11 ms·

The U.S. Postal Service Nears Collapse

126 points by jedwhite 15y ago

pseudonym 15y ago
A link for the full article, if you don't want to hit "next page" seven times: http://www.businessweek.com/print/magazine/content/11_23/b4231060885070.htm http://www.businessweek.com/print/magazine/content/11_23/b42...
latch 15y ago
I found myself surprised to agree with the USPS position that online-services are a bad idea (for the USPS). I mean generating a postcard from your mobile picture just seems like something that a tech-company will do a better job at. I can only imagine how much money the USPS would spend on some of these applications, only to have a startup with $250K funding (or, you know, Facebook) steamroll them.
- justincormack 15y ago
  Yes I dont think thats whats making money in Europe. Deutsche Post is making money from owning DHL I think. Not that USPS buying fedex is likely. Closing post offices has reduced costs, delaying the issues. Here in the uk we are in a similar position to the US. There is a shift to banks and utilities sending by email, and junk is shifting to phone as it is more effective. However merging and being profitable has probably helped some of these outside the uk be less government minded and more commercial.
- enko 15y ago
  >> generating a postcard from your mobile picture just seems like something that a tech-company will do a better job at I think the point was that the overseas mail services have become tech companies.
- nikcub 15y ago
  I agree with that - but they should at least build an API that would let other applications send digitally-generated mail, or to order stamps, get parcel information, tracking details etc.
- rmrm 15y ago
  I think USPS would have been in a great position to be an online identity depository and payment platform for consumer to business dealings. They should have done it 10 years ago. Imagine an email like system where you and the companies you do business with can communicate, and you can pay them. Some sort of whitelisted communications channels, whereby when you enter in a service contract with a company, you also add them to this comm channel. No spam. Just valid communications and invoices. Verified identities and verified payments. The USPS is in a great position for that sort of thing, being they actually come to your house every day. They already know who you are, and where you are. They have a pre-existing business relationship with every entity in the US. Whereas now I have to tell my parents and grandparents to basically not believe anything they see in their email inbox -- it would be nice if a more secure channel existed. $250K startup -- get on it!
  - philwelch 15y ago
    The USPS has a shitty track record for not spamming people. Maybe half of my mail is spam. While the USPS might have been in a position to do as you suggest for quite some time, the fact that they haven't indicates something, doesn't it?
    - rmrm 15y ago
      The USPS (or Fedex or UPS or DHL or anyone else) were not conceived to be whitelisted services - they just deliver stuff. USPS does it cheaply, so bulk mailers use them. I don't know the rules and regs, I'm not actually sure the USPS has it within their control to white list actual mail. I'm proposing a different service -- my main point being that because of who the USPS is, they'd have an enormous natural advantage to offer that type of whitelisted new service. The fact that its a no brainer and that nobody has done it probably means it is hard, more than anything. But it seems it would be easier for someone with the reach and institutional trust of a quasi govt organization (compared to a startup). Perhaps the USPS would be more likely to do a better job in curtailing their reliance on bulk mailings if they had an exploding, high margin revenue base around ecommerce payment and being a more trusted, secure form of business communications channels. Mail spam sucks, but that is their revenue base. From their point of view, as an institution, they of course would like to see it replaced, institutions don't themselves like to generally just commit suicide. Tech is what is going to replace them, at least attempting to transition to tech while leveraging what advantages they do have isn't a terrible idea -- because there quite possibly are some things they are able to uniquely bring to the table.
patio11 15y ago
It's the usual story: capture of the USPS by its unions, such that 500k employees are getting raises simultaneously with their reports of "We're dying!!!" America in 2011 simply doesn't need to set aside half a million lifetime sinecures to deliver two pieces of mail a week which actually matter. The nation receives no value from a civil servant whose full-time job is literally to convince BoA not to go paperless. It's a cool institution. Let's remember it in a small museum somewhere.
- bodyfour 15y ago
  The full story is more complicated. The USPS is in an unattractive position of being supposedly independent of the taxpayer's money, yet any major operating issues are at the whim of Congress. Predictably, it goes like this: USPS: "Volume is down, we need to raise prices." Congress: "Nope, sorry" USPS: "Uhm, ok. We'll have to cut Saturday delivery then..." Congress: "No can do, sorry" USPS: "Well I guess we have to close a bunch of post offices at least" Every member of Congress in unison: "Sounds great, but not in my district" etc... I'm a big fan of the USPS -- I've found them to be more reliable than UPS and FedEx by far and they're amazingly inexpensive to boot. They know what they need to do to fix themselves, but sadly it seems to take a crisis before Congress will get out of the way and just let them do it.
  - PLejeck 15y ago
    Not even a crisis will convince Congress to let them do it. I mean, look at what happened with the budget.
  - tomjen3 15y ago
    They are insane if they raise prices when volume is going down. The only thing that will happen is that the volume will go even further down.
    - sliverstorm 15y ago
      Oh really? What if they raise the price of postage on First Class mail by one cent. Would you look at the stamps, scream bloody murder, and stamp (hah!) out of the Post Office? Sure, increase prices, and demand will fall, but it's not perfectly linear, and even a one cent increase boosts revenues considerably.
pwg 15y ago
This quote summarizes what is wrong with the Post Office: "They are supported by junk mailers, greeting card manufacturers, and magazine publishers whose businesses are, in some cases, subsidized by the post office's generously low mailing prices. Never mind that their benefactor loses money on some of their products, most notably magazines and some junk mail. If you are "los[ing] money on some ... products" then just maybe you need to increase the cost of delivery of those products until you are no longer losing money...
- Someone 15y ago
  Assuming they can increase cost of delivery (something that, apparently, congress is against), chances are this is what would happen: they raise prices to cover (marginal) costs, and some customers run away. A commercial company would reply by either cost-cutting, shutting down (parts of) the company, increasing productivity, or finding new revenue streams. The USPS does not have first or second options, and the third on its own only helps if it brings in extra work, which it does not (remember the 'some customers ran away' part?) It all boils down to the fact that the USPS is not operating in a free market. They have huge expenditures that they cannot get rid of. If you have an employee, but no work for him, and cannot fire him, it makes economic sense to take on work that pays less than what the employee costs. Sure, it loses you money, but it loses you less money than not taking on that work. So, that leaves the fourth stream. In e EU, that has seen post offices turned into shops, selling mail-related stuff such as postcards. That may work, but especially in smaller villages, it is easier to outsource the post office tasks to existing shops, rather than trying to compete with them in a market that cannot sustain two shops.
- nazgulnarsil 15y ago
  it is a politician's jobs to make actions that result from basic economic realities illegal when those actions conflict with the warm fuzzy picture their constituency has of the world.
pessimizer 15y ago
Do we ask the highway system to be profitable? If we eliminate the rural routes and only leave the profitable ones, we might as well get rid of the entire thing - the profitable routes could easily be privatized, but as it is, they offset the cost of the rural routes a bit. I support keeping country folk connected to the rest of the nation as a public good, not a profit center.
- Empact 15y ago
  The same subsidies which "keep the country folks connected" act to systematically encourage people to be wasteful and pollutive in their lifestyles and habits. http://bloggingheads.tv/diavlogs/37986?in=28:46&out=30:19 http://bloggingheads.tv/diavlogs/37986?in=28:46&out=30:1... If we did ask the interstate highways to pay for themselves (e.g. by raising the federal gas tax to fully cover the cost of the interstate highways), we'd go a long way towards putting various modes of transportation on even footing and enabling people to choose the optimal solution for each trip.
  - pessimizer 15y ago
    I can't think of a more easily targeted tax.
- smanek 15y ago
  I don't think cutting mail service to 2 days a week would disconnect 'country folks.' Anything time sensitive could use email, fax, or (more expensive) private delivery services. Plus, it's managed horrifically. What sort of real company would have a union contract that categorically prohibits layoffs and mandates rich pensions for basically unskilled workers?
  - ams6110 15y ago
    I live in a semi-rural area and honestly, I'd rather pick up my mail at the post office. Our carrier delivers letters to the wrong houses at least once a week. I really don't know how much of my mail I never get, I only assume that other neighbors do as I do and redeliver the mail correctly.
mikek 15y ago
Here's what I don't understand about the USPS situation. They deliver 200 billion pieces of mail per year. So if they're short 2 billion dollars, then they just need to raise the price of a stamp by 1 cent. Problem solved, no? Can somebody tell me why I'm wrong here? Would volume really fall that substantially if they raised the price of a stamp by a few cents?
- Kadin 15y ago
  Much of the mail is bulk (aka junk) mail sent by companies and organizations that have lobbyists. These lobbyists make it very difficult to raise postal rates as you suggest. Add this to the Mephistophelean bargains that they have made with their unions over the years (because they too are politically powerful) and you can start to see the predicament. They're being squeezed dry.
  - waterlesscloud 15y ago
    The abundance of bulk mail sent is a clear sign that the market could very easily sustain higher rates. Demand is there and it's strong. Raise the prices.
  - bandushrew 15y ago
    what? are you claiming that the unions would have a problem with raising the price of stamps by a cent?
    - nkassis 15y ago
      No, what he's saying is on the one side the junk mail senders are blocking rate increases with lobbying and on the other side unions are asking for high amounts of benefits and pay raises. This is what he meant by squeezed (from both sides) dry.
- mhb 15y ago
  You're wrong because you have no idea what the relationship is between price and demand. Even though you might not care if the price is raised by x, it is obvious that for essentially every x, there are people who do care and will no longer pay it.
cookiecaper 15y ago
The USPS needs to come to terms with the shift in communication mechanisms. People don't write letters as a common means of communication anymore. I believe there is some value in maintaining the Postal Service but its role will need to shift dramatically if we expect to see any sustainability from there.
- Kadin 15y ago
  I think that people in the USPS definitely realize this, but they are unfortunately prohibited from doing any of the obvious things that one would expect them to do in response. They can't close unprofitable post offices, lay off redundant employees, increase prices, or decrease the level of service being offered. All they can do is let it blow up and then hope Congress gives them enough leeway to put the pieces back together into something better and more sustainable ... hopefully using profitable semi-privatized Western European services as a model.
grandalf 15y ago
Every day I go to my mailbox and put 98% of its contents directly into the recycle bin. I have followed all the recommended steps to remove my address from various mailing lists. The USPS is a garbage-spamming environmental disaster that solicits money from companies to do direct marketing, offers no opt-out features, and every day drives tens of thousands of polluting vehicles to stuff unwanted paper into mailboxes across the country. In addition to its monopoly, the post office is one of the most unpleasant retail locations anyone could imagine -- filthy counters, grudging employees, and long lines. Since "first class" mail takes between 2-12 days, there is no reason to have first class mail delivered every day. Doing so is just a handout to the employees' unions. There may be a case to be made for more frequent delivery of expedited mail, but this would take a fraction of the number of vehicles and personell that the current system does -- and with less reliable guarantees, nearly identical prices and worse service than UPS, I always choose UPS over USPS for parcel shipment. It's fine to be nostalgic about the pony express, but the USPS needs to either be phased out or drastically scaled down, and laws forbidding other companies to deliver standard mail must be changed.
- rorrr 15y ago
  I have pretty much the opposite experience with USPS. Got almost no spam, maybe 10-20% of my mail, mostly sent by local businesses and free local newspapers. It's not a monopoly. Forgot about UPS, DHL and FedEx? Their employees are usually very hard working and have to deal with all kinds of assholes. Plus, it's much cheaper than their competitors.
  - yummyfajitas 15y ago
    The USPS holds a monopoly on non-urgent mail. http://en.wikipedia.org/wiki/United_States_Postal_Service#Universal_service_obligation_and_monopoly_status http://en.wikipedia.org/wiki/United_States_Postal_Service#Un... You are correct that non-urgent mail (what the USPS sells) is cheaper than urgent mail (what their competitors sell).
  - grandalf 15y ago
    As someone else pointed out, the USPS has a monopoly on non-urgent mail. As for spam, you must be fortunate that you have not managed to wind up on spammers' lists. If you donate to charity that's an easy way to get on the lists, and some of the spam is just unnecessary garbage sent by business I use b/c sending it to everyone (via the USPS) is cheaper than implementing an opt-out policy.
crizCraig 15y ago
Poll: Should the USPS be allowed to go out of business? http://www.wepolls.com/p/1900483/Should-the-USPS-be-allowed-to-go-out-of-business http://www.wepolls.com/p/1900483/Should-the-USPS-be-allowed-...
rokhayakebe 15y ago
I have a solution that is guaranteed to save the post office money: crowdsource the delivery of mail. How does it work? Mail is sorted and placed in bins by USPS. Individuals who work close to or drive by the post office on their way home can stop by and pick up the bin for neighborhood/apt complex/building/center. The person who picks it can either drop the mail or let others come pick it up.
- nhaehnle 15y ago
  That would be a nightmare in terms of reliability and security.
ck2 15y ago
The postal service is being forced to make a massive prepayment for decades of pensions all at once. No regular business would even think of doing that on it's own. It's congress behaving stupidly as usual. Also, it needs to stop the practice of employees purposely retiring early and then being hired back by friends as contractors. So they get both retirement benefits and then a second paycheck. If they leave, make it so they cannot be a contractor, would solve an expensive labor abuse. I mail and receive small packages weekly that would be unaffordable (and mishandled) by UPS. I'd hate to lose Saturday delivery but it would be a bearable compromise among alternatives.
- ja30278 15y ago
  While it _seems_ bad to hire someone who's already receiving a pension, what's the alternative? Hiring someone else, who's unskilled, and _still_ paying the pension? Maybe the problem is the pension itself, not the double-dipping.
  - ck2 15y ago
    The problem is the person was offered early retirement to reduce costs. If you hire someone outside the system you are reducing unemployment in a helpful way. The retired person is already doing just fine with benefits and medical coverage, give the outsider a help up.
kakashi_ 15y ago
On a lighter note: This was forewarned long time back - http://www.youtube.com/watch?v=Hox-ni8geIw http://www.youtube.com/watch?v=Hox-ni8geIw
Kyrce 15y ago
After decades of mismanagement and neglect, service broke down completely in Chicago in 1966. "The sorting floors were bursting with more than 5 million letters, parcels, circulars, and magazines that could not be processed," Lawrence O'Brien, the Postmaster General at the time, would recall somewhat poetically. "Outbound mail sacks formed still gray mountain ranges as they waited to be shipped out." And here I thought Terry Pratchett's Going Postal was fiction.
dpatru 15y ago
It's hard to feel sorry for an organization that is going bankrupt even as they maintain a government-enforced monopoly. If business is really so bad, why doesn't the Postal Service allow private businesses to compete with it? If there's no money in the business, then there's no need to fear competition. No one wants to enter a business you can't make money in.
- ajays 15y ago
  I don't even know why I'm replying to this, but this sort of reasoning makes my blood boil. A lot of clueless people throw in the "p" word (privatization, or private competition) without really thinking things through. The USPS is based on the idea of cross-subsidies. The fact that it's easy to deliver mail to, say, 100 addresses in San Francisco (a carrier can just walk a block and do it), subsidies the fact that in, say, Nebraska they would have to drive 100 miles to deliver to the same number of addresses. No private company would do this; they would just deliver in the cities, and tell the rural folks to fuck off. The private operators would just cherry-pick the profitable routers, and dump the rest. Is that what you want to see happen?
  - bdonlan 15y ago
    The solution is quite simple: Offer the private carriers the rights to carry ordinary mail, on the condition that they do the same kind of cross-subsidization. You don't necessarily need a monopoly, just regulation.
  - jlarocco 15y ago
    I have thought it through, and I still think it's a good idea. People who choose to live in the middle of nowhere should pay the full price of doing so. I'm sure private companies would have no problem delivering mail to the middle of nowhere, but the people living there will have to pay the actual, higher, cost of delivery. Why is that such a big deal?
  - ak217 15y ago
    Why should urban dwellers subsidize rural dwellers? Yes, I'd like to see a system where price of service is proportional to the delivery cost.
michaels0620 15y ago
I always thought that they should do home pick up & delivery 3 days per week but adjoining regions would have different days. So region A would get mail M,W,F and region B would get mail on T,Thurs., Sat. The mail carrier would alternate between regions A and B. It seems like you could almost halve the number of mail carriers this way.
- xsmasher 15y ago
  That assumes that the trucks/carriers in regions A and B are running almost half-empty right now. That's not likely.
amorphid 15y ago
Businesses still pay many bills with paper checks sent via mail. I wonder when we will no longer need the USPS for that.
- philwelch 15y ago
  When the banking and payment systems are fixed. In the year 2011, there is no legitimate technical reason for paper checks and the mail being a legitimate payment system. But the digital alternatives are little better.
ajays 15y ago
I'm willing to bet that if there a private company had to operate under the same stifling rules as the USPS, they would have quit a long time ago. The USPS could raise the price of delivering mail to match the costs. BUT THEY CAN'T! Even though the Government does NOT provide any funding to the USPS, the Government (specifically, the Congress) keeps thwarting the USPS' efforts to operate like a business. You want to fix the USPS? Take away the Congress's ability to interfere with it. The USPS' only mandate should be to deliver mail to every physical address. That's it. Just let them fix their rates, their benefits, etc. and I'm willing to bet they'd be just fine.
- jonknee 15y ago
  The stifling rules go both ways--USPS has a government granted and enforced monopoly on mail. It may be a shitty business, but at least you can't have competition.
  - digikata 15y ago
    "USPS has a government granted and enforced monopoly on mail." What? Does Fedex and UPS know?
    - jonknee 15y ago
      Yes, which is why no one else delivers non-urgent mail. You'll get shut down by the postal inspector.
      - deleted 15y ago
        [deleted]
      - digikata 15y ago
        No one else delivers mail to a post box. But private enterprises don't have many barriers here - they are free to convince their customers to accept delivery elsewhere, or put up a private delivery box - many newspapers do it this way. Companies have already picked off the most profitable areas of mail delivery, overnight mail and packages manage to deliver to your doorstop. The USPS is stuck with mandated delivery scope which was taken on by our founding fathers. That mandate could be debated, but making this a private vs public efficiency polemic seems a little strained.
jeffjarvis 15y ago
How about organizing a summit to disrupt the USPS? I got involved in the question of the future of postal, oddly, because of my book, What Would Google Do? [sorry for the plug], when postal execs asked what the USPS would be if Google ran it. Hmmm. You guys could help answer that. A consultant in the industry organized an event in DC, PostalVision 2020, and we had Vint Cerf come keynote. I'd like the next phase to focus on how to disrupt postal entirely. First class will die and with it its subsidy for media and other mail. Parcels will take off but the private sector can handle that. (If we need to guarantee universal service, that can be done with subsidies -- a la, phones -- better than by owning the infrastructure). There are entrepreneurial ventures such as Manilla aiming to disrupt physical bill delivery..... It's an area ripe for innovation and investment. A few of my earlier posts: http://www.buzzmachine.com/2011/05/18/why-do-we-need-a-postal-service/ http://www.buzzmachine.com/2011/05/18/why-do-we-need-a-posta... http://www.buzzmachine.com/2010/03/23/post-postal/ http://www.buzzmachine.com/2010/03/23/post-postal/
known 15y ago
Convert USPS into a Bank
drallison 15y ago
Why should the postal monopoly exempt "urgent package delivery" (aka FedEx and UPS)? If we want an economically healthy postal service, ceding that profitable segment of the postal business to private industry was a strategic error. I personally believe that a healthy postal service is critically important.
drallison 15y ago
Do your part to save the post office. Write a letter.

126 points by jedwhite 15y ago

A link for the full article, if you don't want to hit "next page" seven times: http://www.businessweek.com/print/magazine/content/11_23/b4231060885070.htm http://www.businessweek.com/print/magazine/content/11_23/b42...

latch 15y ago

I found myself surprised to agree with the USPS position that online-services are a bad idea (for the USPS). I mean generating a postcard from your mobile picture just seems like something that a tech-company will do a better job at. I can only imagine how much money the USPS would spend on some of these applications, only to have a startup with $250K funding (or, you know, Facebook) steamroll them.

justincormack 15y ago
Yes I dont think thats whats making money in Europe. Deutsche Post is making money from owning DHL I think. Not that USPS buying fedex is likely. Closing post offices has reduced costs, delaying the issues. Here in the uk we are in a similar position to the US. There is a shift to banks and utilities sending by email, and junk is shifting to phone as it is more effective. However merging and being profitable has probably helped some of these outside the uk be less government minded and more commercial.
enko 15y ago
>> generating a postcard from your mobile picture just seems like something that a tech-company will do a better job at I think the point was that the overseas mail services have become tech companies.
nikcub 15y ago
I agree with that - but they should at least build an API that would let other applications send digitally-generated mail, or to order stamps, get parcel information, tracking details etc.
rmrm 15y ago
I think USPS would have been in a great position to be an online identity depository and payment platform for consumer to business dealings. They should have done it 10 years ago. Imagine an email like system where you and the companies you do business with can communicate, and you can pay them. Some sort of whitelisted communications channels, whereby when you enter in a service contract with a company, you also add them to this comm channel. No spam. Just valid communications and invoices. Verified identities and verified payments. The USPS is in a great position for that sort of thing, being they actually come to your house every day. They already know who you are, and where you are. They have a pre-existing business relationship with every entity in the US. Whereas now I have to tell my parents and grandparents to basically not believe anything they see in their email inbox -- it would be nice if a more secure channel existed. $250K startup -- get on it!
- philwelch 15y ago
  The USPS has a shitty track record for not spamming people. Maybe half of my mail is spam. While the USPS might have been in a position to do as you suggest for quite some time, the fact that they haven't indicates something, doesn't it?
  - rmrm 15y ago
    The USPS (or Fedex or UPS or DHL or anyone else) were not conceived to be whitelisted services - they just deliver stuff. USPS does it cheaply, so bulk mailers use them. I don't know the rules and regs, I'm not actually sure the USPS has it within their control to white list actual mail. I'm proposing a different service -- my main point being that because of who the USPS is, they'd have an enormous natural advantage to offer that type of whitelisted new service. The fact that its a no brainer and that nobody has done it probably means it is hard, more than anything. But it seems it would be easier for someone with the reach and institutional trust of a quasi govt organization (compared to a startup). Perhaps the USPS would be more likely to do a better job in curtailing their reliance on bulk mailings if they had an exploding, high margin revenue base around ecommerce payment and being a more trusted, secure form of business communications channels. Mail spam sucks, but that is their revenue base. From their point of view, as an institution, they of course would like to see it replaced, institutions don't themselves like to generally just commit suicide. Tech is what is going to replace them, at least attempting to transition to tech while leveraging what advantages they do have isn't a terrible idea -- because there quite possibly are some things they are able to uniquely bring to the table.

patio11 15y ago

It's the usual story: capture of the USPS by its unions, such that 500k employees are getting raises simultaneously with their reports of "We're dying!!!" America in 2011 simply doesn't need to set aside half a million lifetime sinecures to deliver two pieces of mail a week which actually matter. The nation receives no value from a civil servant whose full-time job is literally to convince BoA not to go paperless. It's a cool institution. Let's remember it in a small museum somewhere.

bodyfour 15y ago
The full story is more complicated. The USPS is in an unattractive position of being supposedly independent of the taxpayer's money, yet any major operating issues are at the whim of Congress. Predictably, it goes like this: USPS: "Volume is down, we need to raise prices." Congress: "Nope, sorry" USPS: "Uhm, ok. We'll have to cut Saturday delivery then..." Congress: "No can do, sorry" USPS: "Well I guess we have to close a bunch of post offices at least" Every member of Congress in unison: "Sounds great, but not in my district" etc... I'm a big fan of the USPS -- I've found them to be more reliable than UPS and FedEx by far and they're amazingly inexpensive to boot. They know what they need to do to fix themselves, but sadly it seems to take a crisis before Congress will get out of the way and just let them do it.
- PLejeck 15y ago
  Not even a crisis will convince Congress to let them do it. I mean, look at what happened with the budget.
- tomjen3 15y ago
  They are insane if they raise prices when volume is going down. The only thing that will happen is that the volume will go even further down.
  - sliverstorm 15y ago
    Oh really? What if they raise the price of postage on First Class mail by one cent. Would you look at the stamps, scream bloody murder, and stamp (hah!) out of the Post Office? Sure, increase prices, and demand will fall, but it's not perfectly linear, and even a one cent increase boosts revenues considerably.

pwg 15y ago

This quote summarizes what is wrong with the Post Office: "They are supported by junk mailers, greeting card manufacturers, and magazine publishers whose businesses are, in some cases, subsidized by the post office's generously low mailing prices. Never mind that their benefactor loses money on some of their products, most notably magazines and some junk mail. If you are "los[ing] money on some ... products" then just maybe you need to increase the cost of delivery of those products until you are no longer losing money...

Someone 15y ago
Assuming they can increase cost of delivery (something that, apparently, congress is against), chances are this is what would happen: they raise prices to cover (marginal) costs, and some customers run away. A commercial company would reply by either cost-cutting, shutting down (parts of) the company, increasing productivity, or finding new revenue streams. The USPS does not have first or second options, and the third on its own only helps if it brings in extra work, which it does not (remember the 'some customers ran away' part?) It all boils down to the fact that the USPS is not operating in a free market. They have huge expenditures that they cannot get rid of. If you have an employee, but no work for him, and cannot fire him, it makes economic sense to take on work that pays less than what the employee costs. Sure, it loses you money, but it loses you less money than not taking on that work. So, that leaves the fourth stream. In e EU, that has seen post offices turned into shops, selling mail-related stuff such as postcards. That may work, but especially in smaller villages, it is easier to outsource the post office tasks to existing shops, rather than trying to compete with them in a market that cannot sustain two shops.
nazgulnarsil 15y ago
it is a politician's jobs to make actions that result from basic economic realities illegal when those actions conflict with the warm fuzzy picture their constituency has of the world.

pessimizer 15y ago

Do we ask the highway system to be profitable? If we eliminate the rural routes and only leave the profitable ones, we might as well get rid of the entire thing - the profitable routes could easily be privatized, but as it is, they offset the cost of the rural routes a bit. I support keeping country folk connected to the rest of the nation as a public good, not a profit center.

Empact 15y ago
The same subsidies which "keep the country folks connected" act to systematically encourage people to be wasteful and pollutive in their lifestyles and habits. http://bloggingheads.tv/diavlogs/37986?in=28:46&out=30:19 http://bloggingheads.tv/diavlogs/37986?in=28:46&out=30:1... If we did ask the interstate highways to pay for themselves (e.g. by raising the federal gas tax to fully cover the cost of the interstate highways), we'd go a long way towards putting various modes of transportation on even footing and enabling people to choose the optimal solution for each trip.
- pessimizer 15y ago
  I can't think of a more easily targeted tax.
smanek 15y ago
I don't think cutting mail service to 2 days a week would disconnect 'country folks.' Anything time sensitive could use email, fax, or (more expensive) private delivery services. Plus, it's managed horrifically. What sort of real company would have a union contract that categorically prohibits layoffs and mandates rich pensions for basically unskilled workers?
- ams6110 15y ago
  I live in a semi-rural area and honestly, I'd rather pick up my mail at the post office. Our carrier delivers letters to the wrong houses at least once a week. I really don't know how much of my mail I never get, I only assume that other neighbors do as I do and redeliver the mail correctly.

mikek 15y ago

Here's what I don't understand about the USPS situation. They deliver 200 billion pieces of mail per year. So if they're short 2 billion dollars, then they just need to raise the price of a stamp by 1 cent. Problem solved, no? Can somebody tell me why I'm wrong here? Would volume really fall that substantially if they raised the price of a stamp by a few cents?

Kadin 15y ago
Much of the mail is bulk (aka junk) mail sent by companies and organizations that have lobbyists. These lobbyists make it very difficult to raise postal rates as you suggest. Add this to the Mephistophelean bargains that they have made with their unions over the years (because they too are politically powerful) and you can start to see the predicament. They're being squeezed dry.
- waterlesscloud 15y ago
  The abundance of bulk mail sent is a clear sign that the market could very easily sustain higher rates. Demand is there and it's strong. Raise the prices.
- bandushrew 15y ago
  what? are you claiming that the unions would have a problem with raising the price of stamps by a cent?
  - nkassis 15y ago
    No, what he's saying is on the one side the junk mail senders are blocking rate increases with lobbying and on the other side unions are asking for high amounts of benefits and pay raises. This is what he meant by squeezed (from both sides) dry.
mhb 15y ago
You're wrong because you have no idea what the relationship is between price and demand. Even though you might not care if the price is raised by x, it is obvious that for essentially every x, there are people who do care and will no longer pay it.

cookiecaper 15y ago

The USPS needs to come to terms with the shift in communication mechanisms. People don't write letters as a common means of communication anymore. I believe there is some value in maintaining the Postal Service but its role will need to shift dramatically if we expect to see any sustainability from there.

Kadin 15y ago
I think that people in the USPS definitely realize this, but they are unfortunately prohibited from doing any of the obvious things that one would expect them to do in response. They can't close unprofitable post offices, lay off redundant employees, increase prices, or decrease the level of service being offered. All they can do is let it blow up and then hope Congress gives them enough leeway to put the pieces back together into something better and more sustainable ... hopefully using profitable semi-privatized Western European services as a model.

grandalf 15y ago

Every day I go to my mailbox and put 98% of its contents directly into the recycle bin. I have followed all the recommended steps to remove my address from various mailing lists. The USPS is a garbage-spamming environmental disaster that solicits money from companies to do direct marketing, offers no opt-out features, and every day drives tens of thousands of polluting vehicles to stuff unwanted paper into mailboxes across the country. In addition to its monopoly, the post office is one of the most unpleasant retail locations anyone could imagine -- filthy counters, grudging employees, and long lines. Since "first class" mail takes between 2-12 days, there is no reason to have first class mail delivered every day. Doing so is just a handout to the employees' unions. There may be a case to be made for more frequent delivery of expedited mail, but this would take a fraction of the number of vehicles and personell that the current system does -- and with less reliable guarantees, nearly identical prices and worse service than UPS, I always choose UPS over USPS for parcel shipment. It's fine to be nostalgic about the pony express, but the USPS needs to either be phased out or drastically scaled down, and laws forbidding other companies to deliver standard mail must be changed.

rorrr 15y ago
I have pretty much the opposite experience with USPS. Got almost no spam, maybe 10-20% of my mail, mostly sent by local businesses and free local newspapers. It's not a monopoly. Forgot about UPS, DHL and FedEx? Their employees are usually very hard working and have to deal with all kinds of assholes. Plus, it's much cheaper than their competitors.
- yummyfajitas 15y ago
  The USPS holds a monopoly on non-urgent mail. http://en.wikipedia.org/wiki/United_States_Postal_Service#Universal_service_obligation_and_monopoly_status http://en.wikipedia.org/wiki/United_States_Postal_Service#Un... You are correct that non-urgent mail (what the USPS sells) is cheaper than urgent mail (what their competitors sell).
- grandalf 15y ago
  As someone else pointed out, the USPS has a monopoly on non-urgent mail. As for spam, you must be fortunate that you have not managed to wind up on spammers' lists. If you donate to charity that's an easy way to get on the lists, and some of the spam is just unnecessary garbage sent by business I use b/c sending it to everyone (via the USPS) is cheaper than implementing an opt-out policy.

crizCraig 15y ago

Poll: Should the USPS be allowed to go out of business? http://www.wepolls.com/p/1900483/Should-the-USPS-be-allowed-to-go-out-of-business http://www.wepolls.com/p/1900483/Should-the-USPS-be-allowed-...

rokhayakebe 15y ago

I have a solution that is guaranteed to save the post office money: crowdsource the delivery of mail. How does it work? Mail is sorted and placed in bins by USPS. Individuals who work close to or drive by the post office on their way home can stop by and pick up the bin for neighborhood/apt complex/building/center. The person who picks it can either drop the mail or let others come pick it up.

nhaehnle 15y ago
That would be a nightmare in terms of reliability and security.

ck2 15y ago

The postal service is being forced to make a massive prepayment for decades of pensions all at once. No regular business would even think of doing that on it's own. It's congress behaving stupidly as usual. Also, it needs to stop the practice of employees purposely retiring early and then being hired back by friends as contractors. So they get both retirement benefits and then a second paycheck. If they leave, make it so they cannot be a contractor, would solve an expensive labor abuse. I mail and receive small packages weekly that would be unaffordable (and mishandled) by UPS. I'd hate to lose Saturday delivery but it would be a bearable compromise among alternatives.

ja30278 15y ago
While it _seems_ bad to hire someone who's already receiving a pension, what's the alternative? Hiring someone else, who's unskilled, and _still_ paying the pension? Maybe the problem is the pension itself, not the double-dipping.
- ck2 15y ago
  The problem is the person was offered early retirement to reduce costs. If you hire someone outside the system you are reducing unemployment in a helpful way. The retired person is already doing just fine with benefits and medical coverage, give the outsider a help up.

kakashi_ 15y ago

On a lighter note: This was forewarned long time back - http://www.youtube.com/watch?v=Hox-ni8geIw http://www.youtube.com/watch?v=Hox-ni8geIw

Kyrce 15y ago

After decades of mismanagement and neglect, service broke down completely in Chicago in 1966. "The sorting floors were bursting with more than 5 million letters, parcels, circulars, and magazines that could not be processed," Lawrence O'Brien, the Postmaster General at the time, would recall somewhat poetically. "Outbound mail sacks formed still gray mountain ranges as they waited to be shipped out." And here I thought Terry Pratchett's Going Postal was fiction.

dpatru 15y ago

It's hard to feel sorry for an organization that is going bankrupt even as they maintain a government-enforced monopoly. If business is really so bad, why doesn't the Postal Service allow private businesses to compete with it? If there's no money in the business, then there's no need to fear competition. No one wants to enter a business you can't make money in.

ajays 15y ago
I don't even know why I'm replying to this, but this sort of reasoning makes my blood boil. A lot of clueless people throw in the "p" word (privatization, or private competition) without really thinking things through. The USPS is based on the idea of cross-subsidies. The fact that it's easy to deliver mail to, say, 100 addresses in San Francisco (a carrier can just walk a block and do it), subsidies the fact that in, say, Nebraska they would have to drive 100 miles to deliver to the same number of addresses. No private company would do this; they would just deliver in the cities, and tell the rural folks to fuck off. The private operators would just cherry-pick the profitable routers, and dump the rest. Is that what you want to see happen?
- bdonlan 15y ago
  The solution is quite simple: Offer the private carriers the rights to carry ordinary mail, on the condition that they do the same kind of cross-subsidization. You don't necessarily need a monopoly, just regulation.
- jlarocco 15y ago
  I have thought it through, and I still think it's a good idea. People who choose to live in the middle of nowhere should pay the full price of doing so. I'm sure private companies would have no problem delivering mail to the middle of nowhere, but the people living there will have to pay the actual, higher, cost of delivery. Why is that such a big deal?
- ak217 15y ago
  Why should urban dwellers subsidize rural dwellers? Yes, I'd like to see a system where price of service is proportional to the delivery cost.

michaels0620 15y ago

I always thought that they should do home pick up & delivery 3 days per week but adjoining regions would have different days. So region A would get mail M,W,F and region B would get mail on T,Thurs., Sat. The mail carrier would alternate between regions A and B. It seems like you could almost halve the number of mail carriers this way.

xsmasher 15y ago
That assumes that the trucks/carriers in regions A and B are running almost half-empty right now. That's not likely.

amorphid 15y ago

Businesses still pay many bills with paper checks sent via mail. I wonder when we will no longer need the USPS for that.

philwelch 15y ago
When the banking and payment systems are fixed. In the year 2011, there is no legitimate technical reason for paper checks and the mail being a legitimate payment system. But the digital alternatives are little better.

ajays 15y ago

I'm willing to bet that if there a private company had to operate under the same stifling rules as the USPS, they would have quit a long time ago. The USPS could raise the price of delivering mail to match the costs. BUT THEY CAN'T! Even though the Government does NOT provide any funding to the USPS, the Government (specifically, the Congress) keeps thwarting the USPS' efforts to operate like a business. You want to fix the USPS? Take away the Congress's ability to interfere with it. The USPS' only mandate should be to deliver mail to every physical address. That's it. Just let them fix their rates, their benefits, etc. and I'm willing to bet they'd be just fine.

jonknee 15y ago
The stifling rules go both ways--USPS has a government granted and enforced monopoly on mail. It may be a shitty business, but at least you can't have competition.
- digikata 15y ago
  "USPS has a government granted and enforced monopoly on mail." What? Does Fedex and UPS know?
  - jonknee 15y ago
    Yes, which is why no one else delivers non-urgent mail. You'll get shut down by the postal inspector.
    - deleted 15y ago
      [deleted]
    - digikata 15y ago
      No one else delivers mail to a post box. But private enterprises don't have many barriers here - they are free to convince their customers to accept delivery elsewhere, or put up a private delivery box - many newspapers do it this way. Companies have already picked off the most profitable areas of mail delivery, overnight mail and packages manage to deliver to your doorstop. The USPS is stuck with mandated delivery scope which was taken on by our founding fathers. That mandate could be debated, but making this a private vs public efficiency polemic seems a little strained.

jeffjarvis 15y ago

How about organizing a summit to disrupt the USPS? I got involved in the question of the future of postal, oddly, because of my book, What Would Google Do? [sorry for the plug], when postal execs asked what the USPS would be if Google ran it. Hmmm. You guys could help answer that. A consultant in the industry organized an event in DC, PostalVision 2020, and we had Vint Cerf come keynote. I'd like the next phase to focus on how to disrupt postal entirely. First class will die and with it its subsidy for media and other mail. Parcels will take off but the private sector can handle that. (If we need to guarantee universal service, that can be done with subsidies -- a la, phones -- better than by owning the infrastructure). There are entrepreneurial ventures such as Manilla aiming to disrupt physical bill delivery..... It's an area ripe for innovation and investment. A few of my earlier posts: http://www.buzzmachine.com/2011/05/18/why-do-we-need-a-postal-service/ http://www.buzzmachine.com/2011/05/18/why-do-we-need-a-posta... http://www.buzzmachine.com/2010/03/23/post-postal/ http://www.buzzmachine.com/2010/03/23/post-postal/

known 15y ago

Convert USPS into a Bank

drallison 15y ago

Why should the postal monopoly exempt "urgent package delivery" (aka FedEx and UPS)? If we want an economically healthy postal service, ceding that profitable segment of the postal business to private industry was a strategic error. I personally believe that a healthy postal service is critically important.

drallison 15y ago

Do your part to save the post office. Write a letter.