Given the resources we invest in software and processing power, no one could accuse us of being technophobes. Still, it is a bit sad to see that the U.S. Postal Service is “nearing collapse.” For two centuries, the Postal Service has connected the country, including playing a vital role in transmitting financial information.
There has been a lot of speculation that the downfall of the Postal Service has been due to the rise of electronic communication. As Pew Internet reports, 90-100% of Americans ages 18-73 now use email. Increasingly, we turn to computers and smartphones—rather than pen and paper—for personal communications, paying bills and receiving financial statements.
But is the rise of the Internet entirely to blame for the Postal Service’s woes? After all, the agency’s fortunes are also tied to economic trends. For example, pre-recession mailboxes were stuffed with credit-card and subprime mortgage offers. As the flow of credit dried up, so did the steady stream of junk mail.
While we don’t measure the performance of the USPS, we do have an index that tracks its private-sector cousins. The Dow Jones U.S. Delivery Services Index includes components such as FedEx and UPS that deliver letters, packages and large cargo, and provide supply chain solutions for clients across the United States and globally. Over the past several years the index has mirrored the broader Dow Jones U.S. Index fairly consistently, seemingly reflecting the state of the economy. To quote Mark Zandi, chief economist at Moody’s Analytics, “Where there’s a lot of economic activity, when consumers are out buying things, they’re going to benefit from that, The better the economy, the more things move and that helps companies like UPS.”
Of course, there are key differences between the companies in our delivery-services index and the Postal Service. For example, the FedEx’s and UPS’s of the world have never been big players in transporting the types of thank-you notes, party invitations and utility bills that are most at threat of being replaced by email. In fact, the private-sector companies have likely profited from the Internet boom, as they are typically the providers of choice for the e-tailers that deliver shoppers’ packages to their doorsteps.
What’s more, many of these companies have a worldwide reach; thus they are benefiting from globalization that is reliant on intercontinental shipping capacity, and are sensitive to the waxes and wanes in emerging-market demand for an array of goods. Their more-diversified exposure to industrial and consumer sectors also helps to explain the sector’s close link to the broader U.S. market, as shown in the chart below.Will the delivery service sector benefit if the USPS cuts back on services? We may find out soon, as Saturday mail service could be dropped as early as 2013. In the meantime, if the thought of the demise of the Postal Service leaves you feeling sentimental, here’s an article from USA Today that reminisces about the “mail moments” of days past.
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USPS Woes: Economy or E-Conomy?, 2.0 out of 10 based on 1 rating
USPS closest competitors, UPS and FedEx, don’t threaten postal business; as two of their biggest customers, they help build it. UPS and FedEx pays USPS to deliver more than 400 million of their ground packages every year in residential areas and on Saturdays. In turn, the USPS contracts with UPS and FedEx for air transportation to take advantage of their comprehensive air networks.
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Charlene_Miale
Innovative management is necessary to utilize modern technologies available to the United States Postal Service. Integrating these technologies as part of downsizing a gorged operation; will only help sustain its longevity.
The USPS must view these technologies as mainstream, not as the the demon to their productivity demise!!! We all must change with the times. Research and deveopment; new technologies implemented, may prove beneficial, through diversification and regression analysis in the industry.
Industries must adapt to change and the USPS, is no exception.
Cutting Saturday deliveries is not the answer for long run sustainability over the United States largest employer, just second to Walmart.
Most Americans, utilize Saturdays to run errands that they cannot perform during the work week. Unavailability of USPS to its loyal public, will only generate new business elsewhere, futher hurting the USPS bottom line.
Perhaps they should look beyond the mailing industry sector. Given the range mass marketing, they need creative staff, if they are to survive this century, into the next. Wages are an issue. Why should it cost the taxpayer $30.00 an hour for a seasoned Mailhandler with tenure, to process a letter??? Are the taxpayers on board for this — while at the same time — told you will pay more to mail a letter or a package????
Rhetoric has it, the USPS, cannot meet its pension obligations to existing retirees. That Americans will hear withing the next 18 months out, about this grand delimma. If the USPS can deregulate? All American Union based craftshops; Corporation wide, are suspect to brand new rules, yet to be played out. Many have argued that the USPS pensions far outdraw the funds, to achieve sustaiability and maintain a Union Shop framework.
The taxpayer, is not anxious to invest into a redhole, each time we purchase a postage stamp. The writing is on the wall.
The USPS needs to diversify its operations into other areas in the mail sector industry, if it is to survive its global competitors.
USPS Woes: Economy or E-Conomy?
Given the resources we invest in software and processing power, no one could accuse us of being technophobes. Still, it is a bit sad to see that the U.S. Postal Service is “nearing collapse.” For two centuries, the Postal Service has connected the country, including playing a vital role in transmitting financial information.
There has been a lot of speculation that the downfall of the Postal Service has been due to the rise of electronic communication. As Pew Internet reports, 90-100% of Americans ages 18-73 now use email. Increasingly, we turn to computers and smartphones—rather than pen and paper—for personal communications, paying bills and receiving financial statements.
But is the rise of the Internet entirely to blame for the Postal Service’s woes? After all, the agency’s fortunes are also tied to economic trends. For example, pre-recession mailboxes were stuffed with credit-card and subprime mortgage offers. As the flow of credit dried up, so did the steady stream of junk mail.
While we don’t measure the performance of the USPS, we do have an index that tracks its private-sector cousins. The Dow Jones U.S. Delivery Services Index includes components such as FedEx and UPS that deliver letters, packages and large cargo, and provide supply chain solutions for clients across the United States and globally. Over the past several years the index has mirrored the broader Dow Jones U.S. Index fairly consistently, seemingly reflecting the state of the economy. To quote Mark Zandi, chief economist at Moody’s Analytics, “Where there’s a lot of economic activity, when consumers are out buying things, they’re going to benefit from that, The better the economy, the more things move and that helps companies like UPS.”
Of course, there are key differences between the companies in our delivery-services index and the Postal Service. For example, the FedEx’s and UPS’s of the world have never been big players in transporting the types of thank-you notes, party invitations and utility bills that are most at threat of being replaced by email. In fact, the private-sector companies have likely profited from the Internet boom, as they are typically the providers of choice for the e-tailers that deliver shoppers’ packages to their doorsteps.
What’s more, many of these companies have a worldwide reach; thus they are benefiting from globalization that is reliant on intercontinental shipping capacity, and are sensitive to the waxes and wanes in emerging-market demand for an array of goods. Their more-diversified exposure to industrial and consumer sectors also helps to explain the sector’s close link to the broader U.S. market, as shown in the chart below.
Will the delivery service sector benefit if the USPS cuts back on services? We may find out soon, as Saturday mail service could be dropped as early as 2013. In the meantime, if the thought of the demise of the Postal Service leaves you feeling sentimental, here’s an article from USA Today that reminisces about the “mail moments” of days past.
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