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You've probably heard that the USPS is planning on dropping Saturday delivery later this year. I think a FW discussion of the USPS's financial (not to mention political) position and potential solutions would be interesting. Here are a couple good articles to kick things off:

Felix Salmon
Felix Salmon said: The fight between the Post Office and Congress is a very peculiar one. Normally, when the government owns some incredibly profligate business, it’s Congress which tries to impose efficiency gains and fiscal discipline, while the business insists that all of its spending is absolutely necessary and that it has already cut to the bone. In this case, however, the roles are reversed: the Post Office wants to change, and it’s Congress which is stopping it from doing so.

Esquire
Esquire said: No matter where it's headed in the U.S., first-class mail is all priced the same: forty-five cents. Germany has a modern and efficient post office that covers a territory about the size of Georgia and Florida, but it will cost you 60 percent more to send a letter. Mail a wedding invitation from Tokyo to its suburbs and it will cost you more than twice as much as sending the same item from Seattle to Boston. Yet the 2006 law prevents the postal service from raising prices for first-class or standard mail by more than the Consumer Price Index, regardless of fuel prices, regardless of what the mail actually costs to deliver.

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It will never go down to zero. The government will always keep it around to send us things like jury duty notices, and b... (more)

tomjef (May. 13, 2013 @ 11:18p) |

Okay - then let them raise prices

I am not saying they can raise it 300% and still get the same demand. I'm just saying ... (more)

ankitgu (May. 13, 2013 @ 11:23p) |

Except that (at least for Netflix) the net gain was for the post office since most of their shipments were local -- ther... (more)

RedWolfe01 (May. 14, 2013 @ 4:02a) |

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I see no problem with charging at least $1 to mail something, you cant buy a bottle of water for that.

One potential solution that I like would be to deliver mail to businesses five days a week, to residences three days (Mon, Wed, Fri or Tues, Thurs, Sat, depending on the route), and deliver packages and premium services (Priority and up) every day. It would hurt Netflix's DVD business but package delivery every day would be a real value-added, especially considering that packages are the one area where the USPS is growing.

The Esquire article talks about innovations that will help the Post Office stay relevant which is great for the future, but they need to make at least a few changes now to stay solvent.

anyone interested in opening a private post office system to compete with usps? if the answer is no, that should tell you what you need to know about the usps business model

Maybe some employee quality metrics would help. Before we bring on the Newman references, let me just say that I see UPS guys busting their butts all the time, and I regularly see USPS carriers napping in their cars.

The Esquire article is good. Thanks for posting that. I think everything could easily be saved; get those pension and health care costs down to parity with at least federal levels, if not private, cut some really rural routes with little volume, take on some innovations like renting out the sides of postal trucks for ads or allowing google etc to use them for mapping. It's ridiculous that congress and the service itself have shot USPS in the foot when they could have actually taken aim on a target.

That's a hell of an idea to partner with Google for mapping.

There's no good reason not to.

or partner with NSA for mobile surveillance.

90% of the mail I get is junk, USPS is basically an advisement vehicle that is supplemented by the government.

USPS doesn't get supplemental funding from the government.

USPS generated something like $12B in revenue delivering 3.5 Billion Packages.
UPS generated $44B on 4 billion packages.

Including bulkrate, free matter for the blind, US Gov official mail (no postage), and first class letters, USPS generated $65B in revenue for 159 Billion pieces of mail.

Anyone still want to pitch that privatization plan?

Also:

-they are the only nationwide shipper who delivers on Sunday.
-they allow you to ship cash instruments and jewelry.
-they have a law enforcement division that takes mail fraud seriously.

Let USPS deliver more services at the post office. Services like paying bills, buying goods, etc.

USPS's results are pretty good when their liabilities are taken into account.

I think it would be a very good idea to load up on forever stamps,

To me it seems certain that either the post office goes bankrupt or they change the law and raise the price of stamps.

I dunno if Congress will allow them to go bankrupt, nor do I believe that they enjoy covering their losses.

elektronic said:   

-they are the only nationwide shipper who delivers on Sunday.


USPS delivers on Sunday? Since when? Or does their Next Day Express Mail work on Sundays? I can't recall ever seeing a USPS vehicle out on a Sunday.

Two solutions:

1) Quit screwing around with these damn 1 and 2 cent increases every year or two - make it a 5 or 10 cent increase once every several years and be able to keep daily delivery including on Saturdays. I just saw gas go up in price from $3.22 a gallon to $3.49 a gallon in the past week. I can deal with a 5 cent per stamp increase in price and I suspect that as long as they aren't coming at us more than once every 2 years or so, 99% of the population can deal with that postal increase without the slightest bit of annoyance.

2) Stop wasting so much time and money on packages from China. I'm not up on international postal treaties, particularly with respect to China, but how can thousands of Chinese sellers charge so little to send packages from China to their American eBay buyers, without stiffing the USPS for virtually nothing at all on delivering those packages all over the US? The PRC government subsidizes the shipping costs, but do any of those subsidies go to the USPS or is it working on a general reciprocity system? If the latter, I'm guessing the rate of packages coming from China to the US has to be hundreds, even thousands of times the number of packages coming from the US to China, which is hardly a reciprocal relationship.

they need to quit giving massive discounts to junk mailers who do nothing but spam consumers and only charge them like 19 cents or so. They also need to quit giving away free priority mail boxes. people load up on these free boxes and they go unused...this has to cost USPS tons of money. What other shipping service provides free materials?

It's 2013....people don't use regular mail all that much and people who ship packages don't really use USPS. I used priority mail all the time when doing eBay stuff, but most people go to UPS/FedEx etc. 95% of mail that we get at our house is pure junk. Every bill we get in email. When spam snail mail slows down, USPS will definitely go under.

move from 1,2,3 post offices in each town on a large property to small branches in supermarkets etc. and/or 1 post office for 3/4 towns.

Outfit the trucks with PA systems and let them sell ice cream on the side.

hebron1427 said:   anyone interested in opening a private post office system to compete with usps? if the answer is no, that should tell you what you need to know about the usps business model

That's against the law. Equifax was even fined for sending non-urgent mail through fed-ex

Now I have a question for you guys. Why do we expect the post office to cover its costs? We build roads without any expectation that the roads will cover their cost. Gas taxes pay for 1/2 of road costs. Where's the other half coming from? Why do roads deserve to be subsidized and the mail not?

The average salary for a mailman in my zip code is $95,346. I wonder if that is part of the problem???

The top paid mailman salary is 57000/year.

rmhop said:   they need to quit giving massive discounts to junk mailers who do nothing but spam consumers and only charge them like 19 cents or so. They also need to quit giving away free priority mail boxes. people load up on these free boxes and they go unused...this has to cost USPS tons of money. What other shipping service provides free materials?

UPS and FedEx do.

We don't have the Marines to turn a profit, nor the interstates, nor schools - they are good for our society and we'd be poorer as a society if we lost them.

The USPS does need to fire some of the appalling employees they have - 4 or 5 in my local PO need to be shitcanned ASAP, the lazy job-for-lifers.

It's illegal for a private company to compete against the post office. They need competition. Let 'em either sink or swim on their own.

Laker312 said:   The average salary for a mailman in my zip code is $95,346. I wonder if that is part of the problem???

Wow, I didn't know that.
Could you provide the source so that I can check my zip code?

Maybe if the USPS wasn't mandated to pay >$5 billion per year to fund retirement/healthcare for its employees, 75 years into the future, its financial outlook would be better.

The vast majority of my mail isn't so time sensitive it couldn't wait a couple of days. Cut mail delivery to twice a week. Routes would be ran every other day M-Th and would cut the number of mail carriers in half.

Better yet, have a completely digital system where everyone who wants to send a document or message to a person or company simply enters the recipient's address in their computer, types their message, and presses 'send'. The recipient would receive the message instantly and the system would be completely free. This would require no mail carriers whatsoever. I would call it 'electronic mail'.

beatme said:   Maybe some employee quality metrics would help. Before we bring on the Newman references, let me just say that I see UPS guys busting their butts all the time, and I regularly see USPS carriers napping in their cars.
Funny, I see just the opposite in our area. The postal service here, is just glorified welfare. Talk on their cell phones all day and give abysmal service.

cajundavid said:   It's illegal for a private company to compete against the post office. They need competition. Let 'em either sink or swim on their own.Be careful what you ask for. Remove all the regulatory restrictions from USPS' ability to raise rates, turn them into a private company and watch the rates skyrocket. Without USPS being required to keep a lid on its prices, USPS, UPS and FedEx would just jack up their prices (UPS and FedEx can't really do that now because they have to compete against USPS).

For those people who think that they hardly ever mail letters and packages through USPS, so you don't really care if prices go up, think again. Postage costs factor in the cost of a ton of goods and services out there the same way that gas prices do. When gas prices go up, it's not just your direct costs that go up. Retailer costs also increase with the increases either partially or completely being passed on to the consumers. Postage rate increases work very similarly.

I am not saying good or bad. Canada Post does not deliver mail on Saturdays. They also allow small businesses like your neighborhood pharmacies to get a license as a mini post office. Why not give that a try?

Isn't part of their solvency problem is related to funding the ridiculously generous federal worker-like pension?

ganda said:   rmhop said:   they need to quit giving massive discounts to junk mailers who do nothing but spam consumers and only charge them like 19 cents or so. They also need to quit giving away free priority mail boxes. people load up on these free boxes and they go unused...this has to cost USPS tons of money. What other shipping service provides free materials?

UPS and FedEx do.

We don't have the Marines to turn a profit, nor the interstates, nor schools - they are good for our society and we'd be poorer as a society if we lost them.

The USPS does need to fire some of the appalling employees they have - 4 or 5 in my local PO need to be shitcanned ASAP, the lazy job-for-lifers.
UPS and FedEx give free shipping materials??? since when? within the last 6 months?

rmhop said:   ganda said:   rmhop said:   they need to quit giving massive discounts to junk mailers who do nothing but spam consumers and only charge them like 19 cents or so. They also need to quit giving away free priority mail boxes. people load up on these free boxes and they go unused...this has to cost USPS tons of money. What other shipping service provides free materials?

UPS and FedEx do.

We don't have the Marines to turn a profit, nor the interstates, nor schools - they are good for our society and we'd be poorer as a society if we lost them.

The USPS does need to fire some of the appalling employees they have - 4 or 5 in my local PO need to be shitcanned ASAP, the lazy job-for-lifers.
UPS and FedEx give free shipping materials??? since when? within the last 6 months?



No.. since ever. I've been getting free shipping label paper from UPS for over three years now. Just cut the UPS logo off and you are good to go.

alamo11 said:   rmhop said:   ganda said:   rmhop said:   they need to quit giving massive discounts to junk mailers who do nothing but spam consumers and only charge them like 19 cents or so. They also need to quit giving away free priority mail boxes. people load up on these free boxes and they go unused...this has to cost USPS tons of money. What other shipping service provides free materials?

UPS and FedEx do.

We don't have the Marines to turn a profit, nor the interstates, nor schools - they are good for our society and we'd be poorer as a society if we lost them.

The USPS does need to fire some of the appalling employees they have - 4 or 5 in my local PO need to be shitcanned ASAP, the lazy job-for-lifers.
UPS and FedEx give free shipping materials??? since when? within the last 6 months?



No.. since ever. I've been getting free shipping label paper from UPS for over three years now. Just cut the UPS logo off and you are good to go.
i'm talking boxes, tape, etc. you can't just walk into a UPS or FedEx and get free materials to drop your item in and ship.


"UPS packaging is provided free of charge to UPS account holders for selected Air and Worldwide Express services. Other packaging supplies are sold at The UPS Store® and UPS Customer Center locations."

How about if their rates for health insurance were the same as non-postal rates? The gap has been substantial for years but all they do is raise the price of stamps.

miqie said:   beatme said:   Maybe some employee quality metrics would help. Before we bring on the Newman references, let me just say that I see UPS guys busting their butts all the time, and I regularly see USPS carriers napping in their cars.
Funny, I see just the opposite in our area. The postal service here, is just glorified welfare. Talk on their cell phones all day and give abysmal service.


I think you are both saying the same thing? We live on a dead end street in town and are the only house and on my days off I'll regularly see the mailman pulled off to the side. I assumed he was taking a lunch break but it's common to go back by an hour or 2 later and he hasn't moved. I didn't say anything at first but since we're the only house down there our mail wasn't getting delivered everyday on multiple occasions after a few calls. on the last call I mentioned to his supervisor that I see him down there parked but our mail won't show up til the next day. He seemed very interested to know that. Six months later I still catch him sitting there all the time.

rmhop said:   alamo11 said:   rmhop said:   ganda said:   rmhop said:   they need to quit giving massive discounts to junk mailers who do nothing but spam consumers and only charge them like 19 cents or so. They also need to quit giving away free priority mail boxes. people load up on these free boxes and they go unused...this has to cost USPS tons of money. What other shipping service provides free materials?

UPS and FedEx do.

We don't have the Marines to turn a profit, nor the interstates, nor schools - they are good for our society and we'd be poorer as a society if we lost them.

The USPS does need to fire some of the appalling employees they have - 4 or 5 in my local PO need to be shitcanned ASAP, the lazy job-for-lifers.
UPS and FedEx give free shipping materials??? since when? within the last 6 months?



No.. since ever. I've been getting free shipping label paper from UPS for over three years now. Just cut the UPS logo off and you are good to go.
i'm talking boxes, tape, etc. you can't just walk into a UPS or FedEx and get free materials to drop your item in and ship.


"UPS packaging is provided free of charge to UPS account holders for selected Air and Worldwide Express services. Other packaging supplies are sold at The UPS Store® and UPS Customer Center locations."



Right, however all you need to get an account is just a credit card to verify your address

alamo11 said:   rmhop said:   alamo11 said:   rmhop said:   ganda said:   rmhop said:   they need to quit giving massive discounts to junk mailers who do nothing but spam consumers and only charge them like 19 cents or so. They also need to quit giving away free priority mail boxes. people load up on these free boxes and they go unused...this has to cost USPS tons of money. What other shipping service provides free materials?

UPS and FedEx do.

We don't have the Marines to turn a profit, nor the interstates, nor schools - they are good for our society and we'd be poorer as a society if we lost them.

The USPS does need to fire some of the appalling employees they have - 4 or 5 in my local PO need to be shitcanned ASAP, the lazy job-for-lifers.
UPS and FedEx give free shipping materials??? since when? within the last 6 months?



No.. since ever. I've been getting free shipping label paper from UPS for over three years now. Just cut the UPS logo off and you are good to go.
i'm talking boxes, tape, etc. you can't just walk into a UPS or FedEx and get free materials to drop your item in and ship.


"UPS packaging is provided free of charge to UPS account holders for selected Air and Worldwide Express services. Other packaging supplies are sold at The UPS Store® and UPS Customer Center locations."



Right, however all you need to get an account is just a credit card to verify your address
yeah but you are talking for overnight or worldwide shipments. You can't drop into a UPS store and throw something in a free box and ship it ground....which is what priority mail is the equivalent of.

scrouds said:   Now I have a question for you guys. Why do we expect the post office to cover its costs? We build roads without any expectation that the roads will cover their cost. Gas taxes pay for 1/2 of road costs. Where's the other half coming from? Why do roads deserve to be subsidized and the mail not?That's a very good question. Not only that, but we complain about USPS running a deficit while simultaneously expecting it to do a ton of unprofitable things that are nevertheless very much needed, like deliver mail to rural communities, deliver government correspondence for free, prosecute mail fraud, etc...

LawDawgAtl said:   scrouds said:   Now I have a question for you guys. Why do we expect the post office to cover its costs? We build roads without any expectation that the roads will cover their cost. Gas taxes pay for 1/2 of road costs. Where's the other half coming from? Why do roads deserve to be subsidized and the mail not?That's a very good question. Not only that, but we complain about USPS running a deficit while simultaneously expecting it to do a ton of unprofitable things that are nevertheless very much needed, like deliver mail to rural communities, deliver government correspondence for free, prosecute mail fraud, etc...

i'm pretty sure the US attorney prosecutes mail fraud, not the post office. and is there really a reason for them to deliver government correspondence for free? delivering mail to rural communities is usually not done by the USPS itself, but is typically outsourced to someone local to that area--i.e., joe the plumber who puts a USPS sticker on the side of his car 4 days a week and drives the mail around.

doveroftke said:   One potential solution that I like would be to deliver mail to businesses five days a week, to residences three days (Mon, Wed, Fri or Tues, Thurs, Sat, depending on the route), and deliver packages and premium services (Priority and up) every day.
I've always thought this as well. Alternate-day delivering should result in half the labor costs, since one carrier would cover 2 routes. In all reality, 2x/week delivery (meaning 3 routes per carrier) probably would be sufficient.

Only I'd include businesses in this as well - but let them (and anyone else) pay a monthly fee for daily delivery. Same with priority/packages - it goes out on the next scheduled delivery unless you pay a surcharge for ASAP delivery.

Skipping 163 Messages...
tomjef said:   neophyte said:   Nice one-liner - no need to think or type

The fact is post-based Netflix (which millions enjoyed during the last 15 years) would've never existed without media postal rates; the fact is small seller's eBay would've never existed without PO

Invest 5 minutes of your time in quoting on UPS and FedEx site that package you mailed to your mom; pass your judgement thereafter...


You seem to be under the mistaken impression that delivery rates would still be the same if private carriers specializing only in parcels/express were filling the every-address routes of the USPS.

Society has been subsidizing Netflix's artificially cheap mail rates. Sounds like a wise investment of public money.

We still pay to deliver it, we just don't pay it with stamps. Pull up your past year's tax returns.


Except that (at least for Netflix) the net gain was for the post office since most of their shipments were local -- there being a local center near most major P&D centers. Netflix also picks up their own mail on the back end so its only the "last mile" part to and from the local P&DC to the curb that is on the USPS. Without the long haul portions its pretty cheap mail for the USPS to handle. (I installed automation equipment in P&DCs many moons ago...)



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