When was the last time you sent a letter when an email could do?
The economy and market forces are merciless when it comes to those who don't adopt a simple maxim: adapt to survive. History has shown us that companies who take heed often enjoy longevity and success, while others fade into our memories. For example, Apple has come a long way from being a simple computer manufacturing company and has created the iPod, Apple TV, iCloud, iPad and iPhone, to name a few.
On the other hand, it's probably been years since you've made Friday a "Blockbuster night." Once a leader in the video rental industry, Blockbuster has fallen victim to cable TV on demand movie options and innovative companies like Netflix, Hulu and Redbox. Everything in life takes part in evolution to either become stronger and more diverse or fall victim to fate through extinction. Business entities and quasi-government agencies are not exempt.
Now the United States Postal Service (USPS), long known for its image of reliably delivering letters and packages across the country and the world, wants to pull itself into the modern age by considering unconventional markets and new investments. But it may be making a mistake.
USPS is an entity with a longstanding history and has evolved from the horse and carriage to overnight delivery to anywhere in the world. But these days, the postal service is seeking to diversify its product offerings to include grocery and alcohol deliveries, and more risky financial-related products like short-term loans and banking services.
Many policy makers question if this is an appropriate path for the postal service. The USPS is protected by the Constitution as a mail-delivery monopoly. However, it is currently accumulating budgetary deficits and is often accused of questionable leadership styles and a highly bureaucratic culture. For the past decade, Democratic Senator Tom Carper of Delaware has advocated for meaningful postal reform, calling it "[a] duty in Congress to pave a fiscally sustainable path that will enable this American institution to thrive."
Some of the Postal service's problems stem from its own serial mismanagement and a disjointed, union-based infrastructure of 600,000 employees with bloated influence-from letter carriers and office-based clerks to management ranks. These issues combined leave the USPS liable for financial obligations that no business could sustain.
According to a new report, liabilities at the Postal Service now stand at $68.3 billion, up roughly $5 billion from last year and 62% since 2007. This occurs in tandem with massive financial losses of $51.7 billion from 2007 to 2014. This is mostly due to a sharp decline in sales of first class mail. In addition to the compounding fiscal deficit, the USPS has seen an increase in late deliveries, reduction of services in rural communities and at least $1.4 billion in funds that could be better allocated, according to the USPS Inspector General.
And if that is not enough, some problems are beyond their control amid a dire fiscal outlook. The USPS is often the victim of competing ideologies on Capitol Hill. A 2014 report published in GovernmentExecutive.com reads, "Postal management, Republicans and Democrats on Capitol Hill, labor unions, the mailing industry and the Obama administration all agree on the need for congressional reforms to keep the agency -- which still brought in $66 billion in revenue last year -- afloat," and "But there is very little agreement among those groups about what those reforms should look like."