E-mail dogs Postal plans

Like a sharp-fanged mutt, the Internet is nipping away at the U.S. Postal

Service, and the bites are beginning to hurt.

In a newly published five-year plan, the Postal Service warns that its

economic future is threatened by the increasing use of e-mail in place of

first-class letters, for billing and bill paying, and even as a replacement

for junk mail.

If e-mail and other types of electronic transactions establish a firm

tooth hold, the result could be a financial crisis that threatens the Postal

Service's ability to continue universal delivery service, according to the

plan signed by Postmaster General William Henderson.

"Home computer ownership, electronic communication networks and the

changing nature of personal correspondence threaten traditional letter mail,"

the Postal Service reported. E-mail is especially threatening to one of

its most lucrative services — the delivery of bills and bill payments.

Bills, statements and payments make up nearly half of the 102 billion

pieces of mail the Postal Service handles annually, and they generate about

$17 billion of the agency's $70 billion yearly revenue.

By 2004, e-mail, electronic funds transfers and other substitutes for

traditional mail are expected to cause the volume of paper mail to decrease

by 2 percent. "This apparently small change would have a significant impact"

on the Postal Service, which by law must not operate at a loss, the plan

stated.

The decline "grows significantly" from there, according to Postal Service

projections.

The trend is so certain that for the first time, the Postal Service

has adopted a long-range plan that does not assume that mail volume will

continue to increase as the economy grows. Instead, it warns that declining

mail volumes "could threaten the foundations of the business model" the

Postal Service has followed for three decades. This gloomy vision of the

future was presented to Congress Oct. 3, where it was greeted by Rep. John

McHugh (R-N.Y.) as "pretty realistic." The plan shows that the Postal Service

is aware of the challenges it faces, said McHugh, who heads the House Postal

Service Subcommittee.