Are the Days of Letter Delivery Numbered?

[PeterRS]

I can recall a time in Hong Kong the early 1980s when I posted an air mail letter to my mother in the provinces of the UK at lunchtime on a Monday and received her reply on the first mail delivery on the Saturday, just five days later. We all know that postal services almost everywhere have been cut back massively since then and become a great deal more expensive. Now the end of a state run postal service may be on the horizon. From Tuesday next week, Denmark is stopping its 400-year old postal service and will cease all mail delivery. Since July it has been dismantling all its mail boxes and selling them off to willing buyers. It will, though, continue to deliver parcels. 

Apart from costs increasing, the Denmark Postal Service points out that the service delivered 90% less mail in 2024 than in 2020. This compares to a drop in the USA of 50% betwen 2006 and 2024. In future, Danes wishing to mail letters will have to do so by dropping them off at special kiosks in shops where they will be handled and then delivered by a private company, no doubt at greater expense. The company will collect letters from individual homes, but payment has to be made electronically! While the new arrangement will affect only a few people, the elderly will clearly be disadvantaged.

The CNN article points out that almost 2.6 billion people around the world remain offline. So the new Danish system is likely to be adopted by only a few countries. But it may herald the longer term future of mail deliveries. 

https://edition.cnn.com/2025/12/30/europe/denmark-postal-service-letters-intl-scli

[Olddaddy]

Letters yes 

But ..speaking to my postman who delivered to my building today in Sydney he says he is very busy ..they had to employ an additional postman over Xmas because of parcels ...Temu etc 

I think Amazon however use private couriers not the postal service

[vinapu]

1 hour ago, PeterRS said:

Apart from costs increasing, the Denmark Postal Service points out that the service delivered 90% less mail in 2024 than in 2020. This compares to a drop in the USA of 50% betwen 2006 and 2024.

it must be true. Last summer I was tasked with emptying mail box of my friend who went for 3 months long vacation. Total number of pieces of mail he received in that period was FIVE, all bank statements.

Likely other countries will be watching closely how Danish experiment will play. I consider myself heavy user of postal services but even I think twice a week pick up and delivery would be sufficient.

On another hand all that rush to digitize our affairs will have sad consequences when we start losing our faculties, forgetting first passwords, then even in what bank our money is . If no records of those  will be left somewhere I don't envy executors or people taking care of their  loved ones with dementia.

 

[floridarob]

47 minutes ago, vinapu said:

I consider myself heavy user of postal services

Your stamp collection is well documented 🧐

[jimmie50]

Sooner or later the US Postal Service is going to be forced to cut back on daily deliveries.  Just this week I read an article that said they are $9 billion dollars in the red.  They find themselves in a 'catch-22' situation.  They have had a lucrative contract with Amazon for a number of years and Amazon has been trying to negotiate an extension of the current agreement for over a year.  Amazon uses private and public delivery services, as well as their own trucks, depending on location.  USPS has decided to put some delivery services up for auction, which was a surprise to Amazon.  By doing so, the USPS is taking a huge risk that Amazon will take their business elsewhere which would cause even more financial difficulties.  Kind of a no win situation for USPS.  

https://www.cnn.com/2025/12/24/business/usps-amazon-deal

I don't see how USPS can realistically continue to provide delivery service to every household six days a week given the high cost of operating and the reduced volume.  Just doesn't make good business sense.  However, I also don't think they can completely eliminate the service like Denmark.  I imagine there would be a huge public outcry if they tried to do that here.  

[floridarob]

From Google:



Why the USPS Loses Money

The U.S. Postal Service isn’t a typical business. By law, it must behave like a business and a public utility at the same time. That creates built-in conflicts.

Here are the biggest structural money-losers:

1. The Universal Service Obligation (USO)

USPS must deliver to every address in America, no matter how remote, at the same price.
Private carriers (UPS, FedEx) do not do that. They charge extra for rural, remote, or hard-to-access locations.

USPS can’t opt out. That obligation costs billions a year.

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2. Congress Controls Prices

The Postal Service cannot independently raise postage prices like a normal business could.
Price increases require regulatory approval and are tightly capped by law, meaning revenue cannot grow as fast as costs.

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3. Declining First-Class Mail

First-class mail (bills, letters, cards) used to be the profit engine of USPS.
Now it’s been collapsing for 20 years because of email, online bill-pay, digital everything.

Packages help, but margins are lower and Amazon negotiates very good rates.

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4. Competition is Allowed to Cherry-Pick

UPS and FedEx only compete in profitable segments.
USPS must handle the expensive categories they avoid.

So USPS subsidizes a high-cost network without the higher-margin flexibility its competitors enjoy.

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5. Congress-Imposed Financial Burdens

This is the one that almost no other organization in the country faces.

The infamous pre-funding mandate

Passed in 2006, the Postal Accountability and Enhancement Act forced USPS to:

→ Pre-fund 75 years of future retiree health benefits

Not pensions, but healthcare.
And to pre-pay them in a 10-year window.

No other federal agency or private company in the U.S. has ever been required to do this.

For years, this mandate alone turned what would have been operational profits into billions in losses.

Partially repealed in 2022, but the financial damage lingers.

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Would allowing USPS to offer banking services help?

Absolutely. And it’s not a new idea.

Most countries’ postal systems offer banking:

• Japan Post Bank

• La Banque Postale (France)

• Royal Mail-backed banking (UK)

• Brazil, Italy, Germany… the list goes on

These banks:

• generate steady revenue

• serve low-income and rural communities

• reduce dependence on taxpayer bailouts

USPS used to offer simple banking from 1911 to 1967 and it was wildly successful.

If USPS could again offer:

• bill payment

• small loans

• check cashing

• money transfers

• savings accounts

…it would create a stable, profitable revenue stream and reduce predatory lending in poor communities.

Congress has blocked it under lobbying pressure.

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Would removing the pre-funding requirement help?

It already did. When Congress finally rolled it back in 2022:

• USPS wiped away over $50 billion in paper losses

• Annual financial pressure dropped dramatically

But the damage from 15 years of impossible obligations hasn’t fully evaporated.

Removing it earlier would have changed the entire financial trajectory of the USPS.

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Bottom Line

USPS loses money because Congress set it up with contradictory missions and financial handcuffs.

If the Postal Service was allowed to:

• operate more like a business in pricing,

• drop the outrageous pre-funding mandate,

• expand into simple banking,

• and modernize revenue streams…

…it would likely be profitable or close to break-even.

The problem isn’t incompetence.
The problem is Congress.