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Business

U.S. Postal Service Getting the Message Amid ‘New Reality’ of Electronic Communication

Santa Barbara's Victoria Court Station among post offices facing closure, while RightSignature signs on as a 'small contributor' in the evolution of mail delivery

The U.S. Postal Service has acknowledged it must face a “new reality” that in part has become necessary because of electronic forms of communication.

“We are forced to face a new reality today,” Postmaster General Patrick Donahoe said. “With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic. Since 2006, we have closed 186 facilities, removed more than 1,500 pieces of mail processing equipment, decreased employee complement by more than 110,000 through attrition and reduced costs by $12 billion.”

RightSignature of Santa Barbara has had a direct effect on traditional forms of mail delivery. It enables businesses to prepare and sign documents online so they can close more deals in less time, reduce paper and ink expenses, minimize environmental impact and avoid fax hassles. The company has grown 100 percent to 250 percent each of the past three years it has been in business, according to co-founder Daryl Bernstein.

“I think we are a small contributor to the evolution of mail delivery. We have a very large customer base who used to send thousands of FedEx packages a day but now use RightSignature instead,” he said. “It has a very significant impact on traditional paper transport. At the end of the day, it’s not great for the Postal Service or FedEx, but awfully good for businesses like us and the environment.”

Although advertising catalogs and magazines are difficult to replicate online, it’s only a matter of time until the technology catches up, Bernstein said.

“I think mail delivery is such an inherently expensive business that in 10 years-plus there won’t be enough uses left that make sense for paper delivery,” he said. ”There are too many great technology tools.”

Seattle-based Doxo is a digital file cabinet that helps consumers organize household accounts, store important documents and pay bills online.

Traditional pieces of mail are being replaced through online communication as people get more comfortable sending and receiving information digitally, said Stephanie Camp, Doxo’s director of marketing. She said people still rely on paper documents for archiving, as a reminder to pay bills and as a force of habit, but that is changing.

“Certainly there is a shift from paper to digital methods; you can see it in media today,” Camp said. “People are getting more comfortable using information digitally. Think of all the things you used to like getting in the mailbox, like party invites and letters. Now, 60 percent of physical mail received is unsolicited.”

Mail volume has declined by more than 43 billion pieces in the past five years and is continuing to decline. The U.S. Postal Service will be reviewing about 250 mail processing sites, including the Victoria Court Station, 1221 State St. in Santa Barbara, for possible closure and is facing $10 billion in losses come Sept. 30.

But the Postal Service’s main source of financial distress hasn’t come from online competition, according to Sally Davidow, a spokeswoman for the American Postal Workers Union. She said Congress needs to lift the requirement that the Postal Service prepay $5.5 billion in retiree health benefits each year.

“The situation is serious,” Davidow said. “We’re hopeful a solution can be found. A lot of people dismiss the Postal Service because of email, but you have to recognize its important role in the economy. It’s the center of a $1 trillion industry that businesses rely on to deliver their products and messages.”

President Barack Obama’s proposal revealed this week would allow the agency to end Saturday mail delivery, sell nonpostal products and raise stamp prices. The plan would also restructure the benefit plan and refund $6.9 billion the mail carrier says it overpaid into a federal retirement fund.

Davidow said she doesn’t think a change to services is the solution.

“The Postal Service does have to find a way to change their method of communication and business and find a way to remain relevant,” she said. “The agency is the face of the government. It has adapted many times over its 236-year history and has found a way to make itself relevant when innovations like the phone and faxes came along.” 

Bernstein said the Postal Service is the world’s largest single organization, and it isn’t going to change quickly.

“The larger you get, the harder it is to make a 180-degree pivot when the world changes,” he said.

Noozhawk business writer Alex Kacik can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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