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U.S. Postal Service facing insolvency due to new technologies
JS_Harris

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3961688 posted 12:11 pm on Jul 29, 2009 (gmt 0)

Mail use has been changing over the past decade as businesses and consumers have moved to electronic communication and payment alternatives. Mail volume decline has accelerated with the recession, particularly among major users in the advertising, financial, and housing sectors. Mail volume has typically returned after recessions (see figure), but USPS’s 5-year forecast suggests that much of the recent volume decline will not return.

[gao.gov...]

The GAO government site released a pdf format report with some startling graphs. The post office is in the same boat as newspaper publishers thanks to what is being called "new technologies", better known as email, cell phones and instant messaging.

 

JS_Harris

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3961688 posted 12:16 pm on Jul 29, 2009 (gmt 0)

This may not be surprising to most who are technology aware but how extreme the recent decline is might surprise you, the graph is worth a look.

I agree with one of the suggestions in particular, reducing the number of delivery days from 6 to 5. It works in Canada fairly well.

Digmen1

5+ Year Member



 
Msg#: 3961688 posted 6:11 pm on Jul 29, 2009 (gmt 0)

I think we are having the same problem here in New Zealand.
New Technologies - people are spending lots of time and money on them, so there is only a limited amount of time and money people have so Old Technologies must suffer.

bill

WebmasterWorld Administrator bill us a WebmasterWorld Top Contributor of All Time 10+ Year Member Best Post Of The Month



 
Msg#: 3961688 posted 4:48 am on Jul 30, 2009 (gmt 0)

Japan's postal service have been feeling the pressure as well. They have a tradition of sending out New Year's postcards which has dramatically declined over the years. It hasn't disappeared, but the number of people who have forsworn the dead-tree medium and gone to digital has been very noticeable.

Lexur

5+ Year Member



 
Msg#: 3961688 posted 6:14 am on Jul 30, 2009 (gmt 0)

...the dead-tree medium

Great!

On a few years public postal services will need public funds and Governments will give them because is necessary to have a system to delivery postcards/mail/packets anywhere into the country.

In the big towns this service will be probably assumed by private companies but the mail network will survive in the whole country.

LifeinAsia

WebmasterWorld Administrator lifeinasia us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 3961688 posted 3:47 pm on Jul 30, 2009 (gmt 0)

Bring back the Pony Express! It was certainly Greener. And not that much slower... :)

signor_john



 
Msg#: 3961688 posted 4:29 pm on Jul 30, 2009 (gmt 0)

In the U.S., Netflix may be the Postal Service's savior (at least until streaming video replaces DVDs).

pageoneresults

WebmasterWorld Senior Member pageoneresults us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3961688 posted 5:43 pm on Jul 30, 2009 (gmt 0)

The USPS is a facilitator of waste. I've worked in direct mail advertising for almost 20 years and I see the volume of paper and ink being used for USPS snail mail promotions. It's time for them to wake up and get with the program. That chart is surely an eye opener and my personal opinion is that they won't be able to recover, not for quite some time. They have a lot of catching up to do first.

I don't like the USPS. Sure, it has been the reason for my bread and butter for many years but, I'm retired from that industry now and towards the last 5 years, I assisted many clients in changing their internal methods to reduce paper and ink. I'm happy to know that I had some impact on that chart shown above.

It's only a matter of time before they become deprecated using their current business model. There's going to be a lot of people going postal in the upcoming year. :(

incrediBILL

WebmasterWorld Administrator incredibill us a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month



 
Msg#: 3961688 posted 6:21 pm on Jul 30, 2009 (gmt 0)

Keep in mind a ton of the junk peddled by the post office has been:

- Catalogs replaced by online stores
- Rash of mortgage junk mail now gone
- Rash of credit card junk mail now gone

Their mainstay has always been monthly billings, statements and payments.

Now with a vast majority of us using online banking, online bill pay and online notifications all those monthly statements and paper waste are also history.

Let's face it, a leaner meaner company like UPS or FedEx will mostly likely end up replacing the post office or the post office will have to get fiercely competitive with those companies and possibly put them out of business in order to survive.

Anything is possible but privatization is the cheapest route for taxpayers either way it goes.

physics

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3961688 posted 7:08 pm on Jul 30, 2009 (gmt 0)


The GAO government site released a pdf format report with some startling graphs

Am I the only one who sees the irony in this ;)

Digmen1

5+ Year Member



 
Msg#: 3961688 posted 7:26 pm on Jul 30, 2009 (gmt 0)

The GAO government site released a pdf format report with some startling graphs

Am I the only one who sees the irony in this ;)

He he, so you wanted them to post us all a copy of this document in the mail.

koan

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3961688 posted 8:37 pm on Jul 30, 2009 (gmt 0)

Seems the sudden decline in the chart has more to do with the 2008-2009 recession than some longer term trend. Email has been mainstream for about 10 years now, and all of a sudden it drops dramatically in October 2008?

incrediBILL

WebmasterWorld Administrator incredibill us a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month



 
Msg#: 3961688 posted 10:13 pm on Jul 30, 2009 (gmt 0)

Email has been mainstream for about 10 years now

But adoption of online bill pay and notification has been much slower.

People didn't trust it, but they finally got used to it.

Therefore, just because you have had email all of these years doesn't mean it's being used to it's fullest extent.

Even technology like Kindle will take a bite out of the mail with magazines and papers like the WSJ being delivered electronically.

Basically, I believe dead tree media will cease to be processed by the US Mail within the next 5 years as more companies looking to cut costs will force the remaining customers getting paper statements to switch to electronic leaving them competing solely on package delivery with UPS and FedEx.

Digmen1

5+ Year Member



 
Msg#: 3961688 posted 10:39 pm on Jul 30, 2009 (gmt 0)

Yes you are right incredibill, its only been in the last few years that main stream people have cottoned on to online banking and bill paying.

GaryK

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3961688 posted 12:26 am on Jul 31, 2009 (gmt 0)

will force the remaining customers getting paper statements to switch to electronic

Won't this make it a requirement that everyone own a computer and have an Internet connection? Seems unreasonable and unrealistic to me.

incrediBILL

WebmasterWorld Administrator incredibill us a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month



 
Msg#: 3961688 posted 12:51 am on Jul 31, 2009 (gmt 0)

Won't this make it a requirement that everyone own a computer and have an Internet connection? Seems unreasonable and unrealistic to me.

Nope.

I think you'll see kiosks at the bank, more powerful ATMs or even people using computers at the local library.

Where it'll actually become a problem is that fringe element of society that doesn't even have a bank account or credit card which makes online bill pay all possible.

Somewhere those "check cashing" places will add all of these services to handle the fringe.

The trick here is when it's all automated that the huge costs of printing, envelope stuffing, stamping, mailing and all the people employed to handle that paper tiger will all go away.

For instance the total cost to print and ship a bill might be $0.50 ea. which doesn't sound like much until you multiply it by 10K, 100K or 1M customers monthly.

bill

WebmasterWorld Administrator bill us a WebmasterWorld Top Contributor of All Time 10+ Year Member Best Post Of The Month



 
Msg#: 3961688 posted 4:10 am on Jul 31, 2009 (gmt 0)

I think you'll see kiosks at the bank, more powerful ATMs or even people using computers at the local library.

The trend in Japan has been to place these ATM type machines at convenience stores. (If you've been to Japan you'll know that you're hardly ever a stone's throw away from a convenience store.) These machines will even accept cash for bill payment. You don't need to have a bank account for many of the transactions they can handle. They're quite impressive. You can pay most of your bills with these things in addition to buying all sorts of tickets (flights, hotel reservations, trains, concerts, you name it...).

amznVibe

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3961688 posted 4:27 am on Jul 31, 2009 (gmt 0)

What percentage of USPS overhead is employee cost?

I remember incredibly high dollar per hour wages for even new hires and gold plated health insurance and pensions which always made me wonder why any of them would "go postal" unless my memory is very wrong.

Maybe they need to do a Detroit-like reboot.

All I know is UPS prices will go insane if USPS goes under.

vincevincevince

WebmasterWorld Senior Member vincevincevince us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3961688 posted 4:28 am on Jul 31, 2009 (gmt 0)

It is not a surprise; and to be honest I think it should be encouraged and not resisted. Remember that rural mail deliveries in the US are already subsidised. They are actually already unprofitable. The sensible solution is to learn from history.

  • Door-to-door deliveries should be abolished entirely.
  • Physical mail and parcels should be held at the nearest post office for collection.
  • Emails are sent to inform you of a new letter or parcel requiring collection; if you have no computer, you as the recipient can pay extra per month to get an SMS or phone call alert
  • Terminals at that post office should allow cheap printing of electronic mail for those without computers.
  • Electronic mail should become a legally valid medium for all communication; the USPS can move into authentication, scanning and certifying services - in particular certified receipt
  • Major problem with electronic documents (contracts etc.) is having them signed and returned; USPS can do this by providing an electronic signature system, witnessed by a USPS officer

    Overall, abolishing door-to-door deliveries and building up the power of electronic email should give the USPS key new revenue streams and a role which will continue to be relevant in the future. After all, the shortcomings of standard email are very well known - there is a lot that USPS can do to improve on that and charge for.

  • pageoneresults

    WebmasterWorld Senior Member pageoneresults us a WebmasterWorld Top Contributor of All Time 10+ Year Member



     
    Msg#: 3961688 posted 4:53 am on Jul 31, 2009 (gmt 0)

    What percentage of USPS overhead is employee cost?

    According to the pdf...

    First, in regard to compensation and benefits, which compose about 80 percent of costs, USPS has a window of opportunity to reduce the cost and size of its workforce, through attrition and the large number of upcoming retirements, to minimize the need for layoffs. To make changes in this area, USPS will need to negotiate with its four largest unions on collective bargaining agreements that will expire in 2010 and 2011. These agreements cover about 85 percent of postal employees and include items such as cost-of-living adjustments, work rules, and layoff protections. USPS also consults on pay and benefits with three management associations representing most of its other employees.

    Do I see the phrase four largest unions up there? Weren't they also involved in the auto industry? What gives with this Union stuff. They seem to be involved in most things failing these days.

    If you look at the decline of USPS revenues and the increase in debt, there really is only one thing left to do. The Detroit Reboot.

    Maybe my mailman will be one of the first to get nixed. The schmuck spends most of his time in here bullcrapping with the neighbors while people are waiting for him to arrive at their mailboxes.

    LifeinAsia

    WebmasterWorld Administrator lifeinasia us a WebmasterWorld Top Contributor of All Time 5+ Year Member



     
    Msg#: 3961688 posted 3:46 pm on Jul 31, 2009 (gmt 0)

    The trend in Japan has been to place these ATM type machines at convenience stores.

    I'm not sure about Japan, but in Korea checks pretty much don't exist. To pay your phone or utility bills, you used to go down to the bank or post office and hand over your bill with money. I believe you could also use ATMs once they got a foot hold. Nowadays, phone or Internet banking is pretty ubiquitous.

    However, I have no idea how electronic the other side (sending the bills or submitting payments through vendor sites) has become.

    Back here in the States, just about every bill I receive/pay is done electronically.

    And most of the mail I receive is junk, coupon flyers, or magazines. In fact, I didn't get anything in the mailbox during half of the last 7 days.

    buckworks

    WebmasterWorld Administrator buckworks us a WebmasterWorld Top Contributor of All Time 10+ Year Member



     
    Msg#: 3961688 posted 4:54 pm on Jul 31, 2009 (gmt 0)

    Door-to-door deliveries should be abolished entirely.

    That would make sense from one view, but from a broader "green" perspective it makes more sense to have serviced mail delivery routes than it would to have all those householders or businesses driving to the post office to pick up their mail.

    Gibble

    WebmasterWorld Senior Member 10+ Year Member



     
    Msg#: 3961688 posted 5:04 pm on Jul 31, 2009 (gmt 0)

    That would make sense from one view, but from a broader "green" perspective it makes more sense to have serviced mail delivery routes than it would to have all those householders or businesses driving to the post office to pick up their mail.

    Most people would end up going near the post office anyhow on their way to/from work, so it's not going to increase traffic much if at all.

    Digmen1

    5+ Year Member



     
    Msg#: 3961688 posted 5:57 pm on Jul 31, 2009 (gmt 0)

    And most of the mail I receive is junk, coupon flyers, or magazines. In fact, I didn't get anything in the mailbox during half of the last 7 days.

    x2
    Here in New Zealand the same must be happening as everyone is using internet banking. Our Post Office has lots of retail shops where they sell stationary and magazines as well.

    [edited by: encyclo at 11:12 pm (utc) on July 31, 2009]
    [edit reason] fixed quote [/edit]

    MrHard



     
    Msg#: 3961688 posted 6:42 am on Aug 1, 2009 (gmt 0)

    Postal is federal. Just a slight tap into the national debt or tax money and they are good for another 20 years.

    incrediBILL

    WebmasterWorld Administrator incredibill us a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month



     
    Msg#: 3961688 posted 6:57 am on Aug 1, 2009 (gmt 0)

    from a broader "green" perspective it makes more sense to have serviced mail delivery routes than it would to have all those householders or businesses driving to the post office to pick up their mail.

    I lived in a remote rural area growing up and the post office is usually next door to the grocery story.

    People drive in once a week and it's greener for us to make that trip once a week than the post office making it 6 days a week.

    Unless the post office wants to delivery my groceries...

    Now that I've brought that up, if the grocery stores and post office could strike a delivery deal we have one heck of a green distribution system.

    xalex

    5+ Year Member



     
    Msg#: 3961688 posted 9:43 pm on Aug 1, 2009 (gmt 0)

    For all the complaints from everyone, USPS is one of the best in terms of cost and success of delivery without mail loss, damage and fraud. So they are going to be here for a while. Being open in Saturday is great feature that there competitors don't enjoy, and I don't know why they would stop that.

    Their problems are they can't leverage the current economy to there benefits and are slowly losing the advantage of economies of scale. USPS should stop depending on big business, and reach out to small and mid size business.

    As online business grow, the demand for USPS should only increase. The B2B & B2C model works in favor of USPS, not against them, only if they fine tune their distribution model.

    In other countries post office may fail, but US is too big to be completely covered by a private company. Hence there will always be premium of USPS.

    vincevincevince

    WebmasterWorld Senior Member vincevincevince us a WebmasterWorld Top Contributor of All Time 10+ Year Member



     
    Msg#: 3961688 posted 7:16 am on Aug 2, 2009 (gmt 0)

    Now is the time for the USPS to take out its crystal ball, predict the kind of future company or service that will replace them... and then become that company (or fund a subsidiary to become that company).

    jbinbpt

    WebmasterWorld Senior Member 10+ Year Member



     
    Msg#: 3961688 posted 1:44 pm on Aug 2, 2009 (gmt 0)

    For most communities, the Post Office is the only Federal government office in town. Most are now doing passport applications. They need to find more unique government functions to draw traffic in. They used to have tax forms at smaller offices, but they gave that up in favor of them being downloaded.

    Leosghost

    WebmasterWorld Senior Member leosghost us a WebmasterWorld Top Contributor of All Time 10+ Year Member



     
    Msg#: 3961688 posted 2:22 pm on Aug 2, 2009 (gmt 0)

    And the old folks who live on their own and dont drive ..or the disabled or blind who live on their own would get their mail how in this bright new world ..

    For some of thses the mailman or their voice is the only actual face to face contact that they ůmay have all week or all month ..you really begrudge a few cents more on a stamp to keep this contact available ..

    When I was student ..over 35 years ago ..I worked the mail routes in the UK to help pay my college ..even at xmas some families just sent a card to their old folks and didnt visit ..we were the only contact some of them had with a human for days on end ..

    Same still applies here in France ..mailman or woman also has social role ..

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