USPS in trouble

[fulano]

There is a lot wrong with the Post Office no doubt. But with that said, what about rural areas and the delivery of their mail? ....

As for the rural area argument, my kids live in the heart of the "banjo music" area of SW Missouri. They have telephone, cable and internet service, even though the house they live in resembles the one on "Green Acres". If you're really that far out in the sticks, how are you posting here?

UPS and Fedex manage to deliver everywhere. The issue is "what does it really cost to deliver a first class piece of mail?"

UPS and Fed don't deliver junk mail that is immediately thrown in the trash/recycle. If they deliver it; they make a profit. So far, Capitial One isn't paying either of them to flood my mailbox with applications for free money.

The founding fathers never imagined that their USPS would be forced to carry junk to people who are not allowed to 'opt-out'. The old scene of the postman with a bag on his shoulder walking door to door is a joke today. He/she has to park at the end of the block just to carry a bag of junk to a dozen houses.... How does this continue work.

I buy and sell things over the internet and do a lot of shipping. I'm not arguing the philosophical issues here, but as a practical matter, I choose the USPS over UPS and Fedex whenever I have the option. For one thing, the USPS is way cheaper. I had to ship something to Japan last week and the cheapest rate I could get from UPS or Fedex was about $70, versus $32 for the same service from the USPS. Since I was only getting $32 for shipping I would have lost money shipping by UPS or Fedex. I've also found that standard shipping via the USPS is normally faster than standard shipping via UPS. Furthermore, I've shipped hundreds of packages by the USPS without a single screwed up delivery, with quite a few packages going overseas. I use them infrequently yet both UPS and Fedex have screwed up important deliveries for me multiple times. Most recently UPS left a package for my son on the sidewalk outside his apartment building in South Chicago --needless to say, he never got it-- and getting the situation fixed was a major hassle.

I agree with your experiences. My daughter lived in the UK for 3 years and USPS was the only way to go.

Unfortunately, they are losing money and you and I are taking advantage of the fact that they don't charge enough money to break even much less make a profit.

I think we are going to either see a complete nationalization of the post office (now its is kinda like Fannie and Freddie in that it is not a purely independent nor purely nationalized) or the business will move to private companies.

If privatization occurs, your flow of catalogs that you don't order and credit card applications that you throw away will dwindle because this stuff chokes the postal service and bloats it with employees and machines to handle the crush of paper virtually for free.

Sounds like $5B is the price tag for low cost delivery.

[sjfcontrol]

I agree with your experiences. My daughter lived in the UK for 3 years and USPS was the only way to go.

Unfortunately, they are losing money and you and I are taking advantage of the fact that they don't charge enough money to break even much less make a profit.

I think we are going to either see a complete nationalization of the post office (now its is kinda like Fannie and Freddie in that it is not a purely independent nor purely nationalized) or the business will move to private companies.

If privatization occurs, your flow of catalogs that you don't order and credit card applications that you throw away will dwindle because this stuff chokes the postal service and bloats it with employees and machines to handle the crush of paper virtually for free.

Sounds like $5B is the price tag for low cost delivery.

The USPS was a government agency until the 1980's, when it was made semi-independent.
Also, it is my understanding that it is the bulk-mailing rates that subsidizes a lower 1st class rate. I think referring to delivery of bulk-mail as "virtually for free" is a mischaracterization.

[fulano]

I agree with your experiences. My daughter lived in the UK for 3 years and USPS was the only way to go.

Unfortunately, they are losing money and you and I are taking advantage of the fact that they don't charge enough money to break even much less make a profit.

I think we are going to either see a complete nationalization of the post office (now its is kinda like Fannie and Freddie in that it is not a purely independent nor purely nationalized) or the business will move to private companies.

If privatization occurs, your flow of catalogs that you don't order and credit card applications that you throw away will dwindle because this stuff chokes the postal service and bloats it with employees and machines to handle the crush of paper virtually for free.

Sounds like $5B is the price tag for low cost delivery.

The USPS was a government agency until the 1980's, when it was made semi-independent.
Also, it is my understanding that it is the bulk-mailing rates that subsidizes a lower 1st class rate. I think referring to delivery of bulk-mail as "virtually for free" is a mischaracterization.

I could be extreme but its the internet and everyone is an expert so I apologize for acting like one too.

IMHO...
Its the first class mail that has been providing the "profit" (make more than you spend) for the USPS for many years.

The pressure on the 1st class mail business began with electronic delivery with the emergence of FAX after deregulation of the Bell System in the early '80's. Electronic mail assaulted it next and the shift from 1st class has moved drastically in the last 10 years as dialup has been replaced by high speed.

It is a sea change that can't be resisted. Someone earlier in the thread drew the analogy to 'buggy whips'...colorful and not far from the mark.

I had a chat with the postmaster of a large zip code near you one afternoon when the line was only me. He said the presorted mail business supplies the volume to allow them to employ many folks. His point was "this stuff you call junk (and he was indignant) is what keeps us employed." He never mentioned profit.

My point is that times have changed. Neither the 1st class nor the presort makes money for the current rates charged by USPS. If 1st class rates are raised; the volume will fall faster...classic capitalism. Also, If presorted mail was a profit maker, UPS and Fedex would be trying to take the business away from the USPS.

I think the future is a much smaller USPS and a lot of unhappy postal retirees.

[RockingRook]

When and if the USPS goes out of business is difficult to speculate. I really think that the private sector can do
a better job delivering the mail. UPS and Fed Ex do quite well delivering packages so why can't they do the same for
mail service? They would probably do away with Saturday delivery, something that the USPS has been contemplating/threatening to do for
years. I for one, think we do not need 6 day delivery.

As in most govt. run businesses the USPS has a big overhead of salaries for "management" personnel. I am sure that if a private company takes
over they would trim the overhead and maybe keep the price of postage stable.

Fed Ex and UPS could form a company to deliver only the mail. I have a name for this new company, it could be called Fed UP!!

Chuck

[sjfcontrol]

Yes, I was the one with the buggy whip reference.

A smaller USPS not only will disappoint it's retirees, but the vast majority of people who will be no longer serviced. It will continue to shrink and disappoint as it continues to lose money, and as people learn how to exist without it. I see its days as limited, and resist the notion that it is another institution that is "to large to fail". We don't need any more bailouts -- especially of government (or semi-government) agencies.

[sjfcontrol]

Fed Ex and UPS could form a company to deliver only the mail. I have a name for this new company, it could be called Fed UP!!

Chuck

Hmmm, a Perry fan!

[VMI77]

Furthermore, I've shipped hundreds of packages by the USPS without a single screwed up delivery, with quite a few packages going overseas.

I would submit that the USPS is not responsible for either correct or incorrect deliveries overseas.

Yes, but they are responsible up to the point where the delivery is handed off the the foreign carrier. Surprisingly, so far, I've never had a foreign carrier screw up a delivery, but then I'm only looking at something under 50 total deliveries overseas versus hundreds domestically.

[VMI77]

I really think that the private sector can do a better job delivering the mail. UPS and Fed Ex do quite well delivering packages so why can't they do the same for
mail service?

Maybe --we haven't seen what the private sector can do with mail delivery. But I ship and receive lots of packages and I prefer the USPS because I find it to be cheaper and more reliable than UPS and Fedex. In my experience the USPS has screwed up fewer of my deliveries than either of the private carriers.

[fulano]

Well, the USPS offers a targeted junk service to businesses, which makes it simple for whole communities to be designated to get wonderful catalogs they didn't want or ask for. The agency is hard up for money and wants to expand the services it can offer the corporate environment. It is said that the cost of junk mail for everyone else is considerable, thought it deliberately brings revenue for the USPS. A non-profit devoted to recycling and reducing the amount of junk mail the typical American receives, it costs more than $320 million for municipalities to dispose of the 41 pounds of junk mail the typical person receives per year, that is according to 41pounds.org. It also costs $550 million to transport it and 100 million trees’ worth of paper is required to create it. Source of article: Postal Service offering targeted junk mail service to businesses.

Welcome aboard. Quite an old thread but still of interest to me.

I think 41 pounds is a low number. That's less than a quarter pound a day and I can tell you I get more than that. Just the mail from Capital One would total 41 pounds a year and there are only three people who receive mail at our address. Imagine a family of five!! (BTW the NRA is getting pretty bad with junk mail...I need to find that online button on my account that will let me opt out of promos)

Its ridiculous. As usual, its one of those extremes in business/government that will only end with a big bang when the bubble burst after a continued shift to electronic delivery and there is little or nothing else delivered. Then maybe an entrepreneur offers a way out....some way to unplug from the federal requirement that we "have" to have a postal address, then a test in court.

Another one for the Supreme Court after they get done with health care.

[Keith B]

Well, the USPS offers a targeted junk service to businesses, which makes it simple for whole communities to be designated to get wonderful catalogs they didn't want or ask for. The agency is hard up for money and wants to expand the services it can offer the corporate environment. It is said that the cost of junk mail for everyone else is considerable, thought it deliberately brings revenue for the USPS. A non-profit devoted to recycling and reducing the amount of junk mail the typical American receives, it costs more than $320 million for municipalities to dispose of the 41 pounds of junk mail the typical person receives per year, that is according to 41pounds.org. It also costs $550 million to transport it and 100 million trees’ worth of paper is required to create it. Source of article: Postal Service offering targeted junk mail service to businesses.

Welcome aboard. Quite an old thread but still of interest to me.

I think 41 pounds is a low number. That's less than a quarter pound a day and I can tell you I get more than that. Just the mail from Capital One would total 41 pounds a year and there are only three people who receive mail at our address. Imagine a family of five!! (BTW the NRA is getting pretty bad with junk mail...I need to find that online button on my account that will let me opt out of promos)

Its ridiculous. As usual, its one of those extremes in business/government that will only end with a big bang when the bubble burst after a continued shift to electronic delivery and there is little or nothing else delivered. Then maybe an entrepreneur offers a way out....some way to unplug from the federal requirement that we "have" to have a postal address, then a test in court.

Another one for the Supreme Court after they get done with health care.

It was a SPAMMER posting. They have been removed.

[The Annoyed Man]

There is a lot wrong with the Post Office no doubt. But with that said, what about rural areas and the delivery of their mail? I was raised in the Panhandle and I don't see other services going to go there to deliver mail. Not everyone has a computer or email and I don't think one should rely on technology for their information. Although I also see that the Post Office is planning on shutting down many rural area post offices. It seems everyone forgets those who live outside the cities or large built up areas.

The Post Office is one of the few government agencies required by the constitution, to whit:

Section 8.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
(Removed the prior and after clauses) To establish Post Offices and post Roads;

Get rid of some of those other alphabet agencies and fix/keep that which is, one provided for by the constitution and two provides a service to those outside of the cities.

"Have the power to" does not equal "required to." I have the power to drink myself to death. I'm not required to do it. Using the wording of the Constitution, Congress may also elect NOT to establish post offices. Similarly, Congress has the power to raise taxes. That doesn't mean that it is required to do so. You're making an incorrect assertion.

Quoting the article in the OP:

The post office is in a bind, wrenched by fast-declining revenue and costs that can't be shed fast enough.

"Our situation is extremely serious," postmaster general Patrick R. Donahoe told the New York Times. "If Congress doesn't act, we will default."

I have a better idea..... How about if Congress doesn't act and the USPS stops treating taxpayers like a cash cow? How about if it declares bankruptcy, giving it the authority to dispense with its union contracts........just like any other business might do? Then, Congress (and by extension, you and I) are not on the hook for pumping tax dollars into a failing institution, which is failing for not keeping costs under control. To make use of your reference to rural areas, when the postal system was first instituted, MOST Americans did not live near a post office, and MOST Americans did not have a letter carrier delivering their mail to their front doors. With today's technology, it is relatively easy to get a satellite Internet connection anywhere in the U.S., and the cost is far cheaper than the cost to the taxpayers of keeping failing post offices open, union contracts in force, and unrealistic pension plans. It would actually be cheaper for the government to put more communications satellites into space than it would be to continue bailing out the postal system. Then it can charge a small basic monthly fee for access to those satellites. And by the way, this would give customers some control over "junk mail," through the use of SPAM filters.....which is something the current postal system does not really afford its citizen customers. In fact, the USPS exists today primarily as a distributor of junk mail. If you eliminated all junk mail customers from the system, the number of actual person-to-person communications, whether personal or business, would represent a small percentage of the total currently being mailed through the system.

I would submit that you can't make a cost/benefit analysis supporting your position which doesn't penalize everyone else. There is a reason that the postal system was not set up as a department of the government. The fact is, technology has rendered the postal system obsolete. READ THIS WIKI ARTICLE ABOUT THE GERMAN POSTAL SYSTEM. Germany privatized its postal system in 1995, and it is operated by DHL.....the same DHL which competes with FedEx and UPS here in the U.S. The American postal system should be privatized. If it winds up costing rural residents a lot more money to have postal services, then they will have a financial incentive to invest in technology. The monthly cost of a satellite connection is not that much. The purchase price of an inexpensive e-machine is not that much. In a world in which welfare recipients own big screen TVs and have cable service, it is very hard to imagine that a working farmer could not afford a monthly satellite Internet connection fee. It is increasingly difficult to justify supporting failing institutions in this economy. The only way it CAN be justified is if it becomes competitive in the marketplace.

[i8godzilla]

In TAM's post he brought up the rural route. My mail route is considered a RR and my mailbox is about a mile from where we live. Anything that does not fit into the box or requires a signature forces me to drive almost 20 miles one-way to get it. Additionally, with the box so far away it is not the place I want anything sensitive delivered. I have a private mailbox at a UPS store. Every Thursday my mail is boxed up (the UPS store filters out obvious junk mail) and delivered to my front door by the brown truck. It is sent Ground and normally arrives on Friday. The cost of the mailbox and delivery amount to almost $100.00 a month. There are thousands of folks like me that would more than likely pay the USPS to provide this service if they can do it at a lower costs. In our electronic/digital world I have no need to have mail delivery six days a week. Once or twice a week (just like trash service) is more than sufficient. Most new subdivisions now have cluster boxes. While older subdivisions still have curb or front door service. (My mother's house in FL still has a box by the front door and the postal delivery person must get out of the truck an put it in her box.) The cluster boxes mean one stop for the delivery and reduce labor and fuel costs. Why is this okay for newer homes and not older subdivisions?

For items that I ship from my small hanggliding company I use the USPS. The flat rate boxes make it simple to predict shipping costs and the box is included in the cost of the shipping. Since I purchase and print the postage online it comes at a reduced rate from the published rate. The cost for me to ship a custom made bag through the USPS is about 50% the costs of using UPS/FedEx. The challenge is 'catching' the postal delivery vehicle so that I do not have to drive into town. Since the mail is normally delivered about the same time of day I have a pretty good success rate.

[Rex B]

I think we need the USPS, but not in it's present form. It has bloated union contracts and employees that can't be fired.
Maybe it needs to fail to divest itself of those contracts, then it needs a complete reorganization.

[surprise_i'm_armed]

Does anyone know if the USPS HAS sufficient revenue to conduct its operations, but the money is siphoned off to
the general fund, or elsewhere?

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I know a friend who works for the USPS in a Dallas suburb. His PO has a husband/wife team who are the maintenance
people for the building. One or both of them makes $65,000 a year for doing "not much". Although it's not clear if
it was authorized, their little maintenance building in back of the main building was equipped with A/C, radio, and TV.
My friend says they change a few light bulbs and other minor duties, but spend a lot of time listening to the radio and watching
TV in their little Shangri-la. Your tax dollars at work. NOT.
************************************************************************************************************
Someone in Alaska discovered that it was cheaper to send the building supplies to a remote bush site via USPS, rather
than contracting with a private plane and/or trucker. More people jumped on the "almost free" bandwagon and were
sending cinder blocks, framing lumber, and everything else needed to build a house - via the USPS. The USPS took a
terrible bath financially on this, but the house builders met the requirements for postage. Sheesh!

SIA

[ScooterSissy]

...
I buy and sell things over the internet and do a lot of shipping. I'm not arguing the philosophical issues here, but as a practical matter, I choose the USPS over UPS and Fedex whenever I have the option. For one thing, the USPS is way cheaper...

I have to say, I don't know that pointing out that the organization that's loosing money is "way cheaper" than the one making a profit is going to get much more than a "well.... yeah!"