March 10, 2010
In spite of a gargantuan federal deficit weighing in at $1.5 trillion, one agency clearly didn’t get the belt-tightening memo. The Department of Commerce, which is responsible for the U.S. Census, has just mailed 120 million letters telling people like me that we will receive a Census questionnaire within a week. The cost of that little venture in paper and envelopes alone is a cool $4,200,000—and that’s only if you get a discount on the lowest-end supplies at Staples, including ink for high speed printers. Government agencies are not used to comparative shopping, so this number might be a bit conservative. Still you have to add an additional $2,500,000 for the ad Census Bureau aired on the Super Bowl—an ad that no one can remember 5 weeks later.
But the real cost of this wasteful spending falls to the Post Office, a government operation with negative trend projections that would make die-hard deficit doves fly the coop. The total: $52,000,000, if in fact delivering a first class letter is worth 44¢.
The Post Office expects a $7 billion shortfall this year, and John Potter, the Postmaster General, says it will likely get even worse. The reasons for this financial disaster are obvious: e-mail and fax, to name two. After spending $4.9 million on three different consulting firms, the USPS came up with a plan: drop Saturday delivery and charge more for postage. They’ve tried that strategy before, of course. But whenever first class postage goes up, large numbers of customers drop out—permanently. They make the leap from paying bills by mail to paying bills on line. They send e-cards and e-vites instead of mailing a greeting or an invitation.
And when second class postage is raised, as it has been almost every year for the past two decades, some catalogs convert to e-commerce only. As for magazines, postal increases have been so draconian that many have simply folded.
The Postal Service has trimmed its workforce and created new ancillary businesses in an effort to compete with FedEx and UPS. But the revenue from those ventures can’t keep up with the costs. Maybe what’s needed is a new campaign—an ad or two on the next Super Bowl broadcast, and a mailing to everyone in the country reminding them to watch, sent out 5 weeks in advance.