The U.S. Postal Service's (USPS) financial condition has worsened since GAO testified before this Subcommittee last January, with the recession and changing mail use causing dramatic declines in mail volume and revenues despite postal rate increases. USPS expects these declines to lead to losses and cash shortfalls even if ambitious cost-cutting is achieved. Mail use has been changing over the past decade as businesses and consumers have moved to electronic communication and payment alternatives. Mail volume peaked in 2006, and USPS expects that much of the lost volume will not return after the recession is over. USPS's business model has relied on growth in mail volume to cover costs, but USPS has not been able to cut costs fast enough to offset the accelerated decline in mail volume and revenue. Thus, GAO added USPS's financial condition to the High-Risk List in July 2009. This testimony (1) updates USPS's financial condition and outlook and explains GAO's decision to place USPS's financial condition on the High-Risk List and (2) discusses the need for USPS to restructure and presents options and actions that USPS can take. It is based on GAO's past and ongoing work.
Below are the reports in this series:
High-Risk Series: An Update GAO-09-271, January 2009
High-Risk Series: Restructuring the U.S. Postal Service to Achieve Sustainable Financial Viability GAO-09-937SP, July 28, 2009
High-Risk Series: U.S. Postal Service: Restructuring Urgently Needed to Achieve Financial Viability GAO-09-958T, August 6, 2009