Is Snail Mail Doomed?

The U.S. Postal Service is busier than ever. It just completed a record year in which it brought in more than $62 billion and turned a $100 million profit. It handles more than 500 million letters a day.

But it's a success story that may not last, as CBS News Correspondent Lee Cowan explains.

The explosion of electronic mail and commerce is expected to get so intense in the next ten years that it could mean the end of door-to-door, universal mail delivery.

The General Accounting Office predicts that so many people will be using computers instead of mailboxes in the next millenium that the Postal Service may have to make serious cuts.

It's because more than half its revenue comes from first class mail such as bill payments. But by the year 2003, the GAO estimates that most people will be paying online instead, beginning a gradual decline in mail volume that could cost the Post Office as much as $17 billion a year.

For the first time, the Postal Service will not grow as the nation does. It will actually shrink in terms of the amount of business it carries and the amount of revenue earned off of it.

That means the survival of the local post office could be in jeopardy, unless customers agree to pay higher and higher postal rates. Or the Postal Service will have to learn to compete in the "e-age."

The Postal Service isn't giving up.

"We'll be there, we've always been there, and that's what we do, we deliver," Krause explains. "Just think, for example, if we were to create a second form of free delivery for every American--just like Americans have come to enjoy and trust the mailbox outside their home--but inside their home, electroncially. For us the key word is trust."

The Postal Service is fighting the clock. It has caught up to technology before. Now, the question is: Can it do it again?