Unfortunately, postal delivery network costs have increased this past decade while mail volume and revenue have significantly declined. On average, carriers now deliver fewer pieces of mail daily to each delivery stop. Postal operations, and by extension, postal operating costs, should align with the demand for mail. As volume and customer preferences change, the Postal Service must adapt.
The network of postal delivery points will continue to expand, and mail volume will continue to decrease well into the future. This presents the Postal Service with a difficult choice: continue with business as usual, or pursue significant structural changes in response to the reality of much lower mail volumes.
There is no longer enough volume to generate the amount of revenue necessary to support the current six-day delivery system, and there won’t be enough volume in the future. The Postal Service business model is based on the assumption that mail volume and revenue will grow at least at the same pace as new delivery points. That is no longer happening.
Last year’s 25.6 billion piece mail volume drop brought total volume to 177 billion pieces, a level last seen in 1994, when there were 124 million delivery addresses, not the current 150 million.
A shift to five-day delivery would reduce expenses by adjusting the delivery network to accommodate reduced mail volume.
The Postal Service must have the flexibility to adapt quickly. These changes are permanent. No one anticipates renewed demand for hard-copy correspondence and remittances — particularly First-Class Mail — in the future.
