The PO has several key issues at the moment: 1. As mentioned prior - the pension contribution rules are pretty nonsensical, having to prefund at the rates they do is not sensible and does add cost. But, that is not the only issue they have nor the only pension "cost issue". The reality is that the pension payment amounts to former employees themselves is very excessive and not market based - this is due in part to political intervention and allowances. It's not much different than what major city unions have been able to negotiate over the years due to political pandering. At some point the piper has to be paid and city governments realize they can't afford it. 2. There are many work rules etc. that create inefficiency and excessive costs - that does not have to happen. 3. The volume mix at the PO has change dramatically in the last 10 years.
First class mail has gone from 50% of their volume 2009 to just 34% in 2019. Those are small envelops that don't take up a lot of room and have sheer density per stop. On the other hand their "packages" have gone from 15% of volume in 2009 to 32% in 2019. That is huge as well - these take up more room. One related issue to that is that they truly may not be charging enough for those pkgs and that is partially the fault of the government. In essence the governmental rules are artificially holding the rates at the PO lower than what they should be.