U.S. Postal Service Has Not Earned a Profit in Almost a Decade

originally posted by: intrepid
I can't believe I'm about to say this but Neo is right. The gov. can no longer sustain this service. Companies like FedEx have been killing them for years. The internet is even a bigger drain. Our gov't is in the process of eliminating home delivery. You know those rural boxes? They are in towns and cities now. I don't like it but I try to understand it.

It could be sustained just fine if the USPS wasn't having to pay an extra $5 billion per year to fund the retirements for people who aren't even born yet. Without that mandate (which if the USPS can make the payments on time will end with 2016) they would be profiting $1 billion per year.

a reply to: Aazadan

I'm assuming that USPS is pretty much like Canada Post, which I worked for as a letter carrier 30 years ago. Good times for them. Little competition. They had the mail delivery, that included a lot of parcels(not anymore) and they had the advertising. That's mostly gone now with the Net and independent delivery services that do the ad flyers. You can't maintain a service with seriously diminished revenue.

ETA: Hell, even newspapers are getting in on the advertising delivery.

a reply to: jimmyx
a reply to: AlaskanDad

Intelligence or any other talent regresses towards the mean. The elite will never have all of the genes for invention and creation and entrepreneurship, unless they can manufacture awesome genes.

In a free market system, the big money is made by selling to the masses. Nearly all, 90% at least, of new tech and such will come from the masses and be sold to the masses.

The elite only have control when power is centralized. They can be bypassed otherwise.

ETA the USPS is an example of the elite keeping themselves in the loop, because it is a state govt mandated monopoly. The USPS would have died a natural death in the 1800's otherwise.

originally posted by: intrepid

originally posted by: jimmyx

originally posted by: neo96

originally posted by: MystikMushroom
a reply to: neo96

The USPS was created by powers given to congress by the constitution, it wasn't really ever meant to make money or profit. The USPS was supposed to help with trade and commerce, infrastructure and communication between the states. It ranked right up there with the creation of the Navy to the framers.

Mystik?

It's the 21st Century.

It had a time, and place.

We have moved so beyond it.

now that's funny, neo 96......care to apply that same logic to the 2nd amendment? or the 1st?, or the 4th?....

I can't believe I'm about to say this but Neo is right. The gov. can no longer sustain this service. Companies like FedEx have been killing them for years. The internet is even a bigger drain. Our gov't is in the process of eliminating home delivery. You know those rural boxes? They are in towns and cities now. I don't like it but I try to understand it.

Hell haf done frozen over.

a reply to: intrepid

Letter writing has declined in favor of email but that for the most part only put an end to small labor intensive documents. With a 50 cent stamp (or whatever they cost these days) you need to process them and have a mail carrier deliver 10 of them just to make $5, it's more of a service than a money maker. The money in mail delivery is in packages and time sensitive documents, coincidentally the same things UPS and FedEx focus on. It requires the same effort to ship a package that costs $30 as it does to ship a small letter, but you have to deliver far more small letters to far more houses than that one package requires. Then when you get to time sensitive documents which are typically lightweight but need overnight service across the country you get into a very profitable area because it costs so much less to mail them but you can charge for the speed.

So while total mail volume has gone down, the most profitable areas have actually increased and the USPS has been doing a much better job at shipping those items than UPS and FedEx have.

originally posted by: Aazadan
a reply to: intrepid

Letter writing has declined in favor of email but that for the most part only put an end to small labor intensive documents. With a 50 cent stamp (or whatever they cost these days) you need to process them and have a mail carrier deliver 10 of them just to make $5, it's more of a service than a money maker. The money in mail delivery is in packages and time sensitive documents, coincidentally the same things UPS and FedEx focus on. It requires the same effort to ship a package that costs $30 as it does to ship a small letter, but you have to deliver far more small letters to far more houses than that one package requires. Then when you get to time sensitive documents which are typically lightweight but need overnight service across the country you get into a very profitable area because it costs so much less to mail them but you can charge for the speed.

I somewhat agree. BUT how is it you don't know what it costs to mail a letter? See? It's a dying service. 77 cents in Canada.

So while total mail volume has gone down, the most profitable areas have actually increased and the USPS has been doing a much better job at shipping those items than UPS and FedEx have.

THAT I disagree with. The delivery companies do a MUCH better job with time sensitive correspondence. The fact that most people choose them should be an indicator.

a reply to: Semicollegiate


Assumption and opinions, you seem to avoid facts at all costs, why is that?

originally posted by: AlaskanDad
a reply to: Semicollegiate


In a Free market should not a government be allowed to participate, i.e. the USPS?

The USPS was competitive until the prepayment of 75 years of retirement was required of it.

The retirement requirement sounds like a cash cow. The govt will bail out the USPS long term, but take any real time money the USPS has in its retirement fund.

If the govt can do it better than the free market, then the govt will be used to do it. The govt will never be better than the free market long term, and maybe not even now. The current situation gives some govt programs inertia that could make them more user friendly or cheaper for some time. Because resources have already been put in place for the govt's use and no other use.

a reply to: AlaskanDad

Regression towards the mean is not a fact?

More genetic talent coming from 99% of the population as compared to 1% of the population is not self evident?

How does it not follow that 99% of the population can sell to 99% of the population,--- unless the 1% has absolute control?

The 1% can only control the 99% through centralized political power, i.e. national or worldwide centralized government.

originally posted by: intrepid
I somewhat agree. BUT how is it you don't know what it costs to mail a letter?

See? It's a dying service. 77 cents in Canada.

I don't know what it costs to mail a letter because the price of stamps keeps going up. I buy one book of stamps per year which is enough to mail my rent check in (I do online bill pay for everything else) as well as send several packages, birthday cards, etc.

The biggest consumer of postage services is time sensitive documents and packages, I send neither but businesses send a lot of them.

THAT I disagree with. The delivery companies do a MUCH better job with time sensitive correspondence. The fact that most people choose them should be an indicator.

I'm curious, how would you rate a better job in this context? It's tough to argue the point without defining some metrics. They all offer overnight and 2 day shipping, they all have drop boxes to pick things up, the USPS can even come to your door for pickups, they all have office locations to drop off, the USPS charges a lower fare for the package (usually). Is it in insurance? Does FedEx deliver at a more convenient time during the day? What sort of metric makes them better at it?

Most of what I've seen in this thread is people saying FedEx is better simply because they're not the government.

We may wonder why the congress is requiring a 75 year prepaid retirement from USPS? It would seem like all laws that are passed the corporate lobbyists have been at work behind the scenes.

UPS 2014
Total Lobbying Expenditures: $7,593,995
Subtotal for Parent United Parcel Service: $7,593,995
source

FedEx 2014
Total Lobbying Expenditures: $13,414,536
Subtotal for Parent FedEx Corp: $13,414,536
source

a reply to: Aazadan

Whatever I say won't matter, even if I worked in the industry. Prove it to yourself. Send 2 packages for overnight and see which one gets there first.

originally posted by: Aazadan
...the USPS can even come to your door for pickups...

UPS and FedEx do this as well.

Does FedEx deliver at a more convenient time during the day?

You can schedule a delivery window with FedEx and UPS to make sure you are home for the delivery. They also have better early morning delivery guarantees than the USPS.

Most of what I've seen in this thread is people saying FedEx is better simply because they're not the government.

I personally use them because I think they have better service than both UPS and the USPS.

a reply to: intrepid

Can you mail a letter for 50 cents with UPS or FedEx?

Maybe they (UPS & FedEx) feel threatened by the competition?

Or possibly they see if the competition of the USPS was removed they could raise prices and increase profits?

Maybe I'm off but if I am not mistaken they didn't break into the supply chain logistics segment until the early 90's. Could be they didn't catch on quick enough to how things were changing. Again could be wrong. Maybe late to the dance on revenue sources other than simple delivery?????

a reply to: AugustusMasonicus

In some locales UPS and FedEx may do home pickup, but not where I live!

originally posted by: AlaskanDad
In some locales UPS and FedEx may do home pickup, but not where I live!

I am sure you are the exception:

Alaska

From pickup to delivery, FedEx Freight offers the ease and convenience of working with one carrier for all your Alaska shipments. That means one phone call, one Bill of Lading and one website. Plus, all ground and ocean charges are incorporated into one invoice to simplify your paperwork.

originally posted by: AlaskanDad
a reply to: intrepid

Can you mail a letter for 50 cents with UPS or FedEx?

Nope but when will it eventually get there? It's call "snail mail" for a reason.

Maybe they (UPS & FedEx) feel threatened by the competition?

They stole the market from USPS. And then did it better.

Companies like Amazon are breathing new life into the USPS. With e-commerce, more people than ever are shopping online.

One important point to consider. Right now, your piece of mail is private. It is unlawful for anyone to open it if sent by the USPS. This is why it's illegal for someone else to take your mail or read your mail.

Your mail is sealed against inspection by law if it is mailed first class. A judge has to issue a warrant for it to be opened. There are certain circumstances where this can be circumvented; but by and large this holds true.

If you send the same letter or packages via UPS or FedEx, they can open whatever you send at any time, whenever they want.

Part of having the USPS be affiliated with the government is to ensure the privacy of our mail. I wouldn't want political mailings sent to me opened and inspected, marking me as a "X" leaning or "Y" leaning. I wouldn't want to send copies of my patents to someone via FedEx, knowing they could possibly be opened and stolen. Important legal documents, insurance paperwork, credit applications -- all of these could be opened and looked at arbitrarily by a private postal company.

When you send something via a private carrier, you waive your right to privacy and to be secure in your possessions.

originally posted by: MystikMushroom

Companies like Amazon are breathing new life into the USPS. With e-commerce, more people than ever are shopping online.

The challenge with that, as I posted earlier, is this business is very low margin which is why FedEx and UPS are getting out of much of it.