The US Postal Service needs a bailout?

[isu664]

The postal service does receive almost $100 million per year in taxpayer funds. It is a drop in the bucket, but they do receive it.

Regarding your second point, from a recent Newsweek article,"...the average postal employee still makes $83,000 in salary and benefits a year, placing postal workers among the highest-paid government employees."

They do not recive funds from taxpayers period.

 

[alarson]

The problem is that no private business wants it. The Postal Service is mandated to deliver to all addresses and they don't want that. UPS,Fedex and others doesn't go to all ciites so they dump it into the postal service for delivery of the last mile.

They dont want to do it at the price USPS does it, or with universal flat pricing. If USPS werent there undercutting them with rates that even USPS cant afford to be charging, there might be a market for UPS\Fedex to pick up USPS's slack... it just might cost more.

 

[isu664]

The USPS can still service all areas, but do it on a scale that is 1/4th as big as it currently is. Cut deliveries to 3x/wk for cities/towns/etc and go to 2/wk for hard to get to rural areas.

They have been tring to go to 5 day delivery but congress keeps standing in the way. By cutting out Saturday they can save $3 billion dollars a year.

 

[Bubbahotep]

I'm an ardent supporter of going to M-W-F delivery service.

Here's another simple solution - want everyday service? Rent a PO Box. My parents have had theirs for as long as they've lived in Davenport (25+ years now), first because it was the one consistent address my parents had for our relatives on the East Coast to send mail to while we were bouncing back and forth between hotels and apartments first upon moving to the area and then waiting for their house to be built, and second to this day my dad doesn't like mail with secure information contained in mail such as credit card bills or Social Security statements sitting in an insecure mailbox in front of the house - and he didn't even have a mailbox in front of the house for years, just used the PO Box.

I've had a PO box for years, and didn't have a mailbox. Is that you, son?

 

[ruxCYtable]

They do not recive funds from taxpayers period.

From About.com US Govt. Info: The USPS does get some taxpayer support. Around $96 million is budgeted annually by Congress for the "Postal Service Fund."

 

[fsanford]

I have family members that work for the post office. And from everything I've heard, it doesn't have as much to do with the price of stamps as much as the people at the top running the show. Incentives and bonuses aren't based on profit and productivity, they are based soley on keeping your workers at work. Also, there is so much red tape in raising the price of postage that it only gets raised when it's direly needed, as opposed to being able to set a price that they could work with and gain some profit into the future.

Now, this is second hand talk I've heard, I don't really have any facts to back up what I've posted here. This comes from workers talk, not management. But I tend to believe a lot of what I hear based on the fact that "Going Postal" is a legitimate phrase in our vernacular. That phrase alone says a lot about the how the USPS is run and who they choose to hire.

This sounds plausible, most departments of the U.S Government are not set up to reward efficiency. They are set up on the premise if you do not use of of your allocated $$ you will get less next year.

 

[synapticwave]

They have been tring to go to 5 day delivery but congress keeps standing in the way. By cutting out Saturday they can save $3 billion dollars a year.

I've heard the argument made that people that depend on medical shipments (like some diabetics) rely on the USPS to make daily deliveries because they cannot store their medicine for more than 2 days before it goes bad. So the best the USPS could do would be to go to a MWFS layout, but they couldn't go 2 days in a row without delivery because of the people that rely on medical deliveries. I honestly have no data or reference for that, just something I've heard used in this argument before.

 

[ruxCYtable]

I've heard the argument made that people that depend on medical shipments (like some diabetics) rely on the USPS to make daily deliveries because they cannot store their medicine for more than 2 days before it goes bad. So the best the USPS could do would be to go to a MWFS layout, but they couldn't go 2 days in a row without delivery because of the people that rely on medical deliveries. I honestly have no data or reference for that, just something I've heard used in this argument before.

This is something that could easily be picked up by UPS or Fedex and I can't imagine there'd be a big cost difference, if any.

 

[synapticwave]

This is something that could easily be picked up by UPS or Fedex and I can't imagine there'd be a big cost difference, if any.

Yes they "could" be picked up by private industry, but then instead of relying on the post office as a public service these companies would have public service obligations and the gov't would put regulatory requirements on them. If the gov't required that they deliver to every corner of the US at least every other day, I would bet that UPS and FedEx would say no thanks. I would bet that UPS and Fedex would even pay the USPS before they would agree to being regulated like the energy or utility industries. Just look at how hard AT&T lobbies and fights regulation when they are required to run new communication lines and high speed internet to rural areas, it costs them money and they are in the business to make money. UPS and Fedex would be no different, they would lobby congress and try to leave some/lots people (Again, no reference so not sure how valid this argument is) without a way to receive vital shipments without moving to a different location that did receive regular deliveries.

I do think that basic communication ability (the ability to call someone, the ability to send and receive a letter, and the ability to communicate electronically over the internet) are all basic human rights of a first world citizen. If we want to privitize these and regulate them, I'm fine with that. I'm also fine with the gov't providing these services themselves. As long as it's reasonably fair, and relatively equally priced for everyone.

 

[leroycyclone]

$2.2 billion loss in 2nd quarter 2011. "Despite all the jokes about the USPS, I don't think I've ever had a piece of mail lost in my entire life."

Lost mail? Are you kidding?

I received a rental bill for my PO Box that was 120 days late.

Top that one!

I received a village water bill 6 months late. The bill doesn't have to travel more than 2 miles.

I took it to the post office. I talked to the postmaster. He said it was impossible.

I received a Maytag appliance rebate 7 years late. Maytag sent me a letter and stated that I hadn't cashed it. I sent a follow up letter and it arrived in 3 weeks.

I received a letter from my mother with ISU sports clippings enclosed. It seemed odd that that the clippings were old. I looked at the date stamp. The letter had been date stamped 3 months earlier. I showed it to the postmaster.

At that point, the postmaster telling me that it was impossible.

 

[dbqhawk1952]

I have to imagine cutting Saturday delivery would save a ton of money.

The story said that alone would save 3 billion. Germany has completely privatized their Post office and service has improved. We need to look at doing the same thing. If we sold off the entire operation, buildings, trucks and every thing, we would bring in a buch of money and it would all be better.

 

[zach]

Here are a few reasons.

Decline in mail volume over last five years.
First Class Mail which provides the biggest contribution to institutional costs continues to decline each quarter. yet they raise rates to offset decline, which leads to more decline.
Inefficient and unionized.
Postal Service presently has approximately 572,000 employees (despite eliminating 105,000 full time positions over the last two years).
The average yearly salary of a union postal worker is $53,000 plus benefits of $19,000.
There are about 36,400 post offices. Only 19% of them generate enough revenue to cover their overhead expenses. The USPS needs to close thousands of post offices throughout the country.
The USPS has a payment of $5.5 billion due on Sept. 30 to prefund future retiree health benefits. They have already paid $20.9 billion into this fund. Many pundits claim they are overpaying this fund by billions of dollars.
The USPS is legally defined as an “independent establishment of the executive branch of the Government of the United States”. It is considered a quasi-governmental agency and not a government owned corporation. So much crap at the top that no one can get anything done.
USPS is one of many factors reducing printing in the US. Who cares right? However, ten years ago printing was a top 5 mfg industry in the US...major loss of jobs that are never coming back (Printing, binderies, paper, pulp, ink, oil, pigments, newspaper inerts, distribution ....

Z

 

[BirdOfWar]

Besides eliminating Saturdays, why not start eliminating individual mail boxes? Most newer areas have several "community" mailboxes spread out that house mail for 10 or more houses. Why not start consolidating the individual boxes?

I often see the mail carriers walking around and think about how much time would be saved by have a community type box.

 

[CloneIce]

government corporations don't work. period. too much bureaucracy and waste. The government should sell the USPS and let it be ran by the private sector and business oriented people.

This is the same reason the first mission to Mars won't be by NASA but instead a private space firm.

Although I think it would be absolutely awesome if we had private space firms capable of that kind of exploratory space mission, I just don't see it happening.

Putting aside the technology and logistics issues for now, what could make a trip to Mars profitable, or even a break-even investment for a private space firm? Just doesn't seem like space exploration would be profitable for a private firm, the money would be in space tourism (this is similiar to NASA's dilemma as well, because while a manned trip to Mars is possible, at this point the costs probably outweigh the benefits). They would have to charge a ridiculous amount, for a very long and risky trip to Mars, and unfortunately Mars isn't full of gold or hot green women like on Star Trek. I'd love it if you were right though.

 

[CloneIce]

The story said that alone would save 3 billion. Germany has completely privatized their Post office and service has improved. We need to look at doing the same thing. If we sold off the entire operation, buildings, trucks and every thing, we would bring in a buch of money and it would all be better.

Well yeah, but then who ever took over the operation would have to buy all knew buildings, trucks, and everything (because that is obviously needed to transport and store mail) and that is a ridiculous upfront Capital cost for anyone to handle.

 

[CyCloned]

The USPS is a train wreck, just like everything that is involved with the US government. Someone like UPS would take over what the postal service is doing and make money doing it within a year, without raising rates.

I agree on two things: we could all live with less delivery days and the price for mailing junk mail really needs to go up.

 

[brett108]

It is a problem. but so is this:



The Postal Service is required by law to deliver certain types of mail for the same price, no matter where it is going.

The Postal Reorganization Act of 1970 caused both problems. It developed the PRC, and also forced binding arbitration on the Postal Service with regards to wage issues, which has driven up labor costs.

Below is an older, but interesting article about the postal service. Note that prior to the Postal Reorganization Act of 1970, the Postal Service typically ran a deficit.

THE DEMISE OF THE POSTAL SERVICE?



The Postal service was around long before UPS or FedEx...

That is not the point. Any business that receives corporate funding should not be trying to compete with private business. It undermines the way this country works.

 

[brett108]

Here are a few reasons.

Decline in mail volume over last five years.
First Class Mail which provides the biggest contribution to institutional costs continues to decline each quarter. yet they raise rates to offset decline, which leads to more decline.
Inefficient and unionized.
Postal Service presently has approximately 572,000 employees (despite eliminating 105,000 full time positions over the last two years).
The average yearly salary of a union postal worker is $53,000 plus benefits of $19,000.
There are about 36,400 post offices. Only 19% of them generate enough revenue to cover their overhead expenses. The USPS needs to close thousands of post offices throughout the country.
The USPS has a payment of $5.5 billion due on Sept. 30 to prefund future retiree health benefits. They have already paid $20.9 billion into this fund. Many pundits claim they are overpaying this fund by billions of dollars.
The USPS is legally defined as an “independent establishment of the executive branch of the Government of the United Statesâ€￾. It is considered a quasi-governmental agency and not a government owned corporation. So much crap at the top that no one can get anything done.
USPS is one of many factors reducing printing in the US. Who cares right? However, ten years ago printing was a top 5 mfg industry in the US...major loss of jobs that are never coming back (Printing, binderies, paper, pulp, ink, oil, pigments, newspaper inerts, distribution ....

Z

Fantastic post.

 

[jbhtexas]

Any business that receives corporate funding should not be trying to compete with private business. It undermines the way this country works.

It would seem rather stupid to require the USPS to make money on one hand, while on the other hand preventing them from advertising their services.

 

[alarson]

The USPS is a train wreck, just like everything that is involved with the US government. Someone like UPS would take over what the postal service is doing and make money doing it within a year, without raising rates.

I agree on two things: we could all live with less delivery days and the price for mailing junk mail really needs to go up.

I dont know if theyd be able to do it without raising rates. Now.. maybe if the USPS was charging rates that actually gave it a sustainable budget..