Starting in 2000, the growing popularity of e-mail and electronic bill payments sent mail volume plummeting. In just the past five years, the Postal Service's annual volume declined by 43.1 billion pieces, says Sue Brennan, a USPS spokeswoman. It is the main factor behind a $5.6 billion fall in annual revenues from 2006 to 2010.
Add to that the hefty personnel bills of the country's second-largest civilian employer after Wal-Mart – wages and benefits for its 571,566 full-time employees account for 80 percent of the Postal Service's operating budget, compared with 61 percent of UPS's and 43 percent of FedEx's – and it's clear why the Postal Service is nearly $15 billion in debt.
"Reduced mail volume, coupled with the burden of prefunding retiree health benefits, has created enormous financial pressures on this organization," says Ms. Brennan.
After determining that about 80 percent of its branches lose money, the Postal Service has proposed shuttering thousands of underperforming sites across the country. The closures are one of a number of tactics it is considering – including dropping Saturday delivery and cutting 120,000 jobs – to close its budget gap.
"Our customers' habits have changed. Our business model has changed. We've had to adjust," says Karen Mazurkiewicz, the USPS's Western New York communications coordinator. "This is one of many ways we're looking at to be efficient, be viable, keep costs down."
