Why is USPS not making money?

Ateneo Professor on Entrepreneurship

From Slate by Brian Palmer | Feb 7, 2013

Our knee jerk answer is that government agencies are poor business entitities.  Last week, USPS is stopping its Saturday delivery services because the move will save it $2 billion annually.  In the fiscal year ended 2012, it lost $l5.9 billion.

Why did it lose money?

l.  It was a monopoly;

2.  As a monopoly, it was tightly regulated and has to seek approval everytime it changed its business model;

3.  It did not cope up the changing time. It sold below cost its then very profitable first class mail service - did not recognize the rising cost of health care cost and fuel.

USPS could be made more profitable if it were privatized and behaved just like a private company. The European mail carriers have been privatized and have teamed up with DHL and have become profitable.