U.S. Postal Service on the Verge of Collapse

[WhoWee]

WOW your sure jumped all over that like white on rice. I was actually thinking more along the line of something else entirely. The Postal Service delivers mail everywhere from the bottom of the Grand Canyon to the wilds of Alaska where they use snowmobiles.

Are those Fedex trucks going to work out?? Fedex does want to get some of the junk mail in high density areas but there is no way they would touch any area where they can not make a profit even though the Postal Service is required to deliver in those areas.

Advertising junk is a part of life whether in the mail or in a television commercial.

On the other hand, does junk really need to be delivered on a daily basis and separately (versus a weekly/bi-weekly or monthly junk bundle)?

 

[edward]

On the other hand, does junk really need to be delivered on a daily basis and separately (versus a weekly/bi-weekly or monthly junk bundle)?

Good point, although I would imagine that the originators of the junk mail would want some kind of timely delivery.

 

[Pengwuino]

The junk mail rates already subsidize first class mail. Indeed, UPS and FedEx have tried to get into the junk mail business, only to be told that it's a federal crime for anyone other than the USPS to do it. The problem is that if these rates are raised substantially, advertisers will go elsewhere. You're already seeing it - "opt into Megacorp's email list, and we'll give you a coupon every week".

I don't understand how junk mail works in the slightest. What is considered "junk-mail" and if it's the cheapest type of mail, how can it really subsidize anything? I would expect the opposite to happen, the more expensive mails subsidizing cheaper ones.

I'm trying to think of what kind of junk mail is actually half decent... but I'm having problems with that.

 

[Vanadium 50]

I don't understand how junk mail works in the slightest. What is considered "junk-mail" and if it's the cheapest type of mail, how can it really subsidize anything? I would expect the opposite to happen, the more expensive mails subsidizing cheaper ones.

The price doesn't matter. What matters is the difference between what you charge and what it costs. Junk mail has a low price, but an even lower cost. It comes directly to the local Post Office, and doesn't have to be sorted: just delivered, one per house. (This is why they don't allow opt-out of junk mail) It goes straight on the truck, which was making the route anyway. So the incremental cost is close to zero - it's pure profit.

 

[Pengwuino]

The price doesn't matter. What matters is the difference between what you charge and what it costs. Junk mail has a low price, but an even lower cost. It comes directly to the local Post Office, and doesn't have to be sorted: just delivered, one per house. (This is why they don't allow opt-out of junk mail) It goes straight on the truck, which was making the route anyway. So the incremental cost is close to zero - it's pure profit.

Thanks! Like any good forum member, I realized I should just wiki it after I had already made the post.

So what about mailings from credit card companies? They seem to always have my name/address on it but I assume those can be given to USPS in one massive distribution, but it seems like that would still need to be sorted by address on the delivery end.

 

[Vanadium 50]

On the other hand, does junk really need to be delivered on a daily basis and separately (versus a weekly/bi-weekly or monthly junk bundle)?

Let me say this again. This will not help. Under the present UPWA contract, the Post Office cannot cut staff, except by attrition. Finding less and less for the USPS to do won't save any money, because you still need to pay the staff.

This can't be solved on the expenses side - it has to be attacked from the revenue side. Perhaps an individual mandate, where each citizen is legally obligated to send a certain amount of mail?

 

[Pengwuino]

Let me say this again. This will not help. Under the present UPWA contract, the Post Office cannot cut staff, except by attrition. Finding less and less for the USPS to do won't save any money, because you still need to pay the staff.

This can't be solved on the expenses side - it has to be attacked from the revenue side. Perhaps an individual mandate, where each citizen is legally obligated to send a certain amount of mail?

take that internet!

How in the world did the USPS get into such a horrid contract?

 

[mheslep]

If the USPS is overstaffed, and the staff can not be cut under current contract, might it be possible to assign postal employees to other tasks, outside of normal mail handling, where labor is short and they could be useful in reducing net government expenses?

 

[turbo]

How in the world did the USPS get into such a horrid contract?

The contract negotiated last April contains no raises for the next two years, and establishes a two-tiered pay system that would pay new hires less than current employees. That's not so horrid. USPS is in a bind partly because of a $5.5 B requirement to pre-fund the retirement fund. Congress can change this if they wish.

 

[Vanadium 50]

So what about mailings from credit card companies? They seemto always have my name/address on it but I assume those can be given to USPS in one massive distribution, but it seems like that would still need to be sorted by address on the delivery end.

It's been a while since I had anything to do with bulk mail, but this is most likely presorted first class. Essentially, you get a 5 cent discount if you meet certain minimum volume requirements, put a machine-readable bar code on the address, and give it to the post-office sorted by Zip Code.

If this saves the post office a dime, and they refund a nickle, they have made an extra five cents profit on this.

The problem is that this is not infinitely elastic - if they raise the margin too much, outfits will crop up that will presort the mail for you. They actually do to some degree already, but they are fairly specialized.

How in the world did the USPS get into such a horrid contract?

"Horrid" depends on your point of view. It's a good contract if you are a postal worker.

It's also not clear who has any incentive to oppose union demands. In the private sector, management often owns stock, so if they reduce labor costs and increase profits, they get a fraction of the savings. USPS management are political appointees, and enraging 500,000 voters (the size of the USPS staff) is a bad idea for any political appointee. Finally, if they aren't solvent, the only consequence is that they have to go to Congress and explain that they really, really, really need the money.

As Turbo points out, the problem can be solved by diverting the money that goes into funding the pension program into operations. Of course, when the money in that fund runs out, the USPS will have to go to Congress and say, "But we promised these people a pension...it wouldn't be fair not to pay it. We really, really, really need you to gives us the money to pay them." But it wouldn't be happening under this administration.

If the USPS is overstaffed, and the staff can not be cut under current contract, might it be possible to assign postal employees to other tasks, outside of normal mail handling, where labor is short and they could be useful in reducing net government expenses?

It would depend on the nature of the work and on what the union contract permits. I suspect that the contract is fairly restrictive on this, but don't know for sure.

 

[redsunrise]

What's this?

http://finance.yahoo.com/blogs/daily-ticker/now-u-postal-belly-153600714.html

They have 650,000 people on the payroll (1 person serving every 461 Americans). One would think at least a few of those 650k have the training and smarts to figure out how to restructure the post office so that it's in the black like the other delivery services out there.

This is a perfect example why all forms of collectivism, from various flavors of socialism to state owned and operated enterprises, eventually must either collapse or turn into parasites on the body public: that people are in name public servants does not make them so, they still have self-interest strongly overriding public interest. If they distribute the costs of their benefits over the rest of society and concentrate the gains on themselves, they will do so.

In Poland, the govt post office is under pressure from commercial operators, so the post office lobbied out the law in government that a letter is a mailing that weighs more than 100 grams or so.

OK, so the commercial operators started adding a small metal plate to the letter and then argued that according to definition that's not a letter since it weighs more than it is written in the law.

Then the post office took the commercial operators to court saying that while the law itself is not good, it must be obeyed. And so on.

 

[Gokul43201]

This is a perfect example why all forms of collectivism, from various flavors of socialism to state owned and operated enterprises, eventually must either collapse or turn into parasites on the body public...

So that is to say that the military and police service and fire departments must also either collapse or turn into parasites?

 

[turbo]

So that is to say that the military and police service and fire departments must also either collapse or turn into parasites?

Well, yes! They are all socialist enterprises. If one pays any attention to the right-wing alarmists and gives them any credibility, it might lead to a perception that the US is sliding into communism.

 

[WhoWee]

Well, yes! They are all socialist enterprises. If one pays any attention to the right-wing alarmists and gives them any credibility, it might lead to a perception that the US is sliding into communism.

All drama aside, as long as the military, police, and fire departments don't all join the same union - I don't think it will be a problem.

 

[turbo]

All drama aside, as long as the military, police, and fire departments don't all join the same union - I don't think it will be a problem.

What has any of this conversation got to do with unionism, and public service? I expect you to provide the same supporting links that you demand of everybody to the left of of Glenn Beck.

Why shouldn't public servants be allowed to bargain collectively? Is there a real danger that is not spawned by right-wing fear-mongering?

 

[WhoWee]

What has any of this conversation got to do with unionism, and public service? I expect you to provide the same supporting links that you demand of everybody to the left of of Glenn Beck.

Why shouldn't public servants be allowed to bargain collectively? Is there a real danger that is not spawned by right-wing fear-mongering?

Did you read my post - or the majority of posts in this thread that cite one of the problems with the USPS is the union agreement? I'll re-post my comment - with bold emphasis on the central point.

All drama aside, as long as the military, police, and fire departments don't all join the same union - I don't think it will be a problem.

Is it "right-wing fear-mongering" to say unionizing the military would be a problem?

What does Glen Beck have to do with this discussion and what exactly do I need to support?

 

[turbo]

Did you read my post - or the majority of posts in this thread that cite one of the problems with the USPS is the union agreement? I'll re-post my comment - with bold emphasis on the central point.

All drama aside, as long as the military, police, and fire departments don't all join the same union - I don't think it will be a problem.

Is it "right-wing fear-mongering" to say unionizing the military would be a problem?

What does Glen Beck have to do with this discussion and what exactly do I need to support?

You need support because the postal workers have agreed to a 2-year wage freeze, and a 2-tiered wage program in which new hires are paid less than current employees. If you want to continue to blame the postal workers for the faults of the USPS, you ought to provide some real facts regarding why the postal union is causing all the problems, instead of the decisions of the governors and the congressional mandate that requires a $5.5B yearly payment to fund the USPS pension fund. There are facts and studies available. Slogans and talking points don't cut it.

 

[Vanadium 50]

Turbo, I am a little curious - in previous posts, you seem to indicate that pensions are a good thing, but here you are suggesting funding them is a bad thing. How do you have one without the other?

 

[turbo]

Turbo, I am a little curious - in previous posts, you seem to indicate that pensions are a good thing, but here you are suggesting funding them is a bad thing. How do you have one without the other?

When an employer (public or private) promises benefits to prospective workers, they should be required to provide those benefits.

 

[Vanadium 50]

When an employer (public or private) promises benefits to prospective workers, they should be required to provide those benefits.

And how do you propose the USPS does this if they redirect the $5B or so that they would be putting into funding those benefits into operations?

 

[WhoWee]

You need support because the postal workers have agreed to a 2-year wage freeze, and a 2-tiered wage program in which new hires are paid less than current employees. If you want to continue to blame the postal workers for the faults of the USPS, you ought to provide some real facts regarding why the postal union is causing all the problems, instead of the decisions of the governors and the congressional mandate that requires a $5.5B yearly payment to fund the USPS pension fund. There are facts and studies available. Slogans and talking points don't cut it.

Turbo, why would they " have agreed to a 2-year wage freeze, and a 2-tiered wage program in which new hires are paid less than current employees" - unless the wages and benefits of the workers were acknowledged as a problem?

 

[mheslep]

It would depend on the nature of the work and on what the union contract permits. I suspect that the contract is fairly restrictive on this, but don't know for sure.

Yes I suspect you are right, but it would be nice if, say, one percent of the 500,000 could be placed on the southern border or perform other useful activity.

Another item comes to mind. I read that the USPS has the largest vehicle fleet in the world. Yes, simply idling them a couple days of week in reduced service would do little compared to salaries and pensions. But what about selling off part of that fleet?

 

[WhoWee]

Yes I suspect you are right, but it would be nice if, say, one percent of the 500,000 could be placed on the southern border or perform other useful activity.

Another item comes to mind. I read that the USPS has the largest vehicle fleet in the world. Yes, simply idling them a couple days of week in reduced service would do little compared to salaries and pensions. But what about selling off part of that fleet?

Would selling the fleet be a green enough initiative?

http://about.usps.com/news/national-releases/2011/pr11_098.htm

http://articles.latimes.com/2010/feb/16/business/la-fi-electric-vehicle16-2010feb16

 

[DoggerDan]

This is a perfect example why all forms of collectivism, from various flavors of socialism to state owned and operated enterprises, eventually must either collapse or turn into parasites on the body public: that people are in name public servants does not make them so, they still have self-interest strongly overriding public interest. If they distribute the costs of their benefits over the rest of society and concentrate the gains on themselves, they will do so.

Good points. I think this is one reason why competition is good. It's a sanity check against the "that's the way we've always done it" mentality which impedes progress. I recall writing my uncle who was living in Africa at the time using airmail paper and envelopes. They weighted less than half that of regular mail. I kept thinking, "Why don't they use this for all mail?" I later thought, "Why don't letters come with self-sticky around the edges so that when you tri-fold it, it becomes it's own envelope?" I suppose stiffer letters jam less in reading and sorting machines.

Along comes e-mail, then various forms of social networking sites. I used to drop about three letters in the mail a week. Now I'm lucky if I drop one in the mail every six months. So, with e-mail and online communication, why do we need the USPS at all? Shipping boxed items, like a new shirt? Perhaps, but UPS does a fair job of that, and if you want speed, FedEx flies into the picture.

Then the post office took the commercial operators to court saying that while the law itself is not good, it must be obeyed. And so on.

"That's the way we've always done it." It's not good, but it must be protected. For some reason. Just to protect some people's jobs? That's not a reason. If the USPS doesn't want to can them, then they should figure out a way do business the way their customers want. Job's legacy is that he brought innovative products to the market that people could actually use. He didn't try to force a kludge. The Mac Cube is a wonderful machine, but people wanted portability, and when he realized they wanted more portability than a laptop i.e. shirt-pocket portability, he brought it to them via their cell phones.

The USPS's modus operandi rests mainly on shippling letters and packages. Yet they cut the workforce that handles the letters and packages. I'm not saying they shouldn't cut workers. I'm saying they spend 3 minutes per person in line to ship a box after the person has been waiting in line for 20 minutes. Meanwhile, I shipped a return via UPS the other day. The online store from which I purchased it has a link that allows me to log in, return an item, check the reason, and the next page is a completely prepared shipping label that took me less than 1 minute to slap on the box. It took me a second minute to drop it off at a drop box near where I live.

Two minutes! Compare that to the USPS's 23 minutes. Not only that, but it was entirely automated - no handlers to weigh and process the package. That's innovation, and the USPS isn't quite there. That's why they're failing.

I admit some centers have a similar do-it-yourself operation, but I've used it, and that's a kludge, too, not to mention the face that I would have to travel to one of their centers, which aren't numerous. Meanwhile, there are three UPS drop shipment locations within a mile of where I live.

How cool is that? Is it any wonder so many businesses ship via UPS or FedEx instead of the U.S. Mail?