Combine the impact of new technologies with the gut punch of the recession, and in the past year alone, the Postal Service has seen the single largest drop-off in mail volume in its 234-year history, greater even than the decline from 1929 to 1933 during the Great Depression. That downward trend is only accelerating. The Postal Service projects a decline of about 10 billion pieces of mail in each of the next two years, going from a high of 213 billion pieces of mail in 2006 to 170 billion projected for 2010.
The situation is so dire that the Postal Service, which is projecting a $6 billion shortfall by the end of September despite a recent postage rate increase, will go to Congress this month to seek emergency relief, looking to cut home mail delivery from six days a week to five. Already, the Postal Service has cut hours at hundreds of post offices across the country, including 56 of the Washington area's 386 outlets. It has consolidated routes, dropping 158 delivery routes locally [in DC], offered workers early retirement and imposed hiring and salary freezes. Still, said Postmaster General John E. Potter, the service is in "acute financial crisis."
Over the next three months, more than 3,200 post offices and retail outlets — out of 34,000 — will be reviewed for possible closure or consolidation.
Downsizing is a business imperative, says Linda Welch, acting vice president of delivery and post office operations at the Postal Service. “Revenues have declined, and mail volume continues to decline,” she says.
Not only have e-mail and electronic bill paying made for a skinnier mail stream, but the recession has caused a sharp pullback in advertising mail that has hurt the Postal Service even more.