McKinsey to Post Office: Cut Back Delivery

U.S. Postal Service trucks might be seen less often if the Postal Service follows advice given by consultant McKinsey & Co.

Image: U.S. Postal Service

The U.S. Postal Service may not try to eliminate just Saturday mail delivery if it follows recommendations from a consulting firm.

Recommendations outlined at a postal conference in Washington by McKinsey & Co. included more than 50 possible options the Postal Service could consider to address its swelling budget shortfall.

Among them was a recommendation to scale back mail delivery to as little as three to five days a week.

The report also recommends scaling back the number of post office locations across the country, noting the U.S. Postal Service currently has 36,500 retail locations, more than twice the number of McDonald's restaurant locations in the country. It says the average post office sees 600 weekly counter customers, one-tenth of the number of weekly customers at the average Walgreen's store.

The Postal Service is currently considering the closure of about 160 post office locations.

While the McKinsey & Co. report notes that privatizing the Postal Service is unlikely, it recommends expanded partnerships with private industry, like retail locations, and kiosks.

It also recommends restructuring of the Postal Service’s costly retiree health benefits program.

Many of the changes the report suggests and the Postal Service has said it was considering would require Congressional approval, including scaling back the number of days mail is delivered.

“Legislative and regulatory changes are necessary,” the consulting firm’s slide show stated, and “actions in any one area will not be enough to close the [budget] gap.”

Among other recommendations in the report would be ending doorstep delivery of mail and a shift to clustered mailboxes in residential areas, creating new products and services to increase revenue, and developing hybrid mail products that integrate electronic mail with Postal Service products and services.

The Postal Service posted a $3.8 billion loss in fiscal 2009 and has projected its annual loss will reach $7.8 billion in fiscal 2010.