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USPS Estimates $230 Billion in Losses over Next 10 Years

12 points by physcab 17y ago

javery 17y ago
Maybe they should stop saturday delivery and stop undercutting FedEx and UPS on shipping charges and they might stop losing money. The government only stops them from expanding their business and closing rural branches. Also sell sponsorships on the carrier vehicles, like "If you had netflix we would be delivering you a movie right now"
- kvs 17y ago
  They can perhaps take dual roles of other government agencies too, like US Census.
jcnnghm 17y ago
Perhaps private shipping companies should be allowed to compete in this sector.
- phsr 17y ago
  Do UPS, FedEx and DHL not count?
  - MikeCapone 17y ago
    They don't deliver standard mail, afaik.
  - travisp 17y ago
    As I understand it, they're not allowed to compete with letter delivery/first class mail: http://en.wikipedia.org/wiki/Private_Express_Statutes http://en.wikipedia.org/wiki/Private_Express_Statutes
    - phsr 17y ago
      Ah ok, I didn't know about these statutes, very interesting
      - Daniel_Newby 17y ago
        Indeed. It is of importance to legal processes, where an unstamped hand-delivered letter is in some sense undelivered.
ovi256 17y ago
Each time a discussion about a public service comes up, I feel obliged to remind that even if a public service is not financially viable, it may have positive externalities that it cannot capture, but that make the whole venture more-than-viable to society. The Post Service is a classic example of such a service. They serve remote areas and communities that commercial delivery services would not cover, therefore jumpstarting commerce there. Otherwise these communities would be economically isolated and would wither away. The state usually recovers their expenses soon, given that increased commerce means increased tax income. Also, this is a form of long-term investment for the society as a whole that is non-obvious and for which other mechanisms do not exist.
- dougp 17y ago
  I would buy the public service line if more then half of our mail didn't go straight into the trash. I am excited when I see a Fedex box on the door step. Not so much when I see a mail box full of junk addressed to current resident.
  - raganwald 17y ago
    Alas, the junk is why they only expect to lose B$238 instead of B$500. Well, I can only speak for Canada, but up here they get a huge amount of revenue from delivering junk mail. I sympathize with you, there's so much of the stuff that I am tempted to place a blue recycling bin marked "Current Resident" on my door step with a slot in the side for mail :-) I can only guess that all that junk works. And I suppose it does... I keep the ones for local restaurants that deliver what may be good food...
    - xinsight 17y ago
      True, commerical mail seems to be their main business. I've heard of supervisors get mad at letter carriers who have too many households who don't wish to receive flyers and ads. And there doesn't seem to be any way to refuse "Adressed Admail" except by contacting the company that sends it. Something the post office could do is to leverage their local infrastructure and work with the couriers. If I miss a UPS delivery, and have to ask nicely to get a 2nd delivery attempt. Picking up the package at the local post office would be a lot easier for everyone.
CoachRufus87 17y ago
this is one industry that could benefit from privatization, or at least they could adopt some practices from the private sector and become more lean.
scotch_drinker 17y ago
It's interesting that 3 studies came up with the conclusion that the business model of the USPS is so poor privatization is untenable without considering the fact that maybe privatization would come up with a better business model. Right now, the USPS is a government sponsored monopoly that is failing spectacularly. Allowing private companies into the market might not only improve the business model but come up with something fantastically different that fits the needs of the consumers. Looking at a failed business model and saying "That model is so bad even private companies couldn't fix it" seems like putting the cart before the horse. Private companies are going to find their own business model, one that isn't terrible, because their livelihood depends on it.
- deleted 17y ago
  [deleted]
- psranga 17y ago
  They're "failing" just as much as private health insurance is "succeeding". Just leave the USPS as is and do the incremental fixes required to make them break even. No need for them to make a profit.
  - scotch_drinker 17y ago
    If that's true, then private health insurance is indeed succeeding spectacularly! I don't think that's what you mean though. But if the money alone is the judge, losing $230 billion over 10 years is very serious failure if you ask me. I'm curious what incremental changes could change the failure faster than giving private companies a shot to see what they come up with.
roboneal 17y ago
Simple story - large labor intensive service with massive legacy costs (millions of retirees and the physical infrastructure to move mail to every corner of the U.S.) meets dramatic drop in demand caused by technological disruption (faxes in the 80s to Internet/Email in the 90s).
veqon 17y ago
A client of mine wanted to automate her invoicing. As part of that project I used the USPS API to get the postal rate. First of all, their documentation is just plain wrong. It will not work if you follow their documentation. After a frustrating few hours I googled it and found a site that explained everything that was wrong with it. http://www.marksanborn.net/php/calculating-usps-shipping-rates-with-php/ http://www.marksanborn.net/php/calculating-usps-shipping-rat... Secondly, my client complains that the USPS should have someone she can contact that gives her all the info she needs to use their services. But instead what she has found is some info from one person, conflicting info from another, and no one who can explain everything. The USPS does a terrific job of delivering mail at a very reasonable rate, but they need to fix the problems outlined above if they want to compete.

12 points by physcab 17y ago

Maybe they should stop saturday delivery and stop undercutting FedEx and UPS on shipping charges and they might stop losing money. The government only stops them from expanding their business and closing rural branches. Also sell sponsorships on the carrier vehicles, like "If you had netflix we would be delivering you a movie right now"

kvs 17y ago
They can perhaps take dual roles of other government agencies too, like US Census.

jcnnghm 17y ago

Perhaps private shipping companies should be allowed to compete in this sector.

phsr 17y ago
Do UPS, FedEx and DHL not count?
- MikeCapone 17y ago
  They don't deliver standard mail, afaik.
- travisp 17y ago
  As I understand it, they're not allowed to compete with letter delivery/first class mail: http://en.wikipedia.org/wiki/Private_Express_Statutes http://en.wikipedia.org/wiki/Private_Express_Statutes
  - phsr 17y ago
    Ah ok, I didn't know about these statutes, very interesting
    - Daniel_Newby 17y ago
      Indeed. It is of importance to legal processes, where an unstamped hand-delivered letter is in some sense undelivered.

ovi256 17y ago

Each time a discussion about a public service comes up, I feel obliged to remind that even if a public service is not financially viable, it may have positive externalities that it cannot capture, but that make the whole venture more-than-viable to society. The Post Service is a classic example of such a service. They serve remote areas and communities that commercial delivery services would not cover, therefore jumpstarting commerce there. Otherwise these communities would be economically isolated and would wither away. The state usually recovers their expenses soon, given that increased commerce means increased tax income. Also, this is a form of long-term investment for the society as a whole that is non-obvious and for which other mechanisms do not exist.

dougp 17y ago
I would buy the public service line if more then half of our mail didn't go straight into the trash. I am excited when I see a Fedex box on the door step. Not so much when I see a mail box full of junk addressed to current resident.
- raganwald 17y ago
  Alas, the junk is why they only expect to lose B$238 instead of B$500. Well, I can only speak for Canada, but up here they get a huge amount of revenue from delivering junk mail. I sympathize with you, there's so much of the stuff that I am tempted to place a blue recycling bin marked "Current Resident" on my door step with a slot in the side for mail :-) I can only guess that all that junk works. And I suppose it does... I keep the ones for local restaurants that deliver what may be good food...
  - xinsight 17y ago
    True, commerical mail seems to be their main business. I've heard of supervisors get mad at letter carriers who have too many households who don't wish to receive flyers and ads. And there doesn't seem to be any way to refuse "Adressed Admail" except by contacting the company that sends it. Something the post office could do is to leverage their local infrastructure and work with the couriers. If I miss a UPS delivery, and have to ask nicely to get a 2nd delivery attempt. Picking up the package at the local post office would be a lot easier for everyone.

CoachRufus87 17y ago

this is one industry that could benefit from privatization, or at least they could adopt some practices from the private sector and become more lean.

scotch_drinker 17y ago

It's interesting that 3 studies came up with the conclusion that the business model of the USPS is so poor privatization is untenable without considering the fact that maybe privatization would come up with a better business model. Right now, the USPS is a government sponsored monopoly that is failing spectacularly. Allowing private companies into the market might not only improve the business model but come up with something fantastically different that fits the needs of the consumers. Looking at a failed business model and saying "That model is so bad even private companies couldn't fix it" seems like putting the cart before the horse. Private companies are going to find their own business model, one that isn't terrible, because their livelihood depends on it.

deleted 17y ago
[deleted]
psranga 17y ago
They're "failing" just as much as private health insurance is "succeeding". Just leave the USPS as is and do the incremental fixes required to make them break even. No need for them to make a profit.
- scotch_drinker 17y ago
  If that's true, then private health insurance is indeed succeeding spectacularly! I don't think that's what you mean though. But if the money alone is the judge, losing $230 billion over 10 years is very serious failure if you ask me. I'm curious what incremental changes could change the failure faster than giving private companies a shot to see what they come up with.

roboneal 17y ago

Simple story - large labor intensive service with massive legacy costs (millions of retirees and the physical infrastructure to move mail to every corner of the U.S.) meets dramatic drop in demand caused by technological disruption (faxes in the 80s to Internet/Email in the 90s).

veqon 17y ago

A client of mine wanted to automate her invoicing. As part of that project I used the USPS API to get the postal rate. First of all, their documentation is just plain wrong. It will not work if you follow their documentation. After a frustrating few hours I googled it and found a site that explained everything that was wrong with it. http://www.marksanborn.net/php/calculating-usps-shipping-rates-with-php/ http://www.marksanborn.net/php/calculating-usps-shipping-rat... Secondly, my client complains that the USPS should have someone she can contact that gives her all the info she needs to use their services. But instead what she has found is some info from one person, conflicting info from another, and no one who can explain everything. The USPS does a terrific job of delivering mail at a very reasonable rate, but they need to fix the problems outlined above if they want to compete.