US postal service nears insolvency

With the rise of e-mail and the decline of letters, mail volume is falling at a staggering rate, and the postal service’s survival plan isn’t reassuring. Elsewhere in the world, postal services are grappling with the same dilemma—only most of them, in humbling contrast, are thriving.

On Mar. 2, Postmaster General Patrick R. Donahoe warned Congress that his agency would default on $5.5 billion of health-care costs set aside for its future retirees scheduled for payment on Sept. 30 unless the government comes to the rescue.

Cost cutting proposals include reducing delivery days to five from six, moving post offices into supermarkets and other stores and staffing them with non-union workers, and reducing staff 20% by attrition. All of these are made more complicated by the post office not being allowed to close offices solely for economic reasons and not being able to lay off workers, which is forbidden by contract.

European countries have postal services that are not on the brink of insolvency. They closed most post offices long ago and relocated them in stores. Plus, they are moving aggressively to provide services like digital delivery. But the US Postal Service staggers along without having made much change and with union contracts and pensions it simply can not afford

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