Postal Service warns of default as losses mount

Postal Service warns of default as losses mount

money.cnn.com

The U.S. Postal Service warned Wednesday that it may default on some of its financial obligations later this year after reporting yet another quarterly loss.

The USPS, a self-supporting government agency that receives no tax dollars, said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That compared with a loss of $297 million a year earlier.

The agency said it will be forced to default on some of its financial obligations this year

(visit the link for the full news article)

Here is another example of government incompetence. The entire business model that serves the postal service has been obviously declining for decades, yet the postal service has been unable to get in front of it. Clearly were it to be a private business, it would have gone under probably a decade ago.

They have a monopoly in daily mail delivery, yet continue to lose money - and I realize that the government has some say in the costs of postage. Were mail delivery to be in private hands and the true cost to deliver mail was $1, they would charge $1.

I don't think that there is any reason that mail needs to be delivered more than once/twice a week and never on weekends. If you want daily delivery, you can get a postal box and go on over and get it.

Chat with your mail carrier and they will tell you that they typically measure mail in a route in feet - 12 feet of mail that day for that route. The amount of mail has been steadily declining for a long time and it will only continue to do so. The workers get paid hourly and when they go from 12 feet to 6 they work 1/2 a day, so it is not good for the workers either.

The postal service should be sold and privatized and people should be heavily incented to push their transactions to electric format.

The environmental impact of doing that would also be significant.

It would be very interesting to see lobbies on behalf of the status quo. Certainly the unions, but also the recycling shops like Waste Management, the paper industry, autos, gas/oil. The whole business is a mess.

Not going to make the unions happy, but thems the breaks

money.cnn.com
(visit the link for the full news article)

reply to post by dolphinfan


Not only that but courier services like DHL and FedEx have become almost the de-facto standard for mailing they days. There are so many of them now that the cost of using them versus the Postal Service is nearly same yet the couriers typically offer better service.

Regular folks use couriers more too these days as a result of online commerce. Couple this with things like e-mail and VOIP, and the Postal Service seems quite quaint. I seem to remember reading somewhere that now most of the Postal Service's business actually comes from bulk mail. I imagine as the economy gets worse,even bulk mail is going to decrease pretty rapidly. Online ads are the way to go and much cheaper.

reply to post by dolphinfan


You know, I kind of agree. I don't think people should be forced in to electronic mail. I do think that Saturday mail needs to end though. I also think they need to investigate going to a Monday - Wednesday - Friday delivery schedule.

People are moving away from the paper delivery method. However, a lot of older Americans are technologically behind the times. My dad is in his fifties. He doesn't have a computer or the internet. There are actually still a lot of people out there that either choose not to be on the internet, choose to use dial up, or can not get high speed access at a price they can afford. Doing away with the postal service would cause hardships for some of these people. It would definitely be a burden for some rural people that have their local post office on the chopping block in coming closings.

Originally posted by dolphinfan
Were mail delivery to be in private hands and the true cost to deliver mail was $1, they would charge $1.

Oh, really? Do you think a private company would want to do something non-profit? If the true cost was $1, they would charge a bit more to make money.

And do you think that forwarding mail would be free? Nah, you'd be paying a bit extra for that, too.

Originally posted by dolphinfan
I don't think that there is any reason that mail needs to be delivered more than once/twice a week and never on weekends. If you want daily delivery, you can get a postal box and go on over and get it.

It's a toss up. The cost of delivering mail, or the cost to maintain facilities for all the postal boxes. I'm certain that most people, especially in this day and age of, "I ordered it three hours ago, why isn't it here yet??!!" will want their mail delivered more than just once a week.

Originally posted by dolphinfan
The amount of mail has been steadily declining for a long time and it will only continue to do so.

What's your definition of "a long time"? It has been declining, but only since around 2006 or 2008 (can't remember which).

Originally posted by FlyingJadeDragon
Not only that but courier services like DHL and FedEx have become almost the de-facto standard for mailing they days. There are so many of them now that the cost of using them versus the Postal Service is nearly same yet the couriers typically offer better service.

USPS offers Saturday delivery where some, like UPS, doesn't. That's attractive to some. And there was something I saw a few months ago about USPS actually handling packages better than the others. Not as many bumps and drops.

Originally posted by FlyingJadeDragon
I seem to remember reading somewhere that now most of the Postal Service's business actually comes from bulk mail.

It does.

I have a good friend who has worked for the post office for almost 30 years. Probably for the past 15 years his job has been as a dispatcher at his mail facility telling trucks where to park. He gets one week off EVERY month with pay, and makes like $70,000 a year. And he gets vacation time. Its ridiculous! There are people at the post office who may WAY TOO much money for the stupid job they do. But because he has seniority...he gets paid at lot. I see this as a part of the problem.....

Originally posted by liveyourlife
I have a good friend who has worked for the post office for almost 30 years. Probably for the past 15 years his job has been as a dispatcher at his mail facility telling trucks where to park. He gets one week off EVERY month with pay, and makes like $70,000 a year. And he gets vacation time. Its ridiculous! There are people at the post office who may WAY TOO much money for the stupid job they do. But because he has seniority...he gets paid at lot. I see this as a part of the problem.....

That speaks volumes, because I'm fairly sure almost every federal job is like that.

Originally posted by liveyourlife
I have a good friend who has worked for the post office for almost 30 years. Probably for the past 15 years his job has been as a dispatcher at his mail facility telling trucks where to park. He gets one week off EVERY month with pay, and makes like $70,000 a year.

Hmmmm....gonna raise the BS flag on this one. Mainly because I work at the PO and I don't know of anyone that gets a week off with pay each month, unless they are taking vacation.

Originally posted by liveyourlife
There are people at the post office who may WAY TOO much money for the stupid job they do.

The people at the PO aren't making a lot of money; pay just kept up with inflation.

And keep in mind your lame comment about the "stupid" job they do next time you see a mail carrier out in a freakin' blizzard trying to deliver your mail.

Originally posted by liveyourlife
But because he has seniority...he gets paid at lot. I see this as a part of the problem.....

So, you're against the whole, "If you have seniority, you get more money" plan, huh? Well, do you know that 99.9% of the companies out there operate with that very plan?

I think even Mickey D's does that; I don't know, you tell me when you report for work tomorrow.

I do what you would call bulk mailings - employer letters, tax statements - nothing like the advertising crap stuffing your mailbox. My wife and I have been in this business for 30 years now and the postal service is something to behold. High speed addressed mail has a very narrow acceptability window for their computer systems to read. Miss it by 10% and they won't take it. Now they're moving to an "intelligent" bar code - those little square blotches that you are starting to see on your mail. This forces mailing companies like ours to either replace working machinery with new or stop bulk mailing. The postal service in order to automate is creating demands on their customers (mail companies) that are driving them to other vendors for delivery services. They've been doing this for years first with their requirements and now with secondary requirements. Most people don't know that when any bulk mail is delivered to a postal facility, it is opened to see if it meets their requirements. Recently, we mailed tax statements for a charity. Well, they didn't have anything in the envelope asking for money so it was classified not as non-profit and charged an additional $2,000 in postage and I had to imprint new mailing permits on each piece of mail for them. Things like this are going to kill them and they just keep doing it. Take the damn mail and deliver it not actually look for something wrong with it.

In my personal opinion, the postal service missed the boat at the birth of email. What I tried to tell our postmaster is that if they offered a paid email service to replace paper delivery they would own the email industry. He ran it up the line and (wait for it..........) one word. Union.

reply to post by jerico65


I absolutely don't think that the private firm would deliver the mail at break even. They would charge as much as they could and that is what they should do.

Mail delivery is being subsidized. We can either tolerate a money losing proposition with the status quo, or try something different, like privatization.

I understand that there are folks for what ever reason don't want to move to an electronic environment. Too bad. Mail is going to continue to decline and the level of subsidy will continue to go up. It has to. If you have one gent on a road who is the only person who wants to get daily delivery when every other person on the road does not, you have to have all of the infrastructure that you need to deliver it to everyone. What that means is that the folks who don't use the postal service will be paying for those who do - it is a wealth transfer. At some point you tell folks that "sorry, but we are just not going to do business the same way, get on line, get a PO box, and if you don't want to do that, deal with getting your mail once a week"

As far as the PO box vs. delivery, the PO box is massively cheaper. The mail is already sorted. It can easily be placed in a box. You don't need the trucks, carriers, gas, drivers, none of it.

Originally posted by dolphinfan
I absolutely don't think that the private firm would deliver the mail at break even. They would charge as much as they could and that is what they should do.

Even if it's $2? Or $3?

Originally posted by dolphinfan
At some point you tell folks that "sorry, but we are just not going to do business the same way, get on line, get a PO box, and if you don't want to do that, deal with getting your mail once a week"

Which is probably what most private companies would do.

Originally posted by dolphinfan
As far as the PO box vs. delivery, the PO box is massively cheaper. The mail is already sorted. It can easily be placed in a box. You don't need the trucks, carriers, gas, drivers, none of it.

Massively? Not so sure about that. Have to rent/buy the building where the boxes are. Upkeep for the building. Electricity, plumbing (people have to work there to case the mail. Gonna have them peeing in the bushes or gonna supply them with a restroom?), heating/cooling. And gas? Well, the mail has to get there somehow.....

Originally posted by billxam
Things like this are going to kill them and they just keep doing it. Take the damn mail and deliver it not actually look for something wrong with it.

And if there something wrong with it, and it costs the PO money? How does that make any sense? Or what if they found something wrong in your favor? Guess they just need to shut up and deliver it, huh?

Originally posted by billxam
In my personal opinion, the postal service missed the boat at the birth of email. What I tried to tell our postmaster is that if they offered a paid email service to replace paper delivery they would own the email industry. He ran it up the line and (wait for it..........) one word. Union.

Don't know about that, but email did kill the personal letter, that's for sure.

reply to post by dolphinfan

Mail delivery is being subsidized.

From your own source at the top of page one,

The USPS, a self-supporting government agency that receives no tax dollars

So, who is subsidizing the USPS?

I'm not trying to be argumenitive. I just want to know who it is since your article doesn't list any subsidies.

ETA:
According to your article the amount of mail being delivered went up 1.5% in the quarter they are discussing. So, I guess that blows your massive continued decline statement out of the water. It isn't thriving like it was in 1996. However, it is actually seeing growth.

Originally posted by dolphinfan
reply to post by jerico65

 

At some point you tell folks that "sorry, but we are just not going to do business the same way, get on line, get a PO box, and if you don't want to do that, deal with getting your mail once a week"

As far as the PO box vs. delivery, the PO box is massively cheaper. The mail is already sorted. It can easily be placed in a box. You don't need the trucks, carriers, gas, drivers, none of it.

A small (5" x 4" I'm guessing) PO Box costs about $10 bucks a month to rent not to mention the cost of driving to the Post Office in both time and gas, something I'm willing to bet most people wouldn't go for.

What is killing the USPS is email and electronic billing. I pay 2 bills a month, my cell phone and my internet bill. I pay both online using a credit card. Why? Simple, both my cell phone and internet provider decided to implement a $3 dollar fee to accept my payment in person.

UPS and FedEx have a slight advantage over the Post Office in regards to their package tracking abilities. They both can tell you exactly where your package is, while the Post Office can tell you where your package SHOULD be. This is something that the USPS has significantly improved over the past year or so although it isn't perfect.

Take a look at this tracking information from UPS:

Location Date Local Time Activity
Commerce City, CO, United States 02/09/2011 3:00 A.M. Adverse weather conditions.
02/09/2011 12:36 A.M. Departure Scan
02/09/2011 12:35 A.M. Arrival Scan
Salt Lake City, UT, United States 02/08/2011 2:48 A.M. Departure Scan
Salt Lake City, UT, United States 02/07/2011 10:40 P.M. Arrival Scan
Ogden, UT, United States 02/07/2011 9:49 P.M. Departure Scan
02/07/2011 6:29 P.M. Origin Scan
United States 02/07/2011 3:49 P.M. Order Processed: Ready for UPS

Now take a look at what the US Post Office has for tracking information:

Class: First-Class Mail®
Service(s): Delivery Confirmation™
Status: Delivered

Your item was delivered at 10:29 am on February 08, 2011 in SHARPSBURG, GA 30277.
Detailed Results:

Bullet Delivered, February 08, 2011, 10:29 am, SHARPSBURG, GA 30277
Bullet Out for Delivery, February 08, 2011, 8:17 am, SHARPSBURG, GA 30277
Bullet Sorting Complete, February 08, 2011, 8:07 am, SHARPSBURG, GA 30277
Bullet Arrival at Post Office, February 08, 2011, 7:35 am, SHARPSBURG, GA 30277
Bullet Processed through Sort Facility, February 08, 2011, 3:45 am, ATLANTA, GA 30320
Bullet Processed through Sort Facility, February 07, 2011, 7:01 pm, ATLANTA, GA 30320
Bullet Processed through Sort Facility, February 04, 2011, 11:09 pm, FORT WORTH, TX 76161
Bullet Electronic Shipping Info Received, February 04, 2011

Not quite the same but it cost $1.73 to mail a 1 ounce package with delivery confirmation by USPS compared to $11.40 to ship the same 1 ounce package via UPS.

Just my 2 cents.

The USPS is self supporting. No money from Congress, just rules and requirements.

In fairness it's difficult for the Post Office to compete because they are forced to have a post office building and employees in every rinky dink small town in America. DHL/Fedex/UPS only put locations where it's most profitable.

But I will agree that overall it's not run as well as it should be simply because it's a government entity and there's no oversight or cost cutting that a normal company would have.

Originally posted by liveyourlife
I have a good friend who has worked for the post office for almost 30 years. Probably for the past 15 years his job has been as a dispatcher at his mail facility telling trucks where to park. He gets one week off EVERY month with pay, and makes like $70,000 a year. And he gets vacation time. Its ridiculous! There are people at the post office who may WAY TOO much money for the stupid job they do. But because he has seniority...he gets paid at lot. I see this as a part of the problem.....

I have heard of some "ethnic groups" but it pertains to all federal postal employees... that have "drug problems" get to go to "club fed" for months of relaxing, therapy and detox.. with full pay benefits and paid for with your tax dollars... not THATS A PROBLEM... POOR SOULS THEY ARE THE VICTIM OF SOCIETY... NOT REALLY THEIR FAULT YOU KNOW......

Great. Another Govt agency shows losses and mass debt. Can't wait for the same people to get control of Health Care.

reply to post by bluestar.ranch


Obviously you have heard a lie. The USPS does not recieve tax dollars to pay for anything. Most definitely not rehab at "club fed."

Sometimes I wonder if anybody on ATS actually reads the articles.