U.S. government right-sizing: Will your local post office be closed?

First, although the Postal Service has been criticized for lack of efficiency, the bulk of its woes stem from the fact that it must provide universal service: it has to deliver and receive mail from everywhere in the U.S. -- even those neighborhoods that are high-cost or even dangerous -- ones where no private company would service. The Postal Service also has to deliver to small towns and rural areas.

In other words, it would real easy to run a profitable mail business if you just don't service high-cost areas.

Post Office: Higher rates would help

Second, postal rates for next-day, and 2-day/3-day mail are set pretty low: if they were aloud to rise to market rates -- the maximum the market would bear -- that would improve the revenue side of the equation. Just imagine how much dough the Postal Service would collect if they could charge the maximum the market would bear for those far-flung outlets and rural addresses?

Also, if the Postal Service closes post offices, many post offices will close in small towns and rural areas dominated by Republicans and conservatives, many of whom will no-doubt protest the closing.

And how ironic would that be? Republicans and conservatives favoring an inefficient government spending program? Republicans and conservatives wanting to keep money-losing government entities open? That goes against everything conservatives stand for. Philosophically, they won't have a leg to stand on.

To underscore, the Postal Service case study highlights an axiom regarding profitability. If you want a decent chance at profitability, make sure you exclude those customers that you can't earn a profit on. Just get rid of 'em. However, once something becomes "a right" and/or you have to provide a service universally, your organization's profitability is likely to decrease.