4 ms·

Isn't parcel volume up substantially right now? How could a post office be teetering when online retail is at unprecedented volumes right now?

• SteveJS 7y ago
  My understanding is, unlike any other government agency or business, the USPS is required by law to fully fund 50 years of pensions. If that requirement were removed, it would be fine.
  • 0xy 7y ago
    I totally agree with you, but why is it a problem right now? Parcel volumes are at dizzying heights.
    • SteveJS 7y ago
      According to the article revenue from advertising (junk mail) is down 40% while local businesses are mostly closed.
      • Exmoor 7y ago
        This is an anecdote not data, but I've heard several USPS delivery folks mention that a lot of long-tenured drivers decided to take vacation and sick time when the lockdown started ramping up. This has caused other drivers to pick up the slack so there may be a lot of overtime getting paid out.
      • 0xy 7y ago
        This doesn't wash. If advertising is down 40% and parcel services are up 150%, that's a substantial revenue increase overall. https://about.usps.com/who-we-are/financials/annual-reports/fy2018.pdf https://about.usps.com/who-we-are/financials/annual-reports/... I can't get the numbers to add up here. Even with letters down, advertising down then their revenue should either be flat or have a slight increase based on my guesstimate for their increase in parcel business.
  • diebeforei485 7y ago
    Businesses are required to fund their pension obligations. In any case USPS hasn't actually fully funded their pensions since the recession.
    • jdxcode 7y ago
      They’re required to PRE-fund the pensions which private businesses are not required to do
      • diebeforei485 7y ago
        Of course private businesses are required to pre-fund their pensions (with some exceptions like religious organizations). It's a requirement under the Employee Retirement Income Security Act of 1974. Lots more info here: https://www.forbes.com/sites/ebauer/2020/04/14/post-office-pensions--some-key-myths-and-facts/amp/ https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p...
• mlyle 7y ago
  Residential parcel volume is up. Commercial parcel volume is way down. Letter volume-- both residential and commercial, is way, way, way down.
  • 0xy 7y ago
    It's my understanding that parcels are where the money is. Is that wrong? Parcel volumes in my country are up north of 150%, I'd expect similar or even higher numbers in the US. But if they really are dependent on letters, why? Letters are a dying business and there is no future there.
    • AnthonyMouse 7y ago
      It's because they have a legislated monopoly on letters. For parcels they have to compete with UPS, FedEx and others, so they have to price those competitively or they'd get no business, which means they have thin margins there and even then lose a lot of the volume to competitors. But they can't just charge arbitrarily much for letters because people would stop sending them, which is really what they're doing regardless.
      • pseudalopex 7y ago
        They also can't charge arbitrarily much for letters because Congress tied rate increases to the Consumer Price Index.
• nickff 7y ago
  Most mail services make all their money on 'junk' mail. I don't know what the numbers for USPS are, but their biggest problem is likely the lack of advertising in the form of mass mailings.
  • joering2 7y ago
    Yes, the price of advertising in their inserts fell 40% literally week to week. They always send my busines an advertising opprtunity and my zipcode for minimum of 1000 mailpieces was $199 last week, and is down to $120 this week. Furthermore over 80% of advertising is for food and inhouse services - oil change, furniture shopping, pet grooming etc. Virtually all these businesses are shut off for the time being, hence no need to advertise.
  • 0xy 7y ago
    https://about.usps.com/who-we-are/financials/annual-reports/fy2018.pdf https://about.usps.com/who-we-are/financials/annual-reports/... If advertising is down 40%, and their parcel business is up 150%, they should be making way more money in this climate. 150% is my estimate, but I suspect it would actually be more than that.
    • jdxcode 7y ago
      Are the margins the same for both? I doubt it
• olefoo 7y ago
  The postal service is subject to a law saying it has to pre-fund it's benefit plans; this is due to a law passed by the Republican congress specifically so they could point to the USPS failing finances and use that as the excuse for privatising it. Just another part of our American heritage getting looted by private equity.
  • jariel 7y ago
    Uhm, pre-funding benefit plans seems like a very responsible thing to do, given that many entities completely avoid funding them thereby creating ever increasing black holes of liabilities. Without them, administrators have the ability to spend as they please by handing out future liabilities. And FYI 'heritage' is no business to keep something operational. Either it works well, or it doesn't.
    • kristopolous 7y ago
      Proactively sabotaging something and then using the consequences of the sabotage as evidence that it should be dismantled isn't "it either works or it doesn't". Such details actually matter. Incompetently legislating some thing to ruin isn't a failure of the thing, it's a failure of the people writing the legislation.
      • jariel 7y ago
        Requiring that benefits are accounted for is not 'sabotage', it's actually sound and transparent financial accounting. Such details actually matter! If, after the real cost of operating USPS is exposed and they cannot cover it with revenues - or - cannot be subsidised enough - then the US can make a more rational decision as to whether or not it should exist.
        • locopati 7y ago
          they are being required to prefund for 75 years.... no govt body has that requirement does the military cover itself with revenues? why is that okay but a public service like the mail is not?