FAIRHOPE, Ala. — The United States Postal Service is finding it necessary to cut back like the rest of us. Changes in the way people communicate, including short notes sent via e-mail, online social networking and instant messaging, along with the use of advanced electronic bill-paying services, are causing a sharp drop in the demand for what is now commonly referred to as snail mail.

Among the expenses on the chopping block are three downtown drop boxes. Scheduled to be removed March 17 are antique postal boxes mounted on posts at 335 Fairhope Ave. and 32 S. Section St., along with a snorkel box at Fairhope City Hall, 161 N. Section St.

All drop boxes at the downtown post office will remain in place, as will a standard box in front of the Eastern Shore Shopping Center on Greeno Road.

“They did density tests of those little boxes and they were getting about five pieces (of mail) a day on average, and the big boxes are getting 20 a day on average,” said Joseph Breckinridge, a U.S. Postal Service spokesman for Alabama and north Florida. He noted boxes are still considered viable if they receive around 25 pieces per day in the density tests, which typically run for two weeks.

Breckinridge said, “These days, everything is about cost. Mail volume has gone down precipitously. It peaked in 2006 when we had 213 billion pieces of mail (nationwide) for the year. This past year we had 177 billion. We think this loss is going to continue for the foreseeable future.”

According to the U.S. Postal Service’s annual report for the fiscal year that ended Sept. 30, the agency reported net losses of nearly $3.8 billion, $2.8 billion, and $5.1 billion for the 2009, 2008 and 2007 fiscal years, respectively. Regulators say these losses have placed unprecedented demands on the post office’s operating liquidity.

Its annual net increase in debt is limited by statute to $3 billion, and the total outstanding debt is limited to $15 billion. Officials currently project net debt outstanding at Sept. 30, 2010 to increase by $3 billion over the balance outstanding at Sept. 30, 2009 to $13.2 billion. Breckinridge said this is a shortfall of $1.2 billion.

To alleviate pressure on the postal service’s liquidity, Congress enacted legislation (P.L.111-68) to restructure the required $5.4 billion payment to the Postal Service Retiree Health Benefits Fund (PSRHBF), which was due on Sept. 30, 2009, reducing it to $1.4 billion. Had this legislation not been enacted, cash flow from operations would have been negative for the year ended Sept. 30, 2009 as well. This legislation did not, however, address future payments into the PSRHBF, including the $5.5 billion payment due in September 2010.

The report also indicates that a significant portion of the recent losses are attributable to unprecedented declines in mail volume that began in 2008, caused to a great degree by the widespread economic recession. The migration to electronic media has accelerated during the recession, adding to the decline of hard-copy mail.

The Fairhope Post Office is feeling the pinch as well.

Around 420,000 pieces of electronically sorted mail passed through the local facility in Oct. 2008. Last month, the volume was down to 280,000 pieces. Hand-sorted mail in Fairhope peaked at around 52,500 pieces in October 2007, and was down to 10,000 pieces in January 2010.

“People aren’t receiving their bills at home as much,” Breckinridge said. “They’re not using their mail to send their payments. Roughly fewer than 30 percent pay their bills online, but these numbers are growing as people retire (and die). These are hard realities we have to live with, and when it comes to (cost-savings), every little thing adds up.”

To meet the growing number of financial challenges it is facing this year, the Postal Service has reduced work hours across the system by 115 million in 2009 and by 28 million in the first quarter of 2010, and is continuing efforts to increase efficiency, reduce costs and generate new revenue.

These actions include a plan to reduce work hours by approximately 90 million in 2010, maximizing operational efficiencies, renegotiating contracts with major suppliers, halting construction of new facilities and continuing revenue generation efforts.

Although each of these efforts is expected to positively impact cash flow in 2010, they may not be sufficient to offset a possible cash shortfall this fall or beyond.

Among one of the more controversial measures proposed by postal officials is a request to Congress last year to remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week. They are continuing discussions on the matter.

But, even if a delivery day is eliminated this year, no significant savings are anticipated to be seen until 2011.

Breckinridge noted the cost of fuel, salaries and benefits have gone up, while at the same time revenue has declined. He said, “They must keep the system healthy and sustainable. We’re counting on people to put their mail out for their carrier to pick up.”

There are around 300,000 mailboxes on street corners and in front of shopping complexes and office parks across the country, Breckinridge said, and their numbers have been shrinking for the last decade. Although it might seem like no big deal to just keep the boxes where tourists drop postcards, he added, “It’s those tens of thousands of little things that add up.”

Asked about the small mailbox outside her downtown business, Karin Wilson, owner of Page & Palette, said last week, “I always see people using it. I hope they leave it up because it’s a convenience. I remember when they took it down the first time. We were inundated with complaints.”

The mail pickup time from the box remaining at the Eastern Shore Shopping Center is 9:30 a.m., Monday through Saturday.

Mail will be collected from boxes at the Fairhope Post Office at 12:30, 2:30 and 4:30 p.m., Monday through Friday; and 12:30, 2:30 and 3:30 p.m. on Saturday.

Breckinridge said comments are welcome about the changes. If you would like to pass along your thoughts about the reduction in the number of mailboxes in Fairhope, call Dennis Carter, acting postmaster, at (251) 990-3623. Carter will forward comments and concerns to the Birmingham district office.