Postal Service must compete better

We don't need the U.S. Postal Service as much anymore. And the last thing we need Congress to do is to bail out USPS's losses. Lawmakers already have piled up more debt than we can see our way out of anytime soon.

Postmaster General John Potter argued Tuesday that Congress must give him more flexibility if this “quasi-independent” corporation of the federal government is to survive. His said the USPS will lose $238 billion in the next 10 years if changes aren't made. Last fiscal year, the mail volume dropped 13 percent - more than double any previous decline - and the agency lost $3.8 billion. Future losses are expected to only worsen.

Potter wants to make dramatic changes, such as longer delivery times for mail, increases in postage prices above the rate of inflation, possible layoffs - and reducing mail delivery to five days per week by eliminating Saturday service.

USPS's accelerating decline is no surprise. This is the age of electronic communication. People rely more on e-mail, texting and social media for messaging. Efficient private competitors such as UPS and FedEx have taken a big chunk of USPS's package and overnight delivery business.

USPS's monopoly on first-class mail generates more than half its revenue. It doesn't pay state sales, property or income taxes. Nonetheless, the price of a stamp for a first-class, one-ounce letter rose from 33 cents in 1999 to 44 cents last year, and losses still mount.

Most Americans probably can live just fine without Saturday mail delivery. Eliminating it and raising postal rates might avoid more red ink - for another year or so. Yet those measures aren't long-term fixes. Labor costs, with the average postal worker earning $83,000 a year in compensation, still consume 80 percent of the budget despite major advances in technology and automation. USPS owes taxpayers billions through the Federal Financing Bank.

Clearly, the postal operation must become more efficient. If it doesn't soon, it may be time to remove USPS's monopoly status. Several European countries already have made such a move with their mail; the entire European Union is expected to be open to private competition in 2011.

Certainly, there are some risks with privatization. Among them is considering the effect on many businesses, including The Gazette, that rely on second- or third-class mail service.

And no long restricting mailboxes to one mail provider may be unsettling to many people.

But we're skeptical that “more flexibility” can solve the Post Office's financial woes. Opening more of our mail delivery to private competition may well be the best remaining option.