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U.S. Post Office to cut $3 billion

David Gura Dec 5, 2011

Kai Ryssdal: Today, the United States Postal Service laid out the cost-cutting plan pretty much everyone knew was coming. The post office is about this close to bankruptcy, so it wants to close more than 200 mail-processing facilities across the country. It wants to do away with next-day delivery of first-class mail. And it wants to lay off 30,000 people, provided it can convince regulators to let it do that. In all, it would amount to about $3 billion in savings.

But with e-mail and online banking all the other trimmings of digital life, what’s the hope for snail mail, anyway? From Washington, Marketplace’s David Gura reports.

David Gura: I wonder who’s writing letters these days, who’s shopping with catalogs, paying the rent with checks.

I asked lawyer David Hendel who needs first-class mail.

David Hendel: Everybody.

Hendel used to work for the U.S. Postal Service; now he’s in private practice. And he says reports of the death of the mail are premature.

Hendel: Now, we’re going to have less of it, but it’s still the single best way to reach individuals in their homes.

In most corners of this country, a letter carrier comes to your house or apartment once a day, six days a week.

Gene Del Polito is president of the Association for Postal Commerce, a group that represents companies that use the mail to do business.

Gene Del Polito: The fact of the matter is, the Postal Service still carries each year 140 billion pieces of mail.

The amount of first-class mail — letters and postcards — has been on the decline. But millions of Americans still rely on the Postal Service to get movies, medicine, contact lenses, heartworm pills. In the future, it may take an extra day or two to get the product, but it’s still convenient and relatively cheap. And Del Polito says there are Luddites among us: Americans who — by choice or circumstance — aren’t banking online.

Del Polito: Who doesn’t have Internet access. Who chooses not to be able to make those payments or receive those bills electronically.

The way we use the mail will continue to change, and the postal service knows that. There’s already competition for overnight delivery. But odds are, Americans will still use the postal service for things that aren’t as time-sensitive: for newspapers and magazines, postcards and Christmas cards.

In Washington, I’m David Gura for Marketplace.

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