All Sections ------------------------------- News & Events Pay & Benefits Departments & Divisions Members Only

Advanced Search

Printer-Friendly Page

---

---

President's Viewpoint

A ‘Perfect Storm’ in the Forecast
Hard Times Ahead
For Hard-Copy Communications

(This article first appeared in the July/August 2008 issue of The American Postal Worker magazine.)

The Perfect Storm, starring George Clooney. Released in 2000, the film’s storyline revolves around a series of traumatic events that combined to doom the principal character and his crew of commercial fishermen. A real-life comparison can be made to the circumstances that confront the United States Postal Service as it embarks on a journey that puts its own survival in doubt.

Postal employees cannot afford to simply sail along, to drift into what looks to be a Perfect Postal Storm.

The negative impact of technology on hardcopy communications has been predicted for many years. But with each advance in technology has come an adjustment, and mail has coexisted with technological advancements, including the telegraph, the telephone, fax machines, and the Internet.

As each new means of communication has been developed, the exchange of the hardcopy version of the written word has continued to be a central part of social interaction. Although futurists were tolling the bell for written communications more than 50 years ago, mail volume continued to increase and our innovative economic system has led to the discovery of one new medium after another for mail services.

Clouds Gathering

But a Postal Perfect Storm is now brewing. The combined effects of technological change, a stagnant economy, globalization, the cost of energy, and the availability of capital are hastening the erosion of hardcopy communication.

The initial decline in mail volume was caused by messages conveyed between commercial entities that sought an inexpensive way to improve speed and efficiency. Businesses at first made the transformation with in-house communications, and then expanded to transactions with other businesses, using electronic messages. The business-to-business transformation was the forerunner of business-to-customer messaging through electronic billing and accounting.

The growth of electronic transmissions has shifted the majority of hardcopy communication from personal and business mail to advertising. Over the past five years, advertising has grown to such an extent that it is the dominant type of hardcopy communications. In 2007, more than 55 percent of all mail was related to advertising.

This domination by advertising mail comes with a price, however: Because it relies on the health of the financial system, hardcopy communication is affected by the expansion and contraction of the economy.

Storm Brewing

The Perfect Storm that now confronts the postal community is gathering strength.

The domination by advertising mail comes with a price: Because it relies on the health of the financial system, it is affected by the expansion and contraction of the economy.

Electronic innovation continues to replace hardcopy communications. Information that historically has been delivered via the Postal Service is now routinely transmitted via “telecommunications.” Those at the cutting edge of technology say that the next generation of telecommunications will be as revolutionary as the Internet, email, and text-messaging once were.

The nation’s economy is in trouble, and even the most optimistic observers offer restrained projections on consumer spending, capital investment, and the national debt. The prospects for growth in mail volume are dismal, with the majority of economists predicting a retrenchment in advertising and a serious erosion in mail volume. In the current year, volume is down 3 percent and showing a trend toward further decline.

Globalization brings special challenges to mail volume, with competition in the “message industry” ever-expanding. India, China, and a host of other developing or developed countries offer huge markets for commercial advertising, so the advertising investments are being stretched over a wider market — which inevitably leads to reduced expenditures on the American audience. Future advertising growth in the domestic mail stream will compete directly with an expanded world market.

Energy costs pose problems for everyone, but they are especially problematic for hardcopy communication, which is heavily dependent on old-fashioned delivery methods. The higher costs amplify the price differential between hardcopy services and electronic communications. Simply put, energy is the lifeblood of hardcopy communications, and the print industry may be among the first to succumb to gasoline costs of $7 or $8 per gallon. The storm gathers strength as postage costs increase disproportionally to the rhythms of the economy, particularly in relation to electronic communications. Hardcopy communication may simply become unaffordable .

History informs us that capitalism must grow to survive. Economic growth is dependent on the availability of capital , but in the current economy, the housing crisis has constricted the availability of money. An estimated $1 trillion in losses has resulted from the subprime mortgage crisis, and these losses necessarily retard growth. So, for the immediate future, a mail service dependent on advertising can be only negatively affected.

Our Last, Best Chance?

Combined, these events portend very difficult times

for the Postal Service and those who use and perform mail services. Proposals to meet the challenge will include a reduction to five-day delivery, surcharges for services, subcontracting and privatization of services, and a host of other unattractive alternatives.

The Postal Regulatory Commission has undertaken, through private contractors, a study of the Postal Service’s “universal service obligation.” The contractors the commission selected have publicly expressed their opposition to the postal monopoly and their support for privatizing essential USPS operations.

Many feel that the best that can be hoped for is a slow descent — yet it will be into an unknown void.

This scenario heightens the importance of the November elections. Government will undoubtedly have an effect on the outcome of the Postal Perfect Storm. If there is not a strong commitment to mail service, postal employees will surely suffer.

For that reason, it is imperative that we get it right — that postal workers help elect a government that abandons the laissez faire policies of government by and for the rich and powerful.

Tax cuts for the wealthy, energy policy written by and for the energy executives, healthcare policy that mainly benefits campaign contributors, and an education policy designed not to teach but to test are policies that will change only through a change of government.

We might not have another opportunity to delay the descent into desperation. Postal employees cannot afford to simply sail along, to drift into what looks to be a Perfect Postal Storm.

[back to top]