Postal Service faces new challenges

Even with postage rates going up, the Postal Service expects a deficit this year as struggles with a swiftly changing communications market, Postmaster General John Potter said Tuesday.
“The dynamics of the 21st century communications market have altered — forever — the basic assumptions of postal economics,” Potter said in remarks prepared for the House Oversight and Government Reform postal subcommittee.

The rapid growth of electronics communications have resulted in declines in lucrative first-class mail, though lower-cost advertising mail continues to increase.

In addition, private companies have taken a growing share of the package and rapid delivery market.

“Competition exists for every piece of mail that we move through our system,” Potter said.