business news in context, analysis with attitude

The Wall Street Journal has a story about Megan J. Brennan, who is becoming the first female postmaster general in the history of the US Postal Service (USPS), charged with "transforming the Postal Service to meet the biggest financial challenges in its history, as Americans send fewer and fewer letters." Those financial challenges include dealing with billions of dollars in losses each year, driven in part by changing demand for USPS products and services, and in part by "a congressional mandate that it prepay more than $5.5 billion each year for retiree health benefits."

Brennan says that the USPS has to "evolve and operate more like a private-sector business," the story says, and her attitude has been shaped in part by "a yearlong M.B.A. program at the Massachusetts Institute of Technology in 2002."

The Journal writes: "A key tool is the agency’s sprawling network, she says, which enables it to deliver to nearly every house, every day. That delivery network allows the agency to compete with rivals United Parcel Service Inc. and FedEx Corp., as well as to team up with them to deliver packages from local post offices to residential doorsteps. It also means that the agency can do same-day deliveries, such as in a test program for early-morning grocery deliveries it launched in San Francisco this summer with" And, the story says, the USPS "will continue to invest in a targeted way, despite being short on cash. Much of that will go toward continuing to update a network designed for letters, not packages. The agency is currently bidding on vehicles to replace some of its aging fleet - about 140,000 vehicles are more than 20 years old."

“We’ve got to compete for business every day, and clearly we have to develop products and services that consumers want,” Brennan tells the Journal. “While we’re challenged, I would say that there’s plenty of upside.”
KC's View:
I've said it before and I'll say it again. The USPS is better off trying to be more aggressive and competitive than it is by reducing services and products. At least this way, it has a shot at making it.