Clickin’ will embiggen
The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances. “Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”
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. The post office’s problems stem from one hard reality: it is getting 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. Missing the $5.5 billion payment due on Sept. 30, intended to finance retirees’ future health care, won’t cause immediate disaster. But sometime early next year, the agency will run out of money to pay its employees and gas up its trucks, officials warn, forcing it to stop delivering the roughly three billion pieces of mail it handles weekly.
Fed Ex is horrible and UPS mercilessly beats their drivers*. I’ve always thought that USPS has done a good job…at least until recently. That said..where will we get the money to bail them out? Maybe..we need to rob a bank or two.
*sarcasm – (I don’t think I’ve ever seen a UPS driver that wasn’t busting his butt.)
A question for all:
If the USPS abandoned daily delivery completely, how frequently would you need mail delivery to get by?
I think I could get by with delivery once a week. At work we do virtually billing electronically. We can fax or e-mail bills anywhere instantly.
#1. Actually, I use a PO Box. And that works fine for me. BTW, I don’t have milk delivered to my door either.
Maybe it’s just time.
Once a week sounds good. But, I want options for overnight delivery too.
The guy in charge of the USPS makes how much, and they have these problems?
Arm the postal workers and pay them out of the DoD budget
I’ve heard so many Americans complain and worry about losing their precious Saturday delivery service. Here in Canada we haven’t had it for decades and you don’t hear anyone complaining. Hell, delivery could be once or twice a week and that would probably work for most people.
I was wondering why a postal driver was using a different street pattern in my neighborhood recently, making it difficult for me to predict when the mail will arrive. Used to be the truck made noise when delivering across the street, and now it arrives at my house before the neighbor.
Personally, I blame global warming.
This has been a long while in the making and was pretty much a given some time ago. Every year or so the cost of a stamp would go up. The increase never really covered the increase in costs though. In a way very similar to utility pricing for water and sewer. People assume the service will continue while the infrastructure falls apart.
While personally I could get by with delivery a couple of times a week. Not all business can be done by email or fax. Having been burned by electronic banking before, many people myself included want a hard copy of a bill or statement.
The post office is not to big to fail, it may be to big to adapt and a successor organization may be needed. An organization with a more focused approach possibly using PO box vs carrier delivery as an optional program. Those who wish could opt out of delivery in exchange for a free box. The likely hood of the postal service following the current program is pretty much nil unless hugely subsidized.
I strongly suspect that some of the banks are so loaded with toxic assets only a person who didn’t know what they were buying or who got some sort of sweet heart deal and maybe government promises would make a big share purchase which is exactly what I thing Buffet did with Bank of America. If they don’t need cash desperately and were truly solvent they would not have made that deal. Raiding such institutions is not going to solve our problems.
They need to be broken up and forced to divest. They have to many people at the top worth nothing. They don’t solve the needs of their communities very well and the I suspect that the really smart crooks have already taken the money and ran.
My county has at least four post offices because of history. They are all now located along the same 4 lane highway. Maybe some of them could go. 5 days a week is enough. Many post offices used to be located in rural stores. It occurs to me that sticking a bank of PO boxes in a quick stop and sticking drop boxes there might not be a bad idea now.
“A No Layoff Clause”? Really? No one ever thought that would come back to bite them?
Once again when the union negotiates with a government agency, they usually are dealing with the very people they helped get elected, so they can ask for the sky, and the agency will tend give it to them. After all the ones making the contracts don’t have to deal with the consequences.
More reason government unions should be illegal.
This is a far better article on the problems with the USPS.
http://washingtonexaminer.com/opinion/op-eds/2011/06/postal-service-needs-comprehensive-reforms
In a nutshell, the USPS is another inefficient, union driven government organization which needs to be dramatically changed.
The mail is going to become a once-a-week affair. (Kiss all of them flyers goodbye. [My mailbox would already be a home for spiders if the super didn’t clean out the lobby once a week. :-])
Forget about RDF (Rural Free Delivery) coming around everyday. Its going to be a long route with one energy efficient postal truck doing the work of five.
Forget about overnight mail too for obvious reasons. (Though for $20+ a letter you can still call DHL, FedEx or UPS. As soon as digital signatures start getting better accepted, [and at that price, Joe Schmoe‘d better learn to live with it,] look for paper transactions to dwindle and become extinguished.)
Speaking of UPS, our mail has been going through UPS sometimes and DHL, FedEx and UPS have been overnighting light mail by USPS, (It depends on the weight and the promised “delivery by”.)
The USPS is winding down.
I fully expect to not use up all of the “forever stamps” I’ve got littering my desk drawer. <sigh>
This is a useless article. Does anyone know WHY the number is exactly $5.5 billion, like it is EVERY year since 2006? Typical to find people who are uneducated about a topic posting comments that have no bearing on the subject.
80% for salaries is actually pretty low for a government agency. Usually runs about 5% higher than that.
Don’t really need the daily dose of junk mail. The important question is how will I get my netflix? =)
They tried to add more business for all those extra workers by offering more and more services. Their package delivery is still cheaper than FexEx and UPS, though reliability not so much.
It’s not cheaper if the company is going 9 billion plus in debt to give it. USPS, as well as NPR, Public Television, and many many other programs, need to either stand on their own, or go away completely. I’m sure there are a ton of superb wagon wheel makers, TV repairmen, and carrier pigion trainers that have lost their livelihood through the years.
This can’t be true because there is a sign in my post office that says they turn a profit every year.
Come to Canada where we have been held hostage by Canada Post and its antagonistic labor unions for as long as i can recall and been alive
These people earn great money , the unions motto is “take your time lots of work”
On the other side the inept – politically appointed management is fully convinced that they are providing exceptional value – compared to alternatives such as fedex
Somehow they rationalize that since consumers are willing to pay Fedex prices – that justifies their prices and service levels
Yet it never occurs to them that as they are in a monopoly government shielded situation its a matter of Canadians being held hostage by them
All the while management and unions make beautifully coloured graphs of how well they are doing – and what great value we are getting from the Canadian postal services
Its like rearranging deck chairs on the Titanic
Ahhh yes. The post apocalyptic mail delivery cartoon authored by Nicholas Gurewitch. Possibly the greatest cartoonist ever. Here is the funniest cartoon, IMFHO, that he ever authored.
http://pbfcomics.com/?cid=PBF105-The_Schlorbians_Strike_Again.jpg
So, none of you actually know anything about the USPS balance sheet.
If they actually charged, say, Capital One what it costs to deliver their daily load of junk mail – they would be turning a profit.
The USPS has always been premised on first-class mail customers and parcel post footing the difference as a subsidy to junk mail.
Always.
Why do we need mail on Saturday? I would prefer to have two bill-free days each week.
Time to slow down somehow. God knows, this Internet isn’t saving us any time.
Is it?
@# 8 …….I got solicited for a capital one card, applied and was accepted……and I’ve been still getting pre approved letters in the mail twice a week. This was just in August. There goes your whole arguement!! lol 🙁
#20–plus/minus==could you explain that cartoon to me?
USPO==one of the best run government services there is. Only thing wrong with it is it is a government run service: meaning subsidized bulk mailing the result of special interest legislation with the ever continuing PUKE solution to cut services to the average American while cutting benefits to the workers.
Yes==an excellent observable understandable example of what is good and bad in government/politics /business/business ?greed/unions/…etc
USPO–letter usually overnight or next day: 44 cents.
The Competition–overnight x10 as much.
Same as it always is.
I’ve got two words. Privatize.
Dvorak,
The comic you posted is from The Perry Bible Fellowship (http://pbfcomics.com/). There is no mention of it in your article, a complete lack of credits. Fix this, and give the author some bone. I surely hope you have his permission.
The USPO situation provides an instructive circumstance.
Let’s assume USPO could deliver mail as it does at break even of 50 cents or at 30 cents if bulk mail was delivered per its weight like the rest of the mail BUT it did so at on average 12 more hours and twice the labor force compared to for-profit competitors providing the alterantive service for $4.50 per letter.
Two Questions: should the USPO continue at all?
If continued, should reducing the work force/time to deliver even be an issue?
This all reminds me that SOCIETY sets the employment rate by decisions such as this. Everyone in the world with a need for more people could be employed right now if we removed automated telephone switching devices from the phone/internet system.
Imagine that? Everyone employed or not employed based on actual decisions that can be made or not.
I recall the Oil Refinery Plant that exploded in Bophal?–someplace in India. It was being run by 2000 employed Indians rather than 15 white collar computer techs as the same kind of plant was run in the USA. India wanted the first design in order to create jobs. turns out the plant needed just a bit more tech to run safely. USA no longer could build a more manual plant.
How is the World to deal with Structural Unemployment? Structural because all such decisions are consciously made. Imagine in a few years as further computerization will have Watson running all call centers? All help lines? Gone.
Yes–what does “willingness to work for a living” really mean in a technologically driven society. We can see it NOW in the USA. Yes–privatize the USPO.
Drivel.
At some point, perhaps when letters cost us 50 cents a stamp while junk mail is practically free, I decided to use the internet to pay my bills. So, like the digital CD, which was done in by the RIAA over pricing, the USPS has done itself in by over pricing. RIP old faithful. We will miss your service but not your prices.
I do not think as poorly as the USPS has been run that they deserve a bailout from taxpayers. But we are talking about a large union work force. So I am sure they will get bailed out.
John. I can attest to the fact that Fedx is horrible. I’m an undergrad student working at the main hub in Memphis, TN and absolutely nobody gives a shit about the packages. My job is to load the containers with boxes which then go to the plane to be shipped out. Our number one priority is to cram as many boxes into each can as possible. Having your box shipped with a “fragile” sticker on the side doesn’t mean a darn thing. I don’t know how bad it is in other areas, but I’ve probably broken at least a few Dells just chucking them in the containers. Tip: ship usps if you want your package to arrive at it’s destination intact.
Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx
Pity the author didn’t take time to either think about this or do some research. FedEx and UPS pay property taxes. Government agencies do not!