[quote=CA renter]It’s a **service** industry. Of course most of their costs are labor-related!

The reason they are struggling, though, is because their market share is declining as electronic communication grows.[/quote]

Well the biggest reason their struggling is because they’re extremely handicapped by government regulation over how they can right size their business. If FedEx or UPS see declining business they can layoff workers. They can choose to exit markets that operate at a loss. It’s the inflexibility placed upon the post office from the unions on one side and the government regulations on the other.

The biggest problem with most public sector business is that they can’t improve their labor costs with efficiency because it’s difficult to lay people off. Your water/sewer bill use to require a small army of people to open and process the mail each day. About 15 years ago they got a machine to process mail automatically which cost quite a bit of money but they didn’t layoff that previous army of workers to see the cost savings. They just moved them into other jobs whether they needed them or not. Maybe that was a nice thing to do but it certainly wasn’t an efficient use of tax payer dollars.