All over the world, postal services are hemorrhaging red ink. They are being done in by the phone and the Internet. Yet their salvation is also the phone and the Internet. As commerce becomes e commerce, there is a high demand for reliable delivery services. In countries ranging from Korea to Sri Lanka the postal service is NOT reliable. And the Sri Lankan operation was losing over LKR 4 million a DAY back in 2005 (higher now, I’d guess). The day the post becomes reliable, through reform, the death spiral will stop, because there is a real need.
From India to Finland to America, postmen have fewer letters to deliver, meaning sharply lower profits or even losses for postal services. In the year to March 2008 India Post handled 6 billion pieces of ordinary post, down from over 15 billion at the start of the decade. First-class letters dropped by 9% in the first half of this year at Finland’s Itella; junk mail fell by 16%. America’s postal service is in crisis as volumes fall. It is expecting a third consecutive annual loss this year, after losing $2.8 billion in the year to September 2008.