First Class: The Postal Service Delivers

The Postal Service delivers

“You just can’t stand still in thisworld any more,” says William Bolger. “It can change faster than your mind can change.” Such pronouncements would be routine from the boss of an ordinary company, but this one comes from the U.S. Postmaster General, talking about what at one time was the bumbling, inefficient, overstaffed, deficit-ridden, money-losing U.S. Postal Service.

No more. In the 13 years since its conversion into a Government corporation with a—mandate from Congress to become financially self-sustaining, the Postal Service has turned first class. It is handling more mail than ever: 119.4 billion pieces last year, 400 million pieces every workday, up 4.7% from 1982. That is more by far than any other postal system in the world. Since 1971, the service’s load has increased by 35 billion pieces, to 18 million new addresses.

The Postal Service corporation is carrying that load with fewer people: 678,845 vs. 741,000 in 1971. Employee productivity has gone up 43%, chiefly because of mechanical mail sorting. In 1971, a postal worker processed 120,212 pieces a year; now a person handles 173,320. Output will go up even more when high-speed optical scanners, which read addresses, convert them into printed bar codes and then send them off for automatic sorting into 136,000 carrier routes, are fully installed.

Perhaps most important of all, the Postal Service has stopped losing money. In 1979, for the first time since World War II, it took in more than it spent. Last year the Postal Service generated a profit, without subsidies, of $616 million, its third in five years. In the early 1970s, it lost as much as $200 million annually.

None of that good news, however, came free. The cost, in part, was sharply increased postal rates for both businesses and individuals. The price of a first-class stamp, a mere 4¢ a generation ago, has risen since 1971 from 8¢ to the current 20¢. The Postal Service has applied to the Postal Rate Commission, which reviews requests for rate increases, for a raise to 23¢ for first-class stamps. It could come as early as October, but probably will not take effect until a few months after the November elections.

The postal system, first headed by Benjamin Franklin in 1775, continues to enjoy a legal monopoly on the delivery of first-class letter mail, although exceptions allow competition from such private organizations as Federal Express and Emery Worldwide. But unlike a few years ago, when the Postal Service sat and waited for business to come its way, it is now aggressively courting customers. For example, it is countering the new overnight carriers with its fast-growing Express Mail, which for $9.35 promises next-day delivery. Another new service is E-COM (for electronic computer-originated mail), which allows transmission of messages to 25 special post offices throughout the U.S., where they are printed and distributed as first-class mail. The Postal Service, though, has yet to make it profitable.

The bulk of the Postal Service’s revenues still comes from old-fashioned mail. Despite the computer age and talk about electronic messages doing away with letters, more, not less, mail is being sent. Christmas volume last year ran 800 million pieces ahead of the 1982 rate. U.S. banks and brokers had to send out millions of Internal Revenue Service W-9 forms this year to comply with new requirements on reporting interest income. The Postal Service earned $100 million just on those bank mailings alone.

Bolger, 61, who joined the post office in 1941 as a clerk, has spent his entire career with the system. He is expected to quit at year’s end for a job in private industry. Along with the improved efficiency, Bolger’s six years as Postmaster General have won more friends for the U.S. mail. A Roper poll last year showed that most Americans give the Postal Service higher marks than the telephone company, insurance firms or hospitals.