US Post Office: a Warning to the Imaging Industry
By: Daniel Fulton & Misty Gonzalez
There was a time when the United States Postmaster held one of the most important roles in American society. But it’s no longer 1794 and the United States Postal Service (USPS) is struggling to stay afloat, ending the 2011 fiscal year with a $5.1 billion net loss.
Today, mail volume has declined by 3.1 billion pieces (1.7 percent) from 2010, and the Postal Service’s largest, most profitable product, first-class mail, continued its year-over-year decline by $2 billion; dwarfing any growth in more competitive products.
“The continuing and inevitable electronic migration of first-class mail, which provides approximately 49 percent of our revenue, underscores the need to streamline our infrastructure and make changes to our business model,” said Chief Financial Officer Joe Corbett. “Since peaking at 213 billion pieces in 2006, our volume has continued to decline each year.”
All of this spells doom for an anachronistic USPS, led by Postmaster Patrick Donahoe, which clings to a strategy built around slowing digital adoption rates within a dwindling customer base. For Donahoe, the issue is clear; “We’re in a deep financial crisis today because we have a business model that’s tied to the past,” Donahoe told the New York Times “Our business model is fundamentally inflexible. It prevents the postal service from solving its problems.”
On the verge of collapse, USPS is undergoing forced change that is likely to be too little, too late. European postal services embraced digital processes years ago and now many are thriving.
Each year more and more documents and processes will become digital. Meaning hard copy (PRINT) will ultimately decrease. Is your business model based on a declining market? Are you set up to see year-on-year decline until one day your organization is looking at $10,000, $100,000, or $5 billion net loss? Do you think it’s possible that this same phrase could describe your organization and your corporate culture one day… “We’re in a deep financial crisis today because we have a business model that’s tied to the past. Our business model is fundamentally inflexible. It prevents us from solving problems.”
In an interview with the New York Times, Donahoe said “In 2000 5 percent of people paid bills online. Now it’s 60 percent.” The signs were there 11 years ago, but the Post Service revenues didn’t peak until 2006. Their continued success made them blind to the change happening all around them—they didn’t feel the water heating up until it reached a boil.
What small stats are you sweeping under the rug today that might be boiling the water tomorrow?
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