Postage Increases Will Hurt USPS in the Long Run

Discussion in 'The Latest DHL and USPS Headlines' started by cheryl, Aug 4, 2010.

  1. cheryl

    cheryl I started this. Staff Member

    Postage Increases Will Hurt USPS in the Long Run - Huffington Post

    Just following the July 4th holiday, the Postal Service quietly announced a rate hike equal to ten times the rate of inflation. The decision to hit their customers with such a steep increase is only the most recent example of Postal management failing to treat the Service like a business - chasing three years of declining revenues with a rate hike that will send customers running and the Postal Service further into its own death spiral.

    Rather than raising prices at a time when its customers are just beginning to recover from the recession, the Postal Service should be emulating its closest competitors, Federal Express (FedEx) and United Parcel Service (UPS). From 2008 to 2009, FedEx and UPS had revenue declines of 16% and 12%, respectively. They both aggressively cut expenses during that same period by 14% and 9%. In the same period, the Postal Service experienced a smaller revenue loss of 9%, yet cut expenses by only 3%. While we applaud the Service for cutting expenses, it has not been nearly aggressive enough in doing so.