The Postal Service’s ticking time bomb

OP-ED | John E. Sununu

September 26, 2011|By John E. Sununu

‘I AM become death, the destroyer of worlds…’’ As his famous words suggest, Robert Oppenheimer, director of the Manhattan Project, had apocalyptic visions as he watched the first atomic bomb light the skies over Alamogordo, N.M. Part physicist, part philosopher, Oppenheimer had a flair for the dramatic. His quotation referred to Shiva, the Hindu god of destruction; it could just as easily have come from Vint Cerf, the soft-spoken inventor of the Internet’s communication protocol some 30 years later.

Far removed from Oppenheimer by both time and technology, Cerf unleashed a very different, but very real, wave of destruction that has yet to crest. Not since the steam engine has any invention disrupted business models like the Internet. Whole industries including music distribution, yellow-pages directories, landline telephones, and fax machines have been radically reordered by the digital revolution. The next business to fall will land even closer to home - the end of your driveway. The US Postal Service is going under.

It will be a cataclysm that would make Shiva proud.

As American expansion accelerated during the late 1800s, only the federal government had the resources to guarantee universal mail delivery. As time wore on, competitive shippers like UPS and FedEx were allowed, but the government protected its monopoly on the franchise it saw as the most lucrative and permanent. But its monolithic dependence on that same franchise - first class mail - has become its greatest liability.

The Internet doesn’t care. Though digital communication will never supplant the need to ship furniture, auto parts, or Christmas presents, bank statements, electric bills, even letters from loved ones, are in deep decline. Anything that can be digitized, from photos to architectural drawings, can be e-mailed. During the past four years, first class mail volume had fallen more than 25 percent. It is projected to fall another 50 percent by 2020. The Postal Service lost $8.5 billion in 2010 and will lose even more this year. The Postal Service projects insolvency in less than a year. What’s a postmaster general to do?

Called before the Senate Government Affairs Committee this month, Patrick Donahoe optimistically offered “ideas that will help ensure the future of our nation’s postal system.’’ He wants to end the requirement for fully funding its retiree health benefits by 2016 - a short-term patch that will not make the agency’s huge liability go away. A second recommendation, ending Saturday delivery, only weakens the overall quality of service - not the best way to retain customers. The elephant in the room is the Postal Service’s vast workforce: it comprises nearly 80 percent of the system’s costs.