Can your business benefit from the U.S. Postal Service's budget crisis

By Michael Cornnell

What About Right Now?

It’s all well and good to know that the Post Office is working on repositioning itself for the future, but how is it doing today? Has its effectiveness waned because of its budget issues, or is it still business-as-usual? Danielle Lum, Ace Reputation Maker for Honolulu-based NK Promotions, weighed in on the USPS’s current performance for her business.

“We prefer USPS delivery because of the high cost involved in shipping to Hawaii,” said Lum. “USPS provides the same shipping speed (sometimes faster) at, most times, 30 percent less than the cost of shipping via express methods,” she explained.

“Instead of paying through the nose for shipping (especially if the order is not needed quickly), we prefer to help our customers save money—money they can use on another order, or to buy more product,” she said. “What we find, however, is that suppliers do not want to use USPS because they have misconceptions about the service (for example, many believe USPS does not offer package tracking, which is untrue), or simply because the express shippers will offer them a discount that they put in their pockets.”

Lum added, “Interestingly enough, in our years of business only three packages have been lost or (very) late. None of the three were shipped via USPS.”

However, Lum expressed some worries about what could happen in the future if the USPS budget continues to spin out of control and it’s forced to cut back on staff and services.

“We are concerned about what is going on at the Post Office because if it goes down, the only options we will have are expensive,” she noted. “Shipping costs have deterred some of our customers from making purchases. Eliminating USPS shipping could possibly hurt our business.”

“Will cutting Saturday mail service hurt us? In a word, ‘no,’” she said. “If a customer needs Saturday delivery, it’s because planning wasn’t good or there were extenuating circumstances. In those cases, we are willing to pay. But otherwise, our packages are sent during the work week.”

According to its own statistics, the United States Postal Service (USPS) ended 2011 with a net loss of $5.1 billion. By the end of its second quarter in 2012, it had  already lost $3.2 billion net, compared to $2.2 billion net for the same period a year prior. In that same six-month span, operating expenses went up $938 million and total mail volume dropped down 1.7 billion pieces. Year-to-date for 2012, losses already are at $6.5 billion, which is $1.4 billion more than all of 2011, and there's still a whole two quarters left in the year.

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