Summary: This testimony discusses the challenges facing the U.S. Postal Service. Overall the Service faces major challenges that collectively call for a structural transformation if it is to remain viable in the 21st century. The Service's financial outlook has worsened, and it is not clear how the Service will address its mounting financial difficulties and other challenges. These challenges include (1) reduced net income, (2) increased debt, (3) increased competition, (3) management-labor relations problems, and (4) statutory restrictions. Because of the Service's rapidly deteriorating financial situation, GAO is placing the Service on its high-risk list. GAO believes that several actions need to be taken to address the Service's continued problems. Such actions include (1) developing a comprehensive plan to address the financial, operational, and human capital challenges; (2) providing quarterly financial reports to Congress and the public; and (3) identifying, in conjunction with GAO and other stakeholders, improvement options that will cut costs and improve productivity.
