Tens of billions more for GM. What about the post office?
U.S. Postal Service: RIP
Posted Jun 15 2009, 06:05 AM by Douglas McIntyre Rating: Filed under: Internet, Amazon
The U.S. Postal Service, which has been dying for years due to the advent of the fax, e-mail, and overnight delivery, may finally be close to its last act.
The agency lost nearly $2 billion in its last fiscal year and is faced with the serious consideration of cuts of up to 3,100 offices, potentially eliminating thousand of jobs. Media reports say that first class mail volumes are plunging.
What is killing and will probably eventually finish off the Post Office? In a word: “broadband,” the high-speed Internet system that the current Administration plans to build out in the next two years.
According to MarketWatch, the Postal Service is already looking at stopping Saturday delivery. The next moves will probably cut the number of weekdays the mail is dropped off, particularly outside urban areas where the cost of reaching homes and businesses spread over a wide geography is enormous.
Broadband has taken away the need for sending letters and may large documents. Broadband connections allow users to securely download encrypted files, some of which are the equivalent of thousands of pages of paper. The files can be sent and received in a few seconds compared with days to move them by mail.
Payment systems which wire transfer money have nearly eliminated the role of the check in paying bills. This will only increase as e-banking does.
Even the magazine and newspaper industries which relied on physical delivery systems for decades now use the Amazon (AMZN) Kindle as a way to get the printed word over the Internet and downloaded onto the device. Almost every major print product also has an Internet version. Sending magazines via mail is expensive. Cutting back on that form of delivery would be a blessing.
The modern postal system killed the pony express. The USPS could only last so long before it was itself replaced. That time has finally come.
Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.