Privatization Issues

Technology Threatens Postal Service

What rain, snow and sleet can't stop, e-mail may very well jeopardize. Consumers are paying more and more bills over the Internet and that will lead to an "unprecedented" drop in first class mail beginning in 2003, according to a General Accounting Office report to be released tomorrow.

That competition -- along with the growth in private delivery services -- could threaten the U.S. Postal Service's ability to provide universal service.

  • First-class mail volume is expected to peak in 2002 and then decline at an annual rate of 2.5 percent from 2003 to 2008.

  • That could cost the U.S.P.S. $17 billion in revenue over the coming decade.

  • In order to cope, it might have to close some of its 38,000 post offices, reduce hours or charge higher rates for deliveries to remote destinations.

  • The Postal Service is expected to have record revenue of more than $62 billion for the fiscal year that ended Sept. 30 -- and net income of about $200 million.

A House subcommittee is scheduled to open hearings on the U.S.P.S. tomorrow.

Source: Mike Snider, "E-Mail Use May Force Postal Service Cuts," USA Today, October 20, 1999.

For text
http://www.usatoday.com/news/ndstue03.htm

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