Postal Service on brink of collapse

http://www.nytimes.com/2011/09/05/business/in-internet-age-postal-service-struggles-to-stay-solvent-and-relevant.html?_r=1

A few choice paragraphs:

In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers — nearly one-fifth of the agency’s work force — despite a no-layoffs clause in the unions’ contracts.

The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.

As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

There is a lot I have to say on this matter...

#1 I guess we know why the postal service has been running all those television ads telling viewers that the USPS doesn't run on taxes: because they're gearing up to ask for a bailout.

#2 There is absolutely NO REASON to bail out the USPS. None at all. There is no place for the USPS in today's modern business climate and they provide almost no services that couldn't be matched by other companies (UPS, FEDEX, WALMART). I get so little real mail these days that I let the mailbox go for 2-3 days before checking it. I just don't need it. My bills are paid online; my bank statements are e-documents now. Too many people text me or email me; the art of letter writing is going the way of the Dodo.

#3 USPS management got itself into this situation by agreeing to pay postal workers even when they weren't working and to provide enormously inflated and over-generous benefits, so they should figure a way out that doesn't cost the taxpayers one penny.

#4 The unions are the single biggest factor in this problem and they won't give up easily or go away quietly. Look for a major battle this Fall between President Obama and the USPS as the unions put pressure on Obama to come up with a plan to save the service. I have a feeling this is going to be a huge hot-button issue in a few more weeks because it's easy for every American to understand: that we have a service that is grossly inefficient, is almost completely unnecessary, and yet there will be a temptation too great to resist by some to help underwrite the USPS despite how much money it is losing.

I have a US shipping address to facilitate business transactions over there for myself, Mr. Dog and a couple others. During August 2011, we received no less than 65 packages via US Priority Mail, Amazon, other packages etc (approximately 2/3 of those being eBay purchases). I thought Mail-Order was still a thriving business over there? If not for the postal services, at lease for the companies or individual sellers that use them.

I still send and receive plenty of important stuff through the USPS, with an ease not presented by any other available carrier.

Harmsway wrote:

I still send and receive plenty of important stuff through the USPS, with an ease not presented by any other available carrier.

That ease may not be possible with the other companies because Congress has given the USPS a legal monopoly on first class mail. If that were eliminated, you'd probably see first-class rates go down as UPS, FED EX, and other companies spring into action to provide the same service. Furthermore, we might even see next day air shipping rates go down for both FED EX and UPS because they'd be getting a lot more business with the ability to now deliver

http://en.wikipedia.org/wiki/Private_Express_Statutes

The USPS is a perfect, perfect, perfect example of a company/government-entity that is excessively regulated, overburdened with exorbitant labor costs, can't turn a profit and still has to seek the sanctuary and protection of the American taxpayer. There is just ZERO reason for the USPS is to exist. Every function of the USPS can be done better by the private sector....and with less cost to the consumer.

If they sink, then maybe I'll be able to pay bills late.

Mr. Brown wrote:

If they sink, then maybe I'll be able to pay bills late.

It's likely they'd emerge from bankruptcy protection with a restructured debt plan, lower labor costs, and reduced service commitments. It's the height of inefficiency that they have to ask permission to not deliver on Saturday. I'd suggest that they could probably cut service to three days a week: Monday, Wednesday and Friday. My mailbox has almost nothing but junk mailings in it; I rarely get pieces of mail that amount to anything. Imagine the waste that's involved driving a postal vehicle to my place and then slipping in a "have you seen me?" flyer in the mailbox that you know I'm going to put in the trash immediately.

Best thing the USPS could for itself is to declare bankruptcy and eventually allow a court to sell off the routes, the equipment, etc...to another company.

It's really a shame but USPS made sense tears ago. Now the answer is simple, privatize and localize.

Gravity's Silhouette wrote:

My mailbox has almost nothing but junk mailings in it; I rarely get pieces of mail that amount to anything.

I'm not sure this is normative for the whole United States.

Harmsway wrote:

Gravity's Silhouette wrote:

My mailbox has almost nothing but junk mailings in it; I rarely get pieces of mail that amount to anything.

I'm not sure this is normative for the whole United States.

Comments in the NY Times message boards tend to agree with me. So much of what I get is actually junk mail that it's a waste of paper and a waste of gas and resources to even deliver it to me. There's simply not enough volume of legitimate mail to justify having the USPS operate 6 days a week, and probably not even 5. Every bill I pay is paid online. Every important message I get is either texted to me or emailed or left on voice mail. There are just so many communication options that it doesn't make sense to keep the USPS going to deliver an ever dwindling amount of snail and junk mail. Those services could be provided more efficiently through privatization.