Top postal service official addresses shortfall, rivals
Every time you hit “submit” to pay a bill online, you're making a decision that makes Patrick Donahoe cringe.
"I wish you wouldn't do that," said Donahoe, the deputy postmaster general of the United States Postal Service who visited Atlanta on Wednesday. "And buy Elvis stamps," he quipped.
The sense of humor is a must in the face of a grim question: How can the post office succeed as more people pay bills online and advertisers cut back on direct mail due to the recession?
In the last 10 years, Donahoe had to cut 25 percent, or 210,000 employees, from his work force. In Atlanta, that translated into a loss of 1,230 jobs in the last five years. The service now employs about 9,300 locally and 599,000 nationwide.
Still, the agency's budget is expected to fall short by $238 billion over the next 10 years, as mail volume declines from 177 billion pieces in 2009 to an estimated 150 billion pieces in 2020.
What is bad for the post office may, in theory, seem good for rivals like Sandy Springs-based UPS and Memphis-based FedEx.
But that's not quite true, Donahoe said. That's because the services compliment each other. (UPS agrees, saying it is a "major customer" of the postal service.)
"We are FedEx's largest customer," Donahoe said. "We did almost $1.4 billion with FedEx last year." FedEx planes carry U.S. mail during the day when the planes would otherwise be idle. The post office also spent $200 million with UPS, which also carries U.S. mail.
The postal service is required to deliver to every area in America. It also delivers packages for UPS and FedEx, especially to hard-to-reach places, Donahoe said.
The postal service gets no government funds and would rank 28th on the Fortune 500 in 2009 with revenue of $68 billion if it were a publicly-traded company. That makes it bigger than UPS and FedEx.
Donahoe said he's working on several other innovations: five-day a week deliveries, online stamp printing, packaging stamps for sale at retail outlets (the way gift cards are sold), an iPhone application that tracks packages, and Office Depot counters where people can buy stamps and mail packages.
Donahoe admits that service at post offices can be slow, and he said he's working on ways to speed it up. "Making customers wait in line is disrespectful," he said.
