(no subject)

[musicpsych.livejournal.com]

I saw this article recently, and it reminded me of a subject I've been thinking about: What should be done about the U.S. Postal Service?

http://money.cnn.com/2012/02/09/news/economy/postal_service_loss/index.htm

NEW YORK (CNNMoney) -- The U.S. Postal Service renewed its pleas for congressional support Thursday as the floundering agency reported another massive quarterly loss.

The Postal Service announced that it sustained a net loss of $3.3 billion in the last three months of 2011, as declining mail volumes and mounting benefit costs continue to weigh on its business.

In the previous fiscal year, the Postal Service lost $5.1 billion and said its losses would have been roughly $10.6 billion if not for the passage of legislation postponing a $5.5 billion payment required to pre-fund retiree health benefits.

In a statement, the Postal Service urged the government to do away with the requirement that such benefits be funded at their current rates, and also called for greater "delivery flexibility."

There's more to the article at the source.

The article mentions some ideas, such as having mail service on only five days instead of six, slowing down next-day service, or closing some offices. It may help to increase postage costs, though I feel like there are always gripes when that happens, and people could just stock up on "Forever" stamps before a really major increase. I honestly don't know how competitive the mail costs are compared to private delivery services, though the article mentions at the end that both UPS and Fed Ex "reported strong increases in earnings and revenue in their most recent quarterly reports."

I'm hesitant about some of the ideas mentioned above. Slowing down service or reducing the quality of service would, in my opinion, make people even less likely to use it. It might be a downward spiral from there - less people use it, so service is reduced, so less people use it, so service is reduced, and so on. Should tax dollars be allocated towards keeping the Postal Service solvent? That may help, though it might be a tough sell, since the Postal Service says that a large chunk of the money needed is for employee retirement health benefits. More and more people are doing things online that they would previously do via the mail - send messages, send birthday/holiday cards, pay bills, receive magazines/books/music, etc. However, not everyone in the U.S. can do these things online or is comfortable with it. Still, is the decline of the postal service a sign that it's becoming obsolete? If it still needs to exist, in what form should it exist?

Comments

[kylinrouge.livejournal.com]

The problem is they're doing the things that UPS and FedEx are not that take the most money to do, and the things that earn the most money are done by UPS and FedEx. Competition between a public entity that is required to have certain services vs private enterprises that only do what's the most profitable means that.. well.. this happens.

I don't know what the solution is.

P... p... privatize... it... ?

[anfalicious.livejournal.com]

It will be worse.

[anfalicious.livejournal.com]

Also, I've found the USPS to be the best way of getting packages from the US, far better than UPS and FedEx.

[op-tech-glitch.livejournal.com]

Executive order requiring congresscritters to start sorting and delivering the fucking mail themselves if the P.O. ever gets shut down.

[mikeyxw.livejournal.com]

Terrible idea. Congress has shown a lack of skill at both sorting and delivering.

[anfalicious.livejournal.com]

Our post office makes a profit, but it's not as good as yours. The question is do you want taxes to pay for a postal service. As some who has lived in a remote area I know how important the post is, and becoming even more so in the age of the internet (despite fears to the otherwise). I'd be fine with my taxes helping others to be able to have the benefits of 21st century society that I do.

[eracerhead.livejournal.com]

Well, it would help if congress repealed the 2006 "Postal Accountability and Enhancement Act" which put them in the red and created the crisis.

[il-mio-gufo.livejournal.com]

thnx for throwing this out there - i wonder what that Act was a cover for? hmmmm

[kylinrouge.livejournal.com]

True fact.

[onefatmusicnerd.livejournal.com]

Yes, the pre-funding requirement is amazing, imagine what would happen if the Department of Defense had the same requirement.

[stewstewstewdio.livejournal.com]

I think it's a little too late for this, but the law doesn't allow them to diversify or invest in other services. It probably would have helped a great deal if they could have had subsidiaries that were ISPs that hedged against Email cutting into their revenue.

The postal service is suffering the same fate that all companies face when they don't change with the times. One of the problems is that they are forced into unprofitable services like delivering to anybody, anywhere no matter how remote. UPS and FedEx get to choose their delivery locations and methods. The postal service doesn't have that luxury. Austerity measures like cutting services or reducing options may help temporarily, but their biggest enemy is just obsolescence.

[lurkerwisp.livejournal.com]

The thing you're ignoring is that when you talk about cutting service to rural areas, you're talking about cutting service to people who often don't have internet access. If you close post office service to these people you're cutting them completely out of contact with the rest of the country. This is a vital service for them, which is not even on its way to becomming obsolete.

[badlydrawnjeff.livejournal.com]

I've been an advocate of nuking the postal monopoly (http://talk-politics.livejournal.com/873323.html?style=mine#comments) for some time now. We don't need to outright privatize the post office just yet, but there's no reason why it can't be forced to compete and see if someone else can do it better at this point.

[musicpsych.livejournal.com]

I don't know... My assumption is that USPS mail revenue from more populated areas helps balance out low revenues or deficits from rural areas. Private companies wouldn't have to serve rural areas, so they could avoid those and just focus on the high revenue areas. That might cut into USPS profits, which would cause them to raise prices overall to offset the rural low revenues/losses. The USPS would compete, but it wouldn't be on an even playing field.

[rick-day.livejournal.com]

but are they REALLY in that bad a shape?

http://redtape.msnbc.msn.com/_news/2011/10/07/8191425-twisted-government-accounting-behind-postal-service-woes

pensions...it is lucre to Congressbugs

[allhatnocattle.livejournal.com]

Wow, your gov't is really weird. Don't trust them at all.

[il-mio-gufo.livejournal.com]

from that article: Welcome to the wacky world of Washington, D.C., accounting.

i'm sorry, but that city is just disgusting :( if y'all ever been there, then u know what i mean :/

[geezer-also.livejournal.com]

Thank you for posting that article!

[musicpsych.livejournal.com]

Sure!

[dwer.livejournal.com]

Fund it like an actual government agency.

[a-new-machine.livejournal.com]

Wait wait wait you want us to have to spend money to pay for government services? C'mon man. C'mon.

[paedraggaidin.livejournal.com]

Eh...I'm ambivalent about this. While I'm not one for the "privatize everything!!" argument, and I believe that there are certain vital functions that are properly reserved to the State, privatizing the mail has worked out alright for Germany.

[onefatmusicnerd.livejournal.com]

Germany is a densely populated country.

It has no city that is as remote as Adak, (51.8, 176.6)

[red-over-red.livejournal.com]

I have worked for the USPS previously. The USPS is an oddity, a quasi-government entity that is regulated by the government yet does not accept any taxpayer money.

There are many inefficiencies in the USPS that should be dealt with instead of arguing about what they are arguing about. The biggest threats to the USPS is postal management and Congress. The USPS was the first (and only) "union" job I've ever had. Although the union is good in that it protects the employees from ridiculous and unfair practices (which there are PLENTY of), at the same time it protects employees that should not be protected. The best way to breed apathy in a job is to have a position that you can't get fired from that isn't performance based. There were many good employees I worked with, but there were also a few bad apples who used the union protection as a crutch and kept their full time, good-paying job with the USPS despite being obscenely lazy or stupid, which breed more malcontent for the employees who showed up for work and had to work twice as hard for the same pay to pick up the other person's slack. That was my main complaint there, however there were other things, like ridiculously high pay for some positions that didn't deserve it, costly "details" and reassigns and other things of that nature.

In my opinion, the problem RIGHT NOW with the USPS currently is that it is required to pre-pay for retirement benefits for current and future USPS employees as per the "2006 Postal Accountability and Enhancement Act." I should emphasize that no other government entity or private company is required by law to do this. That is basically where the MAJORITY of the losses are coming from. Without this pre-paying for the next 75 years of retirement benefits the USPS would be posting profits, albeit small profits (somewhere between 200-300 million per year) for the size of the entity.

As someone already mentioned, it might not be as big of an issue in larger cities, where there are places to buy stamps and mail packages every few blocks. It's a problem in rural areas, like the midwest, intermontane west, and Alaska. When they start to discuss closing rural post offices, there are locations a person would need to drive 15-30 miles to get to the next post office. When they discuss closing processing centers, there are business discounts allotted to companies that drop their bulk mailing off at the processing center. Those companies might have to drive up to 200 miles under the current consolidation plan if they want their discount. If they cut delivery to less than 6 days per week, there are rural locations that depend on the USPS for delivering critical, time-sensitive packages, like medicines for people and livestock. Under the current consolidation plan, for example, SD, NE and WY are planning on closing all of their processing centers except Sioux Falls (extreme SE corner of SD). NE is closing all except Omaha (Eastern side of the state). The "consolidated" center at Casper WY (almost the center of WY) leaves huge amounts of rural areas they will have to truck that mail every day. There are several winter storms each year that leave huge amounts of SD, NE and WY impassible for days on end.

The USPS prides itself on going "the last mile." By that they mean that they deliver to every door, every house, every day. You can ship a package from anywhere in the United States to an APO for less than $15. $15 for something that is going halfway around the world is ridiculous. But the government regulates how much the Postal Service can charge for services. So whereas UPS or FedEx can set their own prices (usually 2 to 3 times as much as the USPS charges) to remain profitable the USPS gets flack every time they raise stamps 1 cent.

I think that the Postal Service is, above all, a SERVICE and should maintain their service standards as long as there are people who need it. The changes they are proposing will shoot the USPS in the foot. Nobody wants to pay more money for less service.

[musicpsych.livejournal.com]

Great comment. Thanks for posting - that's an interesting perspective. I live in the Chicago suburbs, and I have two post offices within a mile or so of my home, and a few more not too much farther than that. I guess I assumed it would be more offices like this that would close, and not reduce the rural coverage. Though maybe they look at it in terms of volume of mail and/or population.

It does seem like Congress is holding all (or at least most) of the cards, and that there are a lot of factors that are out of the USPS's control. The accounting described in that MSNBC article posted above (http://redtape.msnbc.msn.com/_news/2011/10/07/8191425-twisted-government-accounting-behind-postal-service-woes) seems unnecessarily complicated. If it's going to remain a service, it sounds like Congress needs to change something.

I was curious about the role unions were playing in this, but I didn't want the discussion to turn into a pro-union/anti-union argument. Thanks for your perspective on that, too.

[alcanis-ivennil.livejournal.com]

Get Moist von Lipwig. He'll fix it.

[abomvubuso.livejournal.com]

And the Golems!

[kardashev.livejournal.com]

"More and more people are doing things online that they would previously do via the mail - send messages, send birthday/holiday cards, pay bills, receive magazines/books/music, etc."

I rarely use it myself.

"However, not everyone in the U.S. can do these things online or is comfortable with it."

I'm guessing this is mainly the elderly but even oldsters are increasingly going online. As for other people without internet access, this number shrinks more and more with each passing year. One day, everybody is going to have some way of sending email.

"Still, is the decline of the postal service a sign that it's becoming obsolete?"

When coupled with the internet and FedEx, yes.

"If it still needs to exist, in what form should it exist?"

It's growing obsolete. It's surely going to wither and die someday. Say your goodbyes now while the patient is still breathing on his deathbed.

[gunslnger.livejournal.com]

It should be made completely private with no gov't support whatsoever.

[htpcl.livejournal.com]

Please stop spamming with the same comment over and over. One is enough. Thanks.