E-business shortchanges USPS

"U.S. Postal Service: Postal Activities and Laws Related to Electronic Commerce"

The problem is, the check isn't in the mail. Businesses and the federal

government are increasingly relying on electronic transactions, and it's

devastating the U.S. Postal Service.

This year the mail carrier expects to lose $300 million. More than half

of that — about $180 million in lost revenue — is due to half a billion

checks the federal government has decided to deliver electronically rather

than through the mail.

The government isn't the only postal customer cutting back. Banks reduced

their mail volume by 18 percent from 1996 to 1999, according to the American

Bankers Association, and businesses are encouraging their customers to pay

their bills online.

It probably will get worse. The Postal Service is predicting "substantial

declines" in the volume of first-class mail over the next decade. According

to the General Accounting Office, the anticipated revenue losses could make

it difficult for the mail service to perform its primary function of providing

the nation with universal postal service at reasonable rates.

But the switch to electronic transfers has positives as well as negatives.

"Online sales are expected to grow substantially over the next few years,

which would entail a dramatic rise in parcel shipments and returns," GAO

auditors reported. Unfortunately for the Postal Service, parcel post faces

competition from UPS and FedEx Corp.