It's not that they aren't competitive. It's that the demand for their entire industry has dropped, and their bosses are actively trying to screw them up.
There's more package traffic than ever. What has dropped is the sending of junk mail (in letter and catalog form). What has increased is the sending of packages. USPS has now upped its rates on those, and can't even do that right. Amazon just changed our local delivery from USPS to Fedex, and according to the user support person I talked to, they'd had a lot of issues with USPS. Packages go missing on a routine basis, where they don't with UPS and FedEx.
In the meantime, let's go down to our local post office. At any hour of the day, there is one person on duty at the desk. Laughter, music and conversation flow from the back room. Checking my PO box, I refile yet another two misdirected envelopes.
The problem with USPS is that it can't reduce its cost. There are many anti-business factors here, but the two biggest are (a) unions and (b) feelgood government regulation.
Here are mainstream published sources that agree with me and which would be voted -1, Troll here on Slashdot by the feelgood social emotions hive mind:
Free the Post Office!, by Joe Nocera
Postal Service To Default On $5.5 Billion Payment As Congress Heads Into Recess, by Dave Jamieson
Notice how these are both consistent with what I posted.
I realize that unions and affirmative action are sacred cows around here, but from a business standpoint, that's nonsense. Unions raise costs and make it impossible to fire employees who need to go. Affirmative action makes it impossible to fire employees who are from any protected group, which includes homosexuals, ethnic minorities, religious minorities, gender minorities (women/trans), and probably many more. Attacking affirmative action does not say "these people are incompetent," which would require all of them to be incompetent, but by the same token it says that neither are they all competent, and we need the ability to drop the incompetent ones.
This society does itself a disfavor by producing myths and illusions that are then viewed as an attack on The People if they are broached. This makes us just as much lock-step conformist as a totalitarian regime, and makes us unable to view the realistic solutions we need to in order to save things like our Postal Service.