet and also sending email instead of regular mail.

It was evitable that this was going to happen, but the resistance that the small towns are putting against the closure/consolidation of the post offices is making the Congress scramble for solutions to this big problem. I believe right now the post office should be allowed to raise rates on stamps, stop Saturday delivery and stop the pre funding of retirement benefits immediately. In this way at least the number of closure/consolidation of post offices will be less and if need be other measures should be put in place. I can understand the reluctance of Congress to do anything with this in a election year but hard choices have to be made in order for the post office to run efficiently and not rely on handouts or even a bailout from Congress.

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