NEAL CONAN, HOST:
This is TALK OF THE NATION. I'm Neal Conan in Washington. Yesterday, the United States Postal Service announced plans to close about 250 processing centers, lay off about 28,000 workers and accept slower first class service as a consequence. As many as 2,000 post offices could close, and Saturday delivery could be on the block, as well.
All those cuts could reduce losses, maybe even put the USPS in the black, but when your mailbox is stuffed with direct mail ads, some raise what was once unthinkable: Has the post office outlived its usefulness?
Our phone number, 800-989-8255. Email us, firstname.lastname@example.org. You can also join the conversation on our website. Go to npr.org. Click on TALK OF THE NATION. Later in the program, a federal appeals court approves compensation for bone marrow donors. But first, post offices.
Ian Lee joins us from the CBC studios in Ottawa. He's a professor at the Sprott School of Business at Carleton and an historian of both the U.S. and Canadian postal services. Nice to have you with us today.
IAN LEE: Good afternoon, Neal, it's a pleasure to be on NPR.
CONAN: And when postal workers in Canada went on strike in 1990, there was outcry, pressure on the government to make changes, which they did. When postal workers went on strike this past summer, I gather the response was quite different.
LEE: It was, and to even - to further unpack the story, years ago in the '70s, I was in the bank, a major Canadian bank, lending money to small, midsize businesses. And I lived through several postal strikes, and I saw the devastating impact at that time because the cash flows of the businesses would just come to a halt, a complete halt.
This past strike, this last strike in June of 2011 was completely different. There was great indifference across the country towards the postal strike, and many people didn't even notice it.
CONAN: Didn't even notice it?
LEE: Well, in past strikes - and there's been, I should point out there's been quite a few postal strikes. Between 1965 and 1997 in Canada, there were 19 strikes and/or walkouts. Seven of them were legislated back to work by the parliament of Canada. So we have a lot of experience with postal strikes.
And in past postal strikes, in the '70s, '80s and '90s, there was an immediate demand from the business community and citizens to get them back to work because of course it was so devastating. People couldn't get their pension checks, their unemployment insurance checks, their old-age pension checks, and businesses couldn't receive - obtain their cash flows.
You know, they would mail out their invoices, and they couldn't get the payments back, which was devastating. This time, there was not that hue and cry from people across the country to the politicians, to the government, saying you must do something now because people were no longer dependent on it.
CONAN: There are differences between the Canadian system and the American system, but one similarity between the two countries is large, rural areas with people who are a long way away from the nearest post office or postal sorting service. What was the reaction like in places like that?
LEE: You raise a very good point. In fact, that is the - I think the major sticking point that probably prevents governments from privatizing the post office or really cutting it back more because the rural communities - where in Canada and I'm sure the same in the States there's a disproportionate number of elderly people - who grew up in a different era and have a visceral attachment, an emotional attachment to the post office.
And so that is where the greatest resistance lies to any attempt to scale back postal services because - partly because, as I said, this visceral attachment and partly because the high-speed Internet hasn't completely rolled out and penetrated in all rural parts of the country, and so that they're not as easily able to switch to electronic communications.
CONAN: Ian Lee's account of the Canadian postal strike was cited in a recent story in the New York Times with the headline "The Junking of the Postal Service." Elisabeth Rosenthal wrote that piece. She raises the question of whether the postal service has outlived its utility.
A few weeks ago, she reached into her mailbox in the lobby of her building in the Upper West Side of Manhattan, pulled out two credit card offers, an ad for a sale on running shoes, pizza coupons, among a lot of other junk mail, and joins us now from a studio at the New York Times, where she's a reporter and blogger. Nice to have you with us today.
ELISABETH ROSENTHAL: Hi, nice to be here.
CONAN: And again, Canada and the United States are different, but the trend is unmistakable. In this country, it is almost all direct advertising.
ROSENTHAL: Oh, that's right, and one of the reasons I decided to write this article for our Sunday Review is, as I mentioned, in the lobby of my building, there was a petition recently that said: Save Saturday delivery. And I was somewhat surprised at the emotional outpouring of support, you know, signatures just pouring onto this paper.
And I thought: Well, are people thinking about the utility of Saturday delivery to their lives? And so two days later, I tried to collect what was in my mailbox, and it certainly wasn't anything I couldn't have waited until Monday for, and frankly, most if it I could have waited forever and been happy not to have.
CONAN: And indeed there are any number of places around the country, you're saying this is a terrible waste of paper. We should find ways to ban this.
ROSENTHAL: Right. I mean, I cover the environment. That's my usual beat. And I know that cities everywhere in the United States are struggling to get more things recycled, get paper out of the landfill, and this is an enormous burden on cities and on taxpayers because much of this mail is never even looked at.
CONAN: Not even looked at.
CONAN: And as you look at what is - the trend is unmistakable. I mean, people do request that their - I guess their credit card bills, most of us, show up on paper. We tend to pay them, though, electronically.
ROSENTHAL: Right. I think there's a bit of a lag there. Many people now will pay electronically. The post office says, and research shows, that they still mostly want to see the paper statement, although frankly I've gone over to pretty much all electronic.
And I should mention in terms of what came to my mailbox that Saturday. I have in the last year used a service that's mentioned in the article called Catalog Choice, where you can opt out of catalogs that you don't want. So the amount of direct mail that was in my mailbox that Saturday was vastly less than it would have been a year ago.
CONAN: Oh, without the L.L. Bean and the Harry and David and the Macy's and Bloomingdale's...
ROSENTHAL: I get almost no catalogs now.
CONAN: All right. Let's see if we can get some listeners involved in the conversation, 800-989-8255. Email us, email@example.com. Has the postal service outlived its usefulness? We'll begin with Mark(ph), Mark calling us from St. Louis.
MARK: Yes, thank you for giving me the opportunity. I don't think the postal service has outlived its usefulness, and in regard to the comments about direct mailing, I certainly understand some people's aspect of looking out for the environment and saying, well, I don't really want that.
However, American business clearly utilizes direct mail, and in this economic climate, they don't throw money away. So it must have a payback for American business to advertise through the mail.
I would hate to see that thrown in the dumpster as we're trying to - so to speak - as we're trying to see some economic rebound, that that direct advertising goes by the wayside. And with regard to e-bill pay and those sort of things, there are still a great number of people who either choose not to avail themselves of electronic finance but don't have access to it, not to mention the rural constituent.
But to criticize direct mailing as being this great pariah I think is somewhat misplaced because, again, American business obviously finds a useful component with direct mail economically.
CONAN: Elisabeth Rosenthal, in addition to that argument - and he's right, they don't send this stuff out if it doesn't work - there are other economic arguments, including, what, half-a-million employees in the United States Postal Service.
ROSENTHAL: Yes, I think, you know, the extreme is to say do we need a postal service at all. The reality is that we need to think what kind of postal service do we need? And I think the business argument - I mean, to me, I wanted to raise two questions. One is, do we need mail every day, when, for example, recycling gets picked up in my building once a week? Maybe the proportions should be different.
Also, yes, direct mail is clearly invaluable for businesses, but is that something, then, that should be a government service, or should it be privatized the way it has been in Europe? Certainly when mail services, national mail services have been privatized in Europe, direct mail still continues to be delivered, and it even expands. But that's not considered a government function anymore.
CONAN: Countries in Europe, for the most part, don't have Alaska to worry about. But Ian Lee, the - I wonder, how is this debate going on in Canada? And is there Saturday delivery in Canada, for example?
LEE: Well, to deal with the last question first. We eliminated Saturday delivery. Oh, it must have been 15, 20 years ago. But we've been cutting - in addition to that, we've been cutting back or pulling back on service. All new homes since 1985 no longer receive mail to the door. There are green boxes set up in every suburb at the end of each street, and they basically have an external, outside post box with addresses, and you have a key, and so it's - they've done this to try to, you know, to save money by eliminating door-to-door in all new housing projects that have been built from that point forward.
But if I can just turn to the - your other question, because we have been having a very similar debate on the, you know, the ad mail. The volumes are plummeting on first class mail because people are switching to electronic banking and to electronic payment deposit.
I obtained a figure from the government of Canada: 91 percent of all pension checks are deposited electronically. Well, 98.5 percent of all payments to the clearing system are now digitally cleared, that is to say not using a piece of paper. And on the flyer side, the newspapers, of course, are competing - the post office is competing with the newspapers to deliver those flyers. And then another substitute is coming along called electronic coupons.
Companies like Home Depot are now offering the possibility of obtaining your flyer electronically by providing your email address. So there are alternatives to the post office that are emerging.
CONAN: There's an email here from Doris in Oklahoma, and she writes: In the debate about the future of the USPS, I've heard many complain about the proliferation of junk mail. We should consider many households may use circulars from the grocery and discount stores to help plan increasingly tight budgets.
And yes, there are some coupons available electronically. There's also, of course, sites like Groupon. But again, some people don't have access to those materials.
We're discussing has the postal service outlived its usefulness or perhaps what kind of postal service do we need. Does it need to be a federal service? Give us a call, 800-989-8255. Email us, firstname.lastname@example.org. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.
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CONAN: This is TALK OF THE NATION from NPR News. I'm Neal Conan. In 2006, nearly 100 million pieces of first class mail passed through the post office. That number dropped to 78 million this year and should be cut in half by 2020. That's a lot of money being lost to email and online bill payment.
Last year, the United States Postal Service lost more than $5 billion. It's projected to lose a record $14 billion next year. In response, the postal service continues to look at cuts in jobs and services, which raises a question: Has the post office outlived its usefulness?
800-989-8255. Email us, email@example.com. You can also join the conversation at our website. That's at npr.org. Click on TALK OF THE NATION. Our guests, New York Times' Elisabeth Rosenthal, she wrote a recent piece headlined "The Junking of the Postal Service;" also Ian Lee, a professor at the Sprott School of Business at Carleton University in Ottawa. He's studied the postal services in both the United States and in Canada. Let's go next to Ben(ph), and Ben's with us from Barilla in Ohio.
BEN: Yeah, hi. Yeah, I think instead of scrapping the post office, it does a lot of things, and in fact I think it should be given more responsibilities than it already has.
I spent a year in Germany, and if you want a bank account with the National Bank of Germany, you open an account, you do all your banking at the post office. You also go there if you want telephone service or, you know, since the Internet, you want Internet service, you get that at the post office, too.
You know, and in light of all the problems we've been having with these private banks worldwide, all the failures there, I think it would be good just to have, you know, a reasonable, not, you know, give-me-all-the-cash-you-can kind of banking system, but, you know, normal banks like we used to have.
CONAN: Well, has the banking system outlived its usefulness is another program entirely, Ben, but...
BEN: Well, sure, but what I'm saying is that there's a lot more that the post office can do. You already have an office in, you know, every town and city and burg in the country. I mean, it's a great resource; we ought to utilize it.
CONAN: Elisabeth Rosenthal, it's - USPS is, well, it's got a charter. It's covered by Congress, too.
ROSENTHAL: Right, and I think some people would say that that charter is too limited in just in the way that our caller has mentioned. When you look at the German postal service, they very long ago decided to - saw that mail volume was decreasing and decided to see what else they could do. And they got into a whole array of other services, such as banking, they sell phone cards, they have, you know, Internet exchanges for labor, different kinds of work. You can do an awful lot in the German post office.
They actually own DHL. So when I get a package from DHL here in New York, I'm doing business with the German post office. And they've been very, very creative in doing things like that. Someone from the German post office told me that, well, we have someone on every block in Germany every day, almost in every home.
Why don't we do things like delivering meals to the homebound elderly? I mean, the postal service could do a lot of things, but its charter at the moment prevents it from doing so.
CONAN: Ben, thanks very much for the call. And Ian Lee, we need to go back in time a little bit to remember that at one period, and indeed for many, many years, the postal service was considered, well, one of the essential functions of government.
LEE: Indeed. The - when I did my research, I was interested not so much in the history as in the policy: Why was the government the owner of the post office from the very beginning? So I went back to the origins of the Canadian, and that didn't really provide the answers. So I went back to the origins of the U.S. Postal Service, and then that drove me back to the origins of the Royal Mail in England.
And I found that it was at the very beginning, the monopoly was passed by the king, and this was in the 1500s, to ensure private communications through private means could not occur. In other words, you had to put your postings in the Royal Mail so that they could ferret out or discover seditious or treasonous activity.
And then once that threat to the king had gone away, the emerging government, meaning the emerging democracy, quickly realized that the post office was an absolutely vital way of communicating with citizens, and it became far more critical in the United States and Canada because the distances of these two countries are so vast.
And so it became - you know, in the early records of looking at Hansard for the early Canadian parliament and looking at the early records in the Congress, I found that they were spending most of their time debating the post office. It was a really, really important organization.
CONAN: Let's go next to Jennifer(ph), Jennifer with us from Amagansett in New York.
JENNIFER: Hi, thank you so much for taking my call.
CONAN: Go ahead, please.
JENNIFER: Sure. I'm actually sitting outside of my local post office. I live on Eastern Long Island, and there is no mail service directly to any of our houses in our village. So we get a free post office box from the post office, which we - I was just explaining, we basically, it's just used for junk mail. I come two or three times a week, and I clean out all the catalogs and the junk and the credit card offers and the political flyers.
I rarely get any actual mail. And it's a big inconvenience for people like me because every time I order from a catalog, it can't go to my post office, it has to come to my home. So it's a completely useless institution out here, I feel.
CONAN: Useless and wouldn't make a lot of difference if that was the USPS or the Ben Jones Private Mail Service?
JENNIFER: Yeah, it wouldn't really make a difference. I only - I literally only come to clean out my mailbox once or twice a week because it just gets overstuffed with junk.
CONAN: Interesting, Jennifer, thanks very much for the call. Good luck.
JENNIFER: You're welcome.
CONAN: Joining us now is Bill Snodgrass. He's with us from North Platte in Nebraska, where he's a pharmacist and the owner of a USave Pharmacy. Nice to have you with us today.
BILL SNODGRASS: Nice to be with you.
CONAN: And I wonder: How important is the postal service next-day delivery, which was one of the things that may be sacrificed in this latest announced plan of cutbacks?
SNODGRASS: Well, in our particular area, it's really important. We mail probably 100, 200 prescriptions a day up to rural areas from the city of North Platte. And most of those are mailed to people that are 60, 65 years and up that live in small, rural communities. It may be as far as 60, 70, 80 miles away from here that it's really hard for them to drive.
And they rely on the mail for a lot of their services, one of which is their prescription delivery, so, you know, their heart medications, their diabetic supplies. We mail most of that to them, and if we mail it today, in most cases they have it tomorrow. If not, they always have it within two days.
And with - they're closing the distribution center in North Platte, and when they do that, we'll probably go three to five days, maybe longer. And that could put a real hardship on those people, you know, receiving their medications on time.
CONAN: I wonder also how are your customers reacting to the prospect.
SNODGRASS: Well, you know, as usual, they have - the problem really isn't there yet because the distribution isn't closed, and I think the awareness of it is a little bit on the lacking side. So we really haven't hardly had much feedback. It won't be until it doesn't show up is when the feedback will occur.
CONAN: Well, have you considered the idea of switching from the USPS to FedEx or United Parcel Service or one of those other delivery companies?
SNODGRASS: That's what we're going to have to do. Currently, we mail out free. And our average package size, the postage on it runs about $1.68. And if we go to FedEx Second Day Ground or UPS Ground, it raises it to the $4, $4.50 level.
CONAN: So that's a considerable addition on to everybody's prescription.
SNODGRASS: Right, exactly. You're adding, you know, $300, $400 a day.
CONAN: That's quite a change. This - you've seen this prospect creep up and service slow down and change over the years. Can you characterize the difference?
SNODGRASS: Well, up to this point, we really have had no difference. The service level out here is just really very high. Like I was saying, we do have a distribution center here, and if we mail that up into the most rural part of the state, if we drop it in the mail this afternoon, it's there tomorrow. I mean, you can't get much better than that.
And the - we've had just excellent service. Now with the closing of the distribution centers, and there's about four of them, I think, in the state that are going to be closed, they're going to move our distribution to Cheyenne, Wyoming, and that's where we're going to run into the multiple-day problem. You know, they've got to truck it there 300 to 400 miles, and then it's sorted and then re-distributed out of there.
CONAN: There's more than a few times during the winter that can be a...
SNODGRASS: That's going to be a problem. And so, you know, it's kind of a unique situation, and it's such a lifeline to a lot of people in those rural areas. Now, obviously they choose to live there, and they can choose to, I guess, drive that way, but a lot of them, that trip's going to be 150-mile roundtrip.
CONAN: Well, we wish you the best of luck, thanks very much for the call.
SNODGRASS: Well, I appreciate it, thank you for the time. You bet, bye.
CONAN: And Elisabeth Rosenthal, you mentioned going down to your post box in the Upper West Side of Manhattan, that's a long way from Cheyenne or remote communities in Montana or Nebraska or Wyoming or Alaska.
ROSENTHAL: Well, it sure is, and I don't think I would advocate that people in rural states, rural areas of rural states wouldn't be able to get their medicine on time. I guess what I wanted to question is whether flooding the Upper West Side of Manhattan with junk mail is a good way to finance that. Maybe we have to think, you know, outside the traditional mailbox. Maybe there's a different kind of structure that would serve the current needs of the country much, much better.
CONAN: Here's an email we have from Jeremy(ph) in Cincinnati. The United States Postal Service has announced that the time to deliver periodicals will now be between two and nine days. The change could be fatal to weekly news magazines and daily newspapers. These publications rely on fast delivery in order to maintain their subscription base and keep articles relevant. The more time it takes to deliver the magazine, the earlier the deadline for printing is, so the magazine can arrive on a specific day.
Therefore the more days between printing and delivery, the fewer people will subscribe because the articles will be more dated. Would the newspapers and periodicals be able to sue to prevent these delays on grounds of hindering their right to free speech because at the moment federal law requires subscriptions be sent through the U.S. Postal Service? Is that true? Is that accurate? Do you know, Ian Lee?
LEE: Well, if I can - I'm not sure about that part, but I wanted to really to respond to the larger issue that's involved that Elisabeth has really touched on very nicely, and it shows that the model, the business model of the U.S. Postal Service is no longer viable because 90 - and I estimate about 90 percent of citizens don't really need it that much anymore. They don't notice it. But 10 - the other 10 percent need it very, very badly, as the previous caller pointed out.
And why the business model is flawed is that their costs are going up each year. There's more addresses, a million more addresses a year that must be served, but the volumes are declining, which - and, of course, the volumes are declining most rapidly in first-class mail, which is by far and away the most profitable. And I think it's 45 cents a letter now in the U.S. And so ad mail is only generating two or three or four cents a piece. So if you're losing every letter that the post office loses - and I mean that is no longer mailed to the post office - has to be offset by, you know, 20 or 30 pieces of ad mail. And so this business model is failing. It's declining before our eyes.
CONAN: Elisabeth Rosenthal, you also note that this is a business afflicted by nostalgia that many people remember that invitation that they got through the mail or that wonderful letter they got from the boyfriend or the girlfriend in summer camp.
ROSENTHAL: Sure. I mean, I love the nostalgia - I love the experience of opening my mailbox and hoping there's something good and wonderful inside, but there isn't most of the time anymore. And there certainly isn't every day, so maybe we should think about no Saturday, maybe we should think about twice - I don't know what the answer is, but I'm - I do know that as the U.S. Postal Service is struggling to survive financially, the model isn't serving the people very well at the moment.
CONAN: Elisabeth Rosenthal is a reporter and blogger for The New York Times. Also with us, Ian Lee, a professor at the Sprott School of Business at Carleton University in Ottawa and a historian of both the U.S. and Canadian postal services. You're listening to TALK OF THE NATION from NPR News. And here's an email from Jennifer(ph) in Fort Worth. Please note the U.S. Postal Service is a private entity that does not receive taxpayer money. However, it is the only private company mandated by law to prefund health and retirement funds.
Wouldn't it make sense to let go of all the government control and let the post office run like every other business? Elisabeth Rosenthal, I think quasigovernmental agency is probably more accurate.
ROSENTHAL: Well, yes. I mean, most of the European post offices have now been privatized. The irony at some level is that they look very much like the U.S. Postal Service from the user perspective. I don't think when you're getting mail in Germany or Sweden or Denmark, you think, oh, this feels really different. It's the same. So, yes, maybe that's the answer.
CONAN: Let's go next to - this is Gary(ph). Gary with us from Wichita.
GARY: Yeah. Hey, I love the show.
CONAN: Thank you.
GARY: In fact, it was on a previous show that I found out that UPS and FedEx actually use the United States Postal Service as like a last-mile delivery service. And it seems like there's a lot of that that can be utilized to add efficiency and to change the postal service and think outside the box. Say, this guy in Kearney, Nebraska, you know, maybe a way to get it to the distribution service - center would be by overnight and then let the post office send it the rest of the way.
But another point I've been wanting to bring up for a long time is I think they should get rid of Saturday service but do it in a way - if you take one-sixth of the postal carriers off the street and then you give everybody an option where they pay like a dime a week or whatever, and they can have their mail set aside if they have to have Saturday service, set aside at their local post office, and now, there's an extra one or two employees at the desk. And so businesses or anybody that needs medication or whatever can still get that on Saturday, but you can take a lot of feet off the ground by doing that.
CONAN: Get a lot of feet off the ground, well, again, Elisabeth Rosenthal, there's an awful lot of feet to get off the ground. This is a major employer.
ROSENTHAL: Yes. And I think that's certainly a huge issue particularly in the time of recession. You know, what should we do with all the people who work for the post office as - if we want to downsize it? But then, again, we could go back to the caller who lived in Germany, there's certainly incredible room if the post office charter is changed for thinking of new and different things the post office can do. I mean, it's an incredible institution. At one level, it gets mail delivered across the country overnight. It is there on every block in the United States every day. So maybe we can think of other things it could do.
CONAN: Thanks very much for the call, Gary.
GARY: I have a great idea if you want - that you came up - when you talked about another idea. Why aren't they out there reading the gas and the water meters?
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CONAN: Because they don't work for the gas and the water companies but...
CONAN: ...if they could, I understand what you're saying, is you could - here's an email we have from Susie(ph). As a registered nurse, I've noticed the absence of the argument of having someone regularly stop by the homes of the elderly, the ill and the otherwise disenfranchised, many of whom are on short on resources and support, provides a significant public health benefit. The postal carrier provides a pair of eyes that can notice when someone has failed to collect their mail for a few days or when something just doesn't seem quite right.
I realize this is not the explicit role of the postal service, but for some reason, for some people, the postal carrier is the only person who regularly comes by. So he or she is particularly positioned to notice changes that may indicate problems given the environment of cuts to social programs and struggling health care systems. The postal service seems a relatively cost-efficient way to provide a check for the medically vulnerable among us. Yet, another aspect of the postal service that we sometimes overlook.
LEE: Neal, can I jump in on this?
CONAN: If you're very quick, please.
LEE: I'll be very quick. We went through a very similar debate in the mid-'80s, and the post office realized they couldn't carry their costs on their base. So they said we have to diversify our services, offer catalogs, maybe charge to elderly shut-ins. And what happened was conservative party MPs protested because they said this was subsidized competition. Government assets were being used to compete unfairly against small businesses in the private sector.
CONAN: We're going to have to leave there. Ian Lee and Elisabeth Rosenthal, thank you. This is NPR News. Transcript provided by NPR, Copyright NPR.