The U.S. Postal Service Nears Collapse

[xchrom]

http://www.businessweek.com/magazine/content/11_23/b4231060885070.htm

Phillip Herr looks like many of the men who toil deep within the federal government. He wears blue suits. He keeps his graying hair and mustache neatly trimmed. He has an inoffensively earnest manner. He also has heavy bags under his eyes, which testify to the long hours he spends scrutinizing federal spending for the U.S. Government Accountability Office, the congressional watchdog agency where he is Director of Physical Infrastructure Issues. As his title suggests, Herr devotes much of his time to highway programs. But for the past three years he has been diagnosing what ails the U.S. Postal Service.

It's a lonely calling. "Washington is full of Carnegie and Brookings Institutes with people who can tell you every option we have in Egypt or Pakistan," laments Herr, who has a PhD in anthropology from Columbia University. "Try and find someone who does that on the postal service. There aren't many."

Yet Herr finds the USPS fascinating: ubiquitous, relied on, and headed off a cliff. Its trucks are everywhere; few give it a second thought. "It's one of those things that the public just takes for granted," he says. "The mailman shows up, drops off the mail, and that's it."

He is struck by how many USPS executives started out as letter carriers or clerks. He finds them so consumed with delivering mail that they have been slow to grasp how swiftly the service's financial condition is deteriorating. "We said, 'What's your 10-year plan?' " Herr recalls. "They didn't have one."

[DCBob]

1. A dinosaur ready for extinction..

They need to think of radical changes there. Seriously downsize, reduce number of days of delivery, charge alot more for junk mail. Just raising the price of stamps is not going to work anymore.

[Countdown_3_2_1]

13. Words of Wisdom, DCBob

agree 100%

[fasttense]

54. There is no problem with the postal service that intelligent legislation can't fix.

This postal crisis is fake and a common RepubliCON talking point. It is just another manufactured RepubliCON crisis. See my post below

[mopinko]

14. quit delivering the damn junk mail.

first class or forget it. plenty of days the man would not have to walk up my steps but about 3-4 days without that shit.

[Capitalocracy]

40. I love that idea

Unsolicited commercial email, no government help for you. Take it to a private carrier, see how much they charge you for it.

[rucky]

41. That may be the only think keeping them afloat. n/t

[jmowreader]

64. Two problems with that

Look at http://www.usps.com/financials/_pdf/fy2011q2-rpwsummaryreport_qsr.pdf.

"Junk mail" is classified by the postal service as "presort." When you ship junk mail you go to a mailing house. They separate the mail by zip code, because the less work the USPS has to do the cheaper your rate is.

According to the 2Q2011 postal service revenue summary, they made a touch over $8 billion in 2Q FY 2011 (as opposed to $8.6 billion in the same quarter last year) on First Class mail, and almost half of it ($3.968 billion) was made in the presort business. Compare that with $2.8 billion made on "single piece" delivery, which is what you're calling "first class."

There is also a Standard Mail category. That's purely junk mail--and they made $4.2 billion last quarter handling it. This category is up from last year by about the amount presort First Class is down--so rather than cutting down mailing they've just gone to a cheaper way to do it.

Add the two junk mail categories together and you're looking at somewhere just a little over $8 billion in revenue, last quarter, from moving junk mail. On Page 2, we can see the total mailing services mail revenue was $13 billion--so, two-thirds of the Post Office's revenue comes from bulk mail.

The other problem is, the printing industry makes a lot of money printing junk mail. Cut out all the junk mail delivery, and the printing industry collapses. Yes, I know you don't like junk mail but printers really like to eat, which ending bulk mail would interfere with.

[CreekDog]

75. the USPS's survival depends on overwhelming us with nuisance junk mail

that is a waste (because it's unwanted and tossed without reading) --in fact, such mail is designed to be read or opened just a small percentage of the time.

to me this is all a false dilemma.

i will support the USPS politically once it does something to stop me from being overwhelmed by wasteful junk mail. Until then, I'm doing all the work to stop it (mostly unsuccessfully) and destroying what gets through anyway.

[CreekDog]

74. agreed and also it's a waste

not to mention a nuisance!

[Name removed]

37. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[alfredo]

46. The Dinosaur didn't die, the swift, small winged Dinosaurs

survived and thrived. The Post Office should emulate that dino.

The government needs to ease up on the types of products and services they can provide. There was one plan to use the vehicles as mobile data collectors. Private corps could attach sensors and such to the vehicles for a fee.

[fasttense]

52. This is such a faked crisis, much like the fake crisis over Medicare and Social Security.

First the RepubliCONS semi-privatize and introduce corporate competition for the only service specifically mentioned by our founding fathers in the US Constitution. Then the post office has difficulty keeping it's prices down and fighting off the very same corporate competition because of that privatization. Then corporations swoop in and offer low, low prices for the same service. Do you really think if corporations controlled our postal service their prices would stay low? Just like oil prices?

Just like the RepubliCONS have done with Medicare. First they introduce a bill that will seriously hurt Medicare like not being able to negotiate prices with drug manufacturers. Then the scream and point and say we have to "fix" the problem by destroying the service.

Anyone who falls for this tactic yet again, really needs to talk to me about a bridge in Brooklyn I have for sale.

[RegieRocker]

73. You are correct!

[underpants]

53. 1. junk mail is keeping USPS alive 2. USPS is cheapest and best mail system in the world

3. it is a money losing operation which is why no one else will take it on
4. does the DoD create profit?

[DCBob]

56. junk mail is a monumental waste of money, resources and effort..

99% of it get's thrown in the trash without even being looked at. The fact that it keeps the USPS alive is pathetic excuse to justify it.

[underpants]

57. I wasn't justifying junk mail

I agree with you it is extremely wasteful but it IS vital to the USPS operation


BTW- this service costs $41 for 5 years - they intercept your junk mail
http://www.41pounds.org/

[DCBob]

58. I think junk mail should be treated in a similar way as email spam.

We should not have pay $41 or 41 cents to stop junk mail. That is pathetic.

[CreekDog]

77. oh please --pay to stop stuff i don't want?

and nevermind that every service has gaps and things get through...so the $41 would still let some stuff through.

:thumbsdown:

[CreekDog]

76. amen!!!

:rofl:

[appal_jack]

72. +1

charge alot more for junk mail

Preach it brother! I'm so sick of 2-3 lbs of material going straight from my mailbox to the recycling bin, six days a week.

-app

[Pab Sungenis]

2. De-privatize it.

The Post Office ran beautifully for 180 years before Nixon privatized it. That's when everything went wrong-side up.

De-privatize the Post Office. Put it back in the Cabinet. Fire the top management and put civil service workers being paid lower government wages in place. Weed out 90% of the middle-management bureaucracy. That will put it 90% of the way toward solving its problems.

[xchrom]

4. +1

[WhiteTara]

5. Absolutely

Privatization does NOT work for public needs.

[The Backlash Cometh]

10. USPS is not federal?

How can they claim mail fraud a la "The Firm" if it's not under federal control?

[DCBob]

6. That might work but the GOP will block it of course.

They would prefer to just let the private sector handle it entirely.

[obxhead]

19. yes,

Then we can pay $8 bucks to mail a letter too. :(

[MattBaggins]

62. The party that waves the constitution around without reading it.

They scream about the constitution daily; but the instant you mention they can't turn the Post office over to UPS they start hemming and hawing.

[jmowreader]

65. The private sector doesn't want it

Oh, trust me: FedEx and UPS would LOVE to have the premium services like Express Mail and Priority Mail. They do NOT under any circumstance want First Class Mail because they'd never be able to deliver a letter for 44 cents from Key West, Florida, to Ketchikan, Alaska.

[Donnachaidh]

8. +1

The post office is the perfect example of how privatization does NOT work and can be a catastrophe.

[loudsue]

12. AND use the post office as an example for the privatization of schools...

there are many .... MANY.... things the government does better.

1) The Post Office
2) The Prisons
3) The Schools
4) The military

and, dare I say it...

5) HEALTH CARE

[scarletwoman]

20. Absolutely! +1 (nt)

[kickysnana]

21. +

[madrchsod]

22. spot on...

[Cid_B]

24. Or the other way....

... fully privatize to compete with the other delivery services

[Occulus]

61. That will eliminate universal service. n/t

[MattBaggins]

63. Too bad we have a Constitution that says otherwise.

[XanaDUer]

29. +1

Amen.

[SDuderstadt]

31. It is not "privatized"...

It is an "independent federal agency", which means it is self-funded and that it does not report to a cabinet secretary.

[Hannah Bell]

36. +100. they deliberately wrecked it so they could eliminate it.

[KurtNYC]

43. it's not wrecked, profit is off by a margin less than 10% but

that is billion because the USPS grosses $75 bil+ annually. Not wrecked.

[Hannah Bell]

45. by "wrecked" i mean the so-called "reform" of 1970.

[zappaman]

48. and by "deliberate", you mean...?

I'll wait why you back that up.

Tick...tick...tick...

[Name removed]

49. Deleted message

Message removed by moderator. Click here to review the message board rules.

[zappaman]

50. ok

2de·lib·er·ate
adj \di-ˈli-bə-rət, -ˈlib-rət\
Definition of DELIBERATE
1
: characterized by or resulting from careful and thorough consideration <a deliberate decision>
2
: characterized by awareness of the consequences <deliberate falsehood>
3
: slow, unhurried, and steady as though allowing time for decision on each individual action involved <a deliberate pace>

Now, show how the USPS was "deliberately wrecked".
Or do you want me to look up "wrecked" now?

:rofl:

[Occulus]

67. IIRC, after the strikes of the 70s, some postal managers

went and founded a couple new companies. The "self-sustaining" rules were imposed so the US Post Office Department, at the time, a government service and cabinet position, which was then changed to the United States Postal Service, a quasi-Federal corporation overseen by a Board of Governors, could "compete" like a "business" with these newly-founded companies.

You may have heard of those companies the USPS then found itself in "competition" with. They're called Federal Express and United Parcel Service.

[bluesmail]

59. + 10!

[kentuck]

3. We would not want to lose the USPS...

That would not be good.

[RebelOne]

32. That would not be good.

My sister is a mail carrier in South Florida and I'd hate to see her without a job. That is the only work she has ever done for the past 30 some years.

[Scuba]

7. Well, it'll take a Constitutional Ammendment to get rid of it, so....

The questions becomes, how can it best serve the People?


The article raises some interesting questions...

<snip>



Since 2007 the USPS has been unable to cover its annual budget, 80 percent of which goes to salaries and benefits. In contrast, 43 percent of FedEx's (FDX) budget and 61 percent of United Parcel Service's (UPS) pay go to employee-related expenses. Perhaps it's not surprising that the postal service's two primary rivals are more nimble. According to SJ Consulting Group, the USPS has more than a 15 percent share of the American express and ground-shipping market. FedEx has 32 percent, UPS 53 percent.

The USPS has stayed afloat by borrowing $12 billion from the U.S. Treasury. This year it will reach its statutory debt limit. After that, insolvency looms.

On Mar. 2, Postmaster General Patrick R. Donahoe warned Congress that his agency would default on $5.5 billion of health-care costs set aside for its future retirees scheduled for payment on Sept. 30 unless the government comes to the rescue. "At the end of the year, we are out of cash," Donahoe said. He noted that the unusual requirement was enacted five years ago by Congress before mail started to disappear.

This should be a moment for the country to ask some basic questions about its mail delivery system. Does it make sense for the postal service to charge the same amount to take a letter to Alaska that it does to carry it three city blocks? Should the USPS operate the world's largest network of post offices when 80 percent of them lose money? And is there a way for the country to have a mail system that addresses the needs of consumers who use the Internet to correspond?

<end snip>

Note how health care for retirees is being used as a lever.

High, very high, charges for junk mail should come first, IMO. Saturday home delivery could go. Higher rates for expedited mail.

Using the Constitutional status of the USPO to help keep the internet open is a VERY interesting idea.

[Hannah Bell]

47. what a propaganda piece:

"Since 2007 the USPS has been unable to cover its annual budget, 80 percent of which goes to salaries and benefits. In contrast, 43 percent of FedEx's (FDX) budget and 61 percent of United Parcel Service's (UPS) pay go to employee-related expenses. Perhaps it's not surprising that the postal service's two primary rivals are more nimble."


yeah, congress put lead weights on the PO & subsidized fed ex/ups.

so not surprising they're "more nimble".

assholes.

[LiberalArkie]

9. Article 1 Section 8 of the constitution

does not say anything about having to turn a profit.


To establish Post Offices and post Roads;

[earthside]

11. Trend Line of Decline

The United States Postal Service from the beginning of the republic to this moment has been an institution that has unified the nation; an essential service critical to creating an informed, engaged public.

The answer is the re-creation of the Post Office Department as a cabinet-level agency; it should never have been converted into a self-sustaining institution. Like national security spending, the post office is important to the functioning of our democracy and is worth the cost.

However, it this era of teabaggers and even too many Democratic politicians cow-towing to the "public-private partnership" mantra, the prospects for the USPS are not good.

It is a sign, in my opinion, of the slow but sure decline of the United States from the world's number one economic and cultural power into a 'banana republic' plutocracy, a low-wage nation with fewer and fewer affordable services for the working class.

When delivery days are reduced, when it costs a dollar or more to mail a wedding or birthday invitation, when regular folks are at the mercy of only private corporations for parcel post service ... then we will regret letting the USPS wither away.

However, one can see very clearly where this is headed: further privatization and yet another fee-based burden on middle and working class people.

[xchrom]

15. +1 -- the usps is a canary in the coal mine. nt

[Countdown_3_2_1]

17. This is no longer an essential service.

email has taken away most of it's business. Private companies have revealed packages can be delivered for less. If the post office can't stay afloat...let it die. The medium is over.

[quiller4]

34. There are large parts of the country not served by private

package carriers. Only USPS provides package service to areas with sparse populations.

[Johonny]

71. They aren't cheaper either

They generally offer faster service, but I've never seen them cheaper near me. Sending a box to my parents vastly cheaper at post office than FEDex or UPS. Of course there are a lot of private people that do point to point transfer, but most people don't use them.

[mmonk]

18. +1

[annabanana]

44. +1000 for this post. It deserves it'sown thread. . . .n/t

[msongs]

16. USPS delivers mostly trash for lowball rates. raise the rates on the unwanted trash nt

[YellowRubberDuckie]

23. DEPrivatize, lower wages, cut back on the middle management BS...

...and raise the bulk shipping rate. There I fixed it. Now, could someone in fucking Washington have some goddamned common sense and just stop being fucking moronic? Please? This shit is not fucking Rocket Science!!
Duckie

[JDPriestly]

25. The US Post Office is not a business. It is a utility. It should

not be expected to pay for itself through sales although its services should not be free. It should, however, be subsidized.

Imagine a world in which you had to pay UPS prices to mail a birthday card or to get a post card from Hawaii delivered to a friend. Pretty awful thought.

[kenny blankenship]

26. And just imagine what the UPS and FedEx prices will be when the USPS is gone.

[JDPriestly]

30. So true.

And imagine how expensive and difficult postal delivery services were when the Founding Fathers gave Congress the authority to create the Post Office. It was not their intent that it necessarily turn a profit.

You know of course that Benjamin Franklin ran a postal service at one time.

[Scruffy1]

27. So much misinformation-so little time.

Shows you how a piece of propaganda from Business week works. I find it laughable that so many complain about advertising mail. Get a fucking life, or at least a wastebasket. I'm sure if the USPS quit delivering advertising mail someone else would still do it as part of a piggyback. Besides which, advertising mail revenue is an important source of revenue. The real problem with advertising mail is that private mailers are given discounts to presort way above what it would cost the Postal service to do with its own employees and equipment.
This phony prepayment of retirement benefits was designed by the Neo-conservatives just to help destroy the postal service. I know of no other business or government agency that has this requirement. No where is it mentioned that the same GAO determined the USPS overpaid the CSRS by over $50 billion dollars for their share of CSRS since they switched to FERS in 1982. Darryl Issa famously remarked that the USPS doesn't deserve to get it back, but he didn't dispute it was overpaid.
First class mail has never been the main revenue of the postal service and has stayed fairly flat. Person to person mail and post cards were always a small part of revenue so the bunk about email killing the USPS is pure bunkum.
Ending Saturday delivery is actually very complicated because of automation, storage problems and carrier work loads.
The USPS does not have rate setting power. All rates must be approved by the Postal Rates Commission. The PRC are all political appointees and are well lobbied by advertising lobbyist and parcel delivery companies.
If you take away the $5.5 billion pre payment and pay back the $50 billion the books look different.
The higher labor numbers are obvious. UPS and Fedex Don't send letter carriers down every street and road in Maerica everyday.

[xchrom]

28. this is why people here are saying go back to the cabinet position it should be:

'First class mail has never been the main revenue of the postal service and has stayed fairly flat. Person to person mail and post cards were always a small part of revenue so the bunk about email killing the USPS is pure bunkum.'

& the PO should require higher payment for junk mail services -- bringing it back to a cabinet position could go a long way to reducing lobbying corruption.

[eppur_se_muova]

33. Thanks for the debunkment. I've heard that the USPS "crisis" is all phony RW accounting ...

but the details need to be more widely known.

[Hannah Bell]

38. +100. most of ups & fed ex's business, in fact, came in the wake of the PO "reform"

that hobbled the PO & empowered those corps.

[DCBob]

51. you appear to be misinformed about your claims of "misinformation"

from you..

"First class mail has never been the main revenue of the postal service and has stayed fairly flat."

from the USPS..

"First-Class Mail volume continues to decline, with year-over-year declines of 6.6 percent in 2010, 8.6 percent in 2009, and 4.8 percent in 2008. This trend is particularly disturbing as First-Class Mail, the most profitable product, generates more than half of total revenue."

http://www.usps.com/communications/newsroom/2010/pr10_107.htm

Makes me wonder about the rest of your claims.

[Scruffy1]

60. My lack of detail. I was talking letters only.

First class mail comes in many forms. For instance a parcel may be first class. However, you account for it when the economy goes down mail goes down. Last years 5% drop wasn't exactly precipitous but it is real.
When they say first class mail they include parcels sent first class, letters sent first class, first class flats, and Priority mail. What I meant to say was first class letters have been slightly lower, but the first class parcel business has been hammered with the economy.
The point I was trying to make is that the internet does not have as big of an impact as some believe. The drop in revenue is mainly first class parcels. I think there will be some recovery if the economy improves, especially as internet buying increases. This will happen only if the USPS is allowed to compete by the Postal Rate Commission for the really good shippers. The way it is now they get a lot of the crap.

[DCBob]

66. "lack of detail".. huh?? How about admitting your statement was completely wrong..

your defense of the indefensible is comic.

[CreekDog]

78. you think anything's okay for a buck

junk mail a waste! my complain isn't just that i have to recycle it (do you care so little for the environment that you put it in your trash?), my complaint is also that it's unwanted and wasted resources --mailed and delivered knowing that i'll recycle it unopened.

[Odin2005]

35. IIRC a public post office is REQUIRED by the Constitution.

[TheManInTheMac]

55. The Constitution give Congress power

to establish post offices. It is not a requirement.

[Kurovski]

39. Does this mean all my forever stamps are worth shit?

[nonperson]

68. Yes but please don't be upset

At least they're worth shit forever.

[Tierra_y_Libertad]

42. Meh. I heard the same "collapsing" crap when I started working for the USPS in 1967.

It usually comes up around contract time and the employees are threatened with cutbacks. Time for the unions to call another strike.

[nonperson]

70. But there was no broad based internet usage in 1967

No email. No on-line bill pay.

I mail my mortgage payment every month. I've never been late with a payment no less ever missed one (so far at least) but last month our payment didn't post and the late date was fast approaching. We called the mortgage company. They never received the payment. I went to the post office to ask if they could trace a piece of first class mail. They handed me a form that basically said provide a load of useless information and the USPS will call the recipient and ask them why they didn't receive the bill.

I mailed five pieces that day. All four others were received. We stopped payment on the check (stop payment charge) and paid by phone to avoid being late for the first time in our lives. A week or so later we got a piece of mail from the USPS with our mortgage check and statement. The original envelope had been destroyed and the USPS had delivered our mortgage payment with our car payment. The auto finance company returned the check and statement to the USPS. There was a long letter explaining how many pieces of mail and blah blah blah the USPS handles and they try not to screw up. Excuses.

I signed up for online bill pay for the mortgage. Another piece of mail the USPS won't be handling from now on. They can deliver every piece of junk mail perfectly but my mortgage payment gets separated from the envelope and delivered to my auto finance company?

Ridiculous.

[TrogL]

69. Canada's is threatening to go on strike

One of the commentators on the CBC morning drive-in show noted that almost nobody uses it any more. Businesses all use couriers and everything else is done electronically.