USPS may lay off 120,000 workers [Archive] - Sawmill Creek Woodworking Community

Brian Elfert

08-11-2011, 7:08 PM

The USPS (Post Office) is supposedly laying off 120,000 workers. This will be quite the blow to the economy as most of these workers make a good wage for mostly minimal skill jobs. Without retraining it will be hard for many of them to make the same kind of wages ever again.

I wonder what other changes the USPS is making. I don't know how they can possibly reduce 20% of their workforce without some service changes. I will be sad to see 6 day delivery go because I order stuff via Priority Mail all the time knowing that Saturday is considered a delivery day. I can order something on Friday and still get it Monday and not pay overnight shipping.

Richard Link

08-11-2011, 7:14 PM

I believe that they are planning to close a large number of post offices (about 3700). They also mentioned losing saturday delivery. I guess there are some consequences to electronic mail...

Gary Max

08-11-2011, 7:17 PM

Richard is correct---they have already made the list of locations they plan on shutting down. The county seat where I live is on the list.

ray hampton

08-11-2011, 8:57 PM

one post office that I go to is usual back up all the way to the door between 20 to 30 customers

Brian Elfert

08-11-2011, 9:39 PM

One of the problems with Post Office customer service is they are a monopoly and there is no profit incentive to improve customer service. A for-profit retail store knows you won't come back if you have to wait too long. Retail stores will add another clerk or have a manager help out if lines are long. I constantly see employees in the back of post offices and wonder why they can't be out front helping when it is busy.

You can't exactly walk out the door if it is busy and drive down the block to a competing letter delivery service.

Most Post Office clerks seem to work at a slow deliberate pace. It doesn't help that their work spaces aren't optimized for speed. They shouldn't have to leave their station for 90% of what they do.

Dave Lehnert

08-11-2011, 10:06 PM

That is so sad.
I have been unemployed for over a year except for a temporary job this past spring. I feel for them. I had my old job for 24 years. at 9am was told to order product for the up coming week. 11am handed a paper the company was sold and all employees terminated.
People who have had good paying jobs is in for a shock when they go to apply for other jobs. Places that use to start out at $20+ HR has dropped that to $12.xx hr. Just because they can with high unemployment.

Brian Elfert

08-12-2011, 9:03 AM

I just read something today about how bad the union work rules are at the Postal Service. A worker doing data entry cannot touch a package. When the sorters get behind and the data entry person has no work he or she can't go over and help the sorters catch up. The union's premise is that if others were alowed to help then the sorters might get less hours. Management is also not allowed to touch packages for the similar reasons.

I think these work rules cost employers more money than anything. If it takes 75 employees with work rules maybe it would only take 50 employees if half or all of the workers could do multiple jobs depending on work load.

Belinda Barfield

08-12-2011, 9:21 AM

I went to the post office the other day to mail a check to a business with a PO box at that post office. The envelope was put on a truck, went south to the regional sorting center in Jacksonville, got sorted and put on another truck headed back to Savannah's main post office where it was put on another truck and taken back to the original post office. I wonder much money would have been saved if the person who removed the envelope from the drop box turned around and put it in the PO box. Probably not much for that one envelope but implement the same procedure for all of the other local mail and I bet it would save a bundle.

David Weaver

08-12-2011, 9:43 AM

Sooner or later, if they can't replace the good paying letter mail with packages or something, they're not going to be able to keep staffing levels up.

I'm sure, as has been stated, that the inability of people to jump in at the counter has to do with work role definitions in the work contracts.

Fingers will get pointed at management, union, whatever, but the underlying issue is that the nature of the business is changing and the money coming in isn't there while expenses, controllable (labor, pension, etc.) and not (fuel, etc), are probably only going to continue to go up.

I personally really like the post office. I use them instead of UPS whenever I can, because from an individual shippers standpoint, it is almost always cheaper for me to use priority mail than UPS ground, especially since UPS went public and they've started adding surcharges left and right. I don't ship that much stuff (as in, I only sell stuff I've used and decided I don't need), especially large stuff. Last I tried to ship something small UPS, it was $11 or $12, and the same thing priority was $7. There was a $3 residential surcharge, which is ridiculous - and that was directly from my UPS account online, not at a shipping counter. Their charges are beginning to look like cell phone bills, and it's pretty easy to tell they are not interested in business from individuals.

I'll miss the POs service on packages if they cut that back or if they increase rates, and there are a few folks at the PO I go to who are saints and very helpful to everyone (large suburban fast-paced p.o, different than the rural P.o. I grew up near).

Couple of years ago, I had to ship tuners to a banjo maker in italy. Tiny item, tiny box. I went to UPS to find out how much it would cost to ship, and they ran through the motions and told me $55 (that was for the lowest/slowest service rate!!). The person at the counter got all huffy when I told them I was going to look around and try to find a better rate, as if I had put them out effort-wise to get a rate and then not ship. I think it cost me $6 at the post office when I did ship it, air mail less than a week it was delivered. Way less than a pound, and 1/3rd or smaller than a box of tissues.

Dan Friedrichs

08-12-2011, 10:18 AM

This will be quite the blow to the economy as most of these workers make a good wage for mostly minimal skill jobs. Without retraining it will be hard for many of them to make the same kind of wages ever again.

Not to be a jerk, but I just don't understand comments like this. Minimally-skilled employees should NOT BE MAKING "good wages". They should be making minimum wage. Paying an employee more than the market thinks they are worth just results in us (the customers) paying more for service.

Matt Meiser

08-12-2011, 10:21 AM

Personally I think there are way too many post offices. In the last year I've probably been to the PO a handful of times. A couple to drop off packages, that I already paid for shipping online, because I missed the mail carrier and wanted them to go out that day. Those could have just waited another day. Once to apply for a passport. And once to pick up a certified letter that came when I wasn't home (and it was a mistake that it was even sent to me.) Yet there are 5 post offices within about 5 miles of my house and I live in a rural area. Go out to 10 miles and I bet there are 10+. Why do we need that many?

And looking at the average age of the people working in those offices, most would probably retire if the jobs went away.

David Weaver

08-12-2011, 10:28 AM

There are people in the world who are not capable of working something more than minimally skilled jobs. Not being mean spirited by saying that, it is the case. To think any adult should be paid minimum wage to do a job that is necessary, just because the skill set might not seem like doctor/lawyer work is a really thin grasp on reality and what it takes to just get by in society (and I don't work low-skilled work, so I'm not defending myself here).

As you get older, and you see people who have taken a few bumps and bruises over their lifetime, or been saddled with circumstances (beyond their control) that don't fit the cookie cutter go to school, go to college, go to get graduate degree (if needed), go to the workforce progression, your view will likely soften a little bit. I would hope.

I'm not that old, but I do a lot of labor-related work, and I see all of the different viewpoints from different employers. Fortunately, the number of employers who would actually treat employers like that are few.

keith jensen

08-12-2011, 10:32 AM

The article that I read stated 220,000 total jobs of which they estimate 100,000 of them will be through attrition. This means they are going way deeper than getting the older folks to retire.

Dan Friedrichs

08-12-2011, 10:45 AM

To think any adult should be paid minimum wage to do a job that is necessary, just because the skill set might not seem like doctor/lawyer work is a really thin grasp on reality and what it takes to just get by in society (and I don't work low-skilled work, so I'm not defending myself here).

I do see what you're saying, but it's not the job of the USPS to equalize class disparity. The lucky few who get jobs that pay much more than their market value are just...lucky. The point of minimum wage is to ensure that unskill-able people can make a decent living.

Any other business would not be paying people significantly more than their market rate if it wanted to stay profitable and competitive.

Stephen Tashiro

08-12-2011, 10:47 AM

I haven't worked for the postal service, but I don't think postal work should be classified as "minimally skilled". At least some of those jobs require taking a competitive examination, so they require aptitude, if not education. People that can get along in the bureacracy of a big company have a skill that big companies need.

Ben Hatcher

08-12-2011, 10:50 AM

Postal workers make between 10 and 25 an hour. 120k workers @ $10/hr is $2.4B in lost wages, $360M in lost federal taxes, and another $150M or so in local and state taxes. @$25/hr the losses to federal tax revenue is $900M.

Efficiency is important. Reducing waste is good. But you can't cost cut your way to success. They're going to have to re-examine their business model. Are Saturday deliveries really worth it? Are they charging bulk users like Netflix the actual cost of handling their materials? Is the distribution system efficient? Are there relatedproducts and/orrvices will good margins that they can enter? Closing post offices eliminates a potential revenue stream. Changing the cost structure of that post office while maintaining the service/revenue potential is a much better solution. As I understand it, that is exactly what they're doing in some cases.

Eric DeSilva

08-12-2011, 12:32 PM

Brian Elfert

08-12-2011, 1:29 PM

I'm sure the catalog business is good--look at the Grizzly and Lee Valley catalog junkies here--but man... My views on my willingness to fight for the USPS would change dramatically if only they got rid of 3rd Class mail.

You get rid of 3rd class mail and a huge chunk of the US Postal Service revenue goes with it.

David Weaver

08-12-2011, 1:51 PM

I do see what you're saying, but it's not the job of the USPS to equalize class disparity. The lucky few who get jobs that pay much more than their market value are just...lucky. The point of minimum wage is to ensure that unskill-able people can make a decent living.

Any other business would not be paying people significantly more than their market rate if it wanted to stay profitable and competitive.

I think they are going to find that if they don't cut wages (and they will, at least for new hires if they haven't already - that's usually the first spot to trim), they're going to have to manage their benefit costs. I don't think UPS pays a lot less than the post office, some of their entry level positions aren't too highly paid, I guess, but their productivity per employee is probably designed to be a lot higher. I'd see USPS going in that direction.

One item that is not discussed often enough, and this goes for states, local governments, etc, is the effect that a down market has on employee costs. Every funded benefit (pensions, funded retiree health) puts pressure on the budget when the market is down, and the same folks who are anti-business aren't aware how much of their daily life depends on expansion of the economy. That's maybe a separate discussion, but it does fit in here such that it puts pressure on the USPS budget to fund their benefits. The solution to the problem is probably going to have to be multi-faceted (cuts in service, increase in costs of service, and decreased labor costs via benefits, wages or both), but I don't want to see them employing minimum wage letter carriers, and have the result of that on my front porch.

Ken Fitzgerald

08-12-2011, 2:10 PM

This thread is so close to being closed that it's not funny.

Political comments, opinions and ....personal and professional attacks are not allowed as per the Terms Of Service.

When the numbers of those comments become too great, the amount of work required to edit them outweighs the thread's value and we just close and move them.

I, for one, would vote to do away with the O/T Forum as too many Members/Contributors have shown they can't post without political comments or disagree without being unfriendly.

David Weaver

08-12-2011, 4:43 PM

John Fabre

08-12-2011, 4:56 PM

Very sad news indeed.

Brian Elfert

08-12-2011, 5:23 PM

This thread is so close to being closed that it's not funny.
I, for one, would vote to do away with the O/T Forum as too many Members/Contributors have shown they can't post without political comments or disagree without being unfriendly.

Why would you get rid of the part of the forum that has the third most number of posts so far as I can tell? I seem to recall that someone in the past said this part of Sawmill Creek had the most views of any of the forums.

Ken Fitzgerald

08-12-2011, 5:50 PM

Brian...... Because the OT Forum takes the most babysitting....and that's what it boils down to.....people acting like adolescents..and requiring babysitting...not all the time but often enough that it consumes a lot time......okay......for some reason people feel because it's Off Topic, they can say what they want......slyly slip in a political statement, comment or a personal or professional attack and get away with it.

And frankly... None of the Moderators enjoy deleting or editing threads....None of us. Not me or John Keeton...Bruce Page..Steve Schlumpf .......Dennis Peacock......Keith Outten ..Dave Anderson...Mike Null.......Zahid.......none of us. It's not fun. You tend to make enemies from those who either choose to not abide by the rules they agreed to when they joined or their ego leads to believe the rules shouldn't apply to them......and then you end up answering a multitude of PMs or emails about your decision.

I post as much as anybody in this forum....and I learn a lot from what I read here....

It has never been seriously discussed to eliminate the O/T Forum..but it has been casually discussed. I can remember the late Ken Salisbury commenting in the Moderators Forum about it and he felt the same way...... there are times in the past few days where if it was discussed I would vote to eliminate it.

Ken Fitzgerald

08-12-2011, 6:00 PM

David.....I won't and don't have to defend what I said....but I saw IMHO a professional attack in the form of questioning the skill levels of mail carriers....I believe a political statement is made when someone starts referring to " equalizing class disparity".

It's difficult to discuss economics without becoming political.

and so I issued a warning.

I suppose I could have just moved the thread from public view.

Scott Shepherd

08-12-2011, 6:52 PM

I haven't figured out their business model (or lack of one). They are going broke, right? So how does a company that's broke and getting broker by the day afford to give people boxes to ship products in for free. If I want boxes for my business, I have to order them from somewhere and pay $1-3 per box (smaller boxes). Yet I can log into USPS and order all the boxes I want for free. They give them to me for free and then they deliver them for free. Then, when I want to ship something in that box, you charge me less than anyone else to do it, so at no point did you recover the cost of the box.

Gee.....I can't understand why we are losing millions......maybe because you're giving millions of boxes away for free that should cost people at least $1 each.

Paul McGaha

08-12-2011, 6:55 PM

I like using them. They're old school.

Can see though where emails really hurt them. Paying bills electronically also.

Sorry to hear of these large cuts. Bad for everyone especially those that will lose their jobs.

PHM

Ken Fitzgerald

08-12-2011, 7:04 PM

I agree...they should charge for their boxes. I can see providing them free for a period of time to establish themselves in the market but once established, they should charge.

Take a look at something else.... according to references I found on the Internet.....in 1863 it cost 3 cents to mail 1/2 oz.... today it's 44 cents for 1 oz. That's not a lot of increase in 150 years.

USPS is still cheaper to use than Fedex if you are sending something mailable overseas. I send small stuff to New Zealand via USPS a lot cheaper than using Fedex or UPS.....

Joel Goodman

08-12-2011, 7:32 PM

If the comment about third class mail refers to "junk mail" then I'm all for eliminating it! I fail to understand why unwanted junk mail is delivered at a cheaper rate than letters that folks would like to get. It's a huge waste of material and fills up the landfills. If we must have it then let junk mail pay extra not less. And while I'm ranting, didn't it used to come in an envelope? -- Now its a big mess hiding bills and letters I want to receive.
Wow -- feel better that I got that off my chest!!

PS: To me the postal service is something that every country has and needs -- an essential service like the police or fire department -- and let's not go back to the days when fire departments were private, and if you didn't have the plaque that showed that you had paid, they watched your house burn up!
Wow --- feeling even better!!

Phil Thien

08-12-2011, 7:45 PM

Well, my letter carrier is very professional, also my neighbor (around the corner), and also someone I call a friend. He is bright and articulate, and watches for problems in the neighborhood.

I sure hope he doesn't lose his job.

What sucks about these scenarios is that they wait so long and then they have to take drastic action. I'd much rather see an organization resize via attrition.

Michael Weber

08-12-2011, 9:04 PM

Jason Roehl

08-12-2011, 9:29 PM

If the comment about third class mail refers to "junk mail" then I'm all for eliminating it! I fail to understand why unwanted junk mail is delivered at a cheaper rate than letters that folks would like to get. It's a huge waste of material and fills up the landfills. If we must have it then let junk mail pay extra not less. And while I'm ranting, didn't it used to come in an envelope? -- Now its a big mess hiding bills and letters I want to receive.
Wow -- feel better that I got that off my chest!!

It's not "junk mail" to the USPS--it's "Money Mail", and according to our local postmaster (county's pop is about 160,000), it accounts for roughly 2/3 of their revenue. It's also cheaper because it's pre-sorted and/or goes "one to a box", so there's no intelligent sorting needed when going out for delivery.

I wonder what UPS/FedEx/DHL/etc. current profitabilities are. If those companies, which are the competition (though minus a few requirements like 6-day delivery and to every address) are breaking even or better, than clearly one of the problems is the pricing structure of the USPS since they are running a similar operation but charging much, much less.

David G Baker

08-12-2011, 10:26 PM

Many Postal workers are ex-military.

Joel Goodman

08-13-2011, 12:01 AM

It's not "junk mail" to the USPS--it's "Money Mail", and according to our local postmaster (county's pop is about 160,000), it accounts for roughly 2/3 of their revenue. It's also cheaper because it's pre-sorted and/or goes "one to a box", so there's no intelligent sorting needed when going out for delivery.

I wonder what UPS/FedEx/DHL/etc. current profitabilities are. If those companies, which are the competition (though minus a few requirements like 6-day delivery and to every address) are breaking even or better, than clearly one of the problems is the pricing structure of the USPS since they are running a similar operation but charging much, much less.

Exactly my point -- charge more for junk mail -- they're not about to Fedex it. And if there is a little less of it bravo!

Larry Edgerton

08-13-2011, 6:32 AM

Kent A Bathurst

08-13-2011, 7:48 AM

FWIW - the numbers show that USPS business volume - in number of pieces - has declined 21% from 2007 levels [FY 2008-'09-'10, declines continue in '11]. The sad truth is that many businesses have had to severely cut back operations, employees, locations, etc., to match their business model to the demand for their products/services.

Curt Harms

08-13-2011, 8:32 AM

Perhaps the wrenching changes and dislocations that have hit private employers are finding their way to the public sector. Not long ago, if you got on with USPS, you were set for life as long as you didn't screw up TOO bad. I drove past Bethlehem's Steel's site yesterday. 50-60 years ago you got a job with "The Steel" you were set for life (you thought). Today there are a couple blast furnaces still standing to provide a backdrop for the Casino.

Scott Shepherd

08-13-2011, 8:33 AM

Starting next week, I'd do a few things right out of the gate. I'd start selling boxes at a profit. Not cost, a profit, as opposed to losing money on boxes, then I'd launch one heck of a marketing campaign. I'd market priority mail like crazy. Why? Simple. It smokes FedEx and UPS on coast to coast shipments. I'm on the east coast. I have many material suppliers on the west coast. UPS takes 5 business days to get here and costs a fair amount. 5 business days is a long time to wait for materials that are off the shelf materials. Priority mail gets me that same package in 2-3 days. For me, I wouldn't even consider UPS or FedEx for coast to coast transactions because they ship it all ground. I'd market that, instead of the thing they market now, which is the flat rate boxes. Why would you encourage people to mail heavier things for less money? I'd cut that policy out. You'd pay for the weight, regardless, like every other carrier in the world offers.

I used to mail a lot of packages and became quite friendly with the local folks. You used to fly through the place. Then in a matter of weeks, it all came to a stand still. I asked them what happened and they told me at the time that they just launched a new computer system and the way they have to process transactions in the new system took 2-3 times longer than doing the same thing in the previous system. They were very frustrated with the changes because it forced them to slow down. To me, the people are great, it's the system that's broken. They need some system gurus to come in and change the way the whole place runs. Cough up some cash and pay for some ex-CEO's of FedEx or UPS to come fix it.

Phil Thien

08-13-2011, 9:38 AM

Starting next week, I'd do a few things right out of the gate. I'd start selling boxes at a profit. Not cost, a profit, as opposed to losing money on boxes, then I'd launch one heck of a marketing campaign.

I think this makes sense. Nobody that has received a free box from USPS hasn't walked away without feeling like "this is crazy, why are they giving me things."

Also, I receive items shipped via UPS and FedEx that are, on occasion, packed in these free boxes. So basically, USPS is subsidizing the outfits shipping items to me.

I'd market priority mail like crazy. Why? Simple. It smokes FedEx and UPS on coast to coast shipments. I'm on the east coast. I have many material suppliers on the west coast. UPS takes 5 business days to get here and costs a fair amount. 5 business days is a long time to wait for materials that are off the shelf materials. Priority mail gets me that same package in 2-3 days. For me, I wouldn't even consider UPS or FedEx for coast to coast transactions because they ship it all ground. I'd market that, instead of the thing they market now, which is the flat rate boxes.

The only caveat is I believe that a lot of USPS packages are carried by UPS and/or FedEx. I do wonder how much money they actually make on those packages. They don't charge much. Perhaps it would be worthwhile to do a 48-hour analysis to see if adjusting prices slightly is in order, then market the snot out of it.

They have marketed heavily in the past, but it has always been "we're cheap." It should be "we're less expensive, we break less stuff, and we're faster."

Why would you encourage people to mail heavier things for less money? I'd cut that policy out. You'd pay for the weight, regardless, like every other carrier in the world offers.

I used to mail a lot of packages and became quite friendly with the local folks. You used to fly through the place. Then in a matter of weeks, it all came to a stand still. I asked them what happened and they told me at the time that they just launched a new computer system and the way they have to process transactions in the new system took 2-3 times longer than doing the same thing in the previous system. They were very frustrated with the changes because it forced them to slow down. To me, the people are great, it's the system that's broken. They need some system gurus to come in and change the way the whole place runs. Cough up some cash and pay for some ex-CEO's of FedEx or UPS to come fix it.

I agree. Too many times changes are made w/o worthwhile testing. That is, when the guys at the counter say it is "too slow" they are condemned with nonsense like "oh they just don't like any changes, let's push ahead, it will be fine."

I understand there are private/public concerns with respect to competition here. UPS and FedEx certainly don't want USPS to have any unfair advantages due to their quasi-government backing. But I just think USPS could be managed better.

Eric DeSilva

08-13-2011, 12:58 PM

Theoretically true, but having looked at a Postal Rate case once upon a time, I think I remember that the classes aren't supposed to subsidize one another. It appalls me that 99.9% of what the USPS delivers to my house goes from the mailbox directly into the first trash can I can find. That isn't the basis for a business--certainly doesn't (in my mind) justify maintenance of the statutory monopoly.

Matt Meiser

08-13-2011, 1:16 PM

Yep, I get the mail each day and I'd bet 70% of the envelopes never get opened. Only a few of the catalogs don't go straight to recycling. Huge waste.

Phil Thien

08-13-2011, 1:42 PM

Yep, I get the mail each day and I'd bet 70% of the envelopes never get opened. Only a few of the catalogs don't go straight to recycling. Huge waste.

But that is kinda the deal with all forms of advertising. Most people that hear an ad on the radio, see one on TV, or spot one on a web page or in a newspaper, don't act.

But if the direct mail pieces and catalogs weren't working at all, they'd stop sending them. Some people receive a catalog and place an order. Enough of them do this in order to pay for your catalog to get printed and sent right to recycling.

And many catalogs are printed on recycled material, and then the catalog is recycled again when the user is done. Which creates jobs.

I'm not arguing with you, mind you. I sort of wonder if it is all worth it. And if our USPS is subsidizing inefficient advertising methods. But there are some good sound reasons to keep it up.

This Internet thing really is changing things, maybe not always for the better.

Matt Meiser

08-13-2011, 1:55 PM

Who said anything about ads? I was talking about the bills. :D

Brian Elfert

08-13-2011, 4:36 PM

If USPS dumps the "free" boxes I'll bet their volume goes down by a noticeable percentage. The box is factored into the cost of the service. I would be very surprised if the USPS is losing money on Priority Mail. Online shopping and shipping keeps increasing in volume. If people are abusing the "free" boxes then charge up front, but then give a credit when using their box. I used to see people turning Priority boxes inside out, but that stopped when they started printing Priority Mail inside the boxes.

3rd class/bulk mail costs less to mailers because they do a lot of the work for the Post Office. My employer spends a lot of money on the software used to meet USPS requirements for sorting, addressing, and labeling. We also save a lot of money on postage by using the software.

Fedex hauls US Mail on their planes. This mail used to go on passenger planes as cargo, but the USPS had to change after 9/11 with the new security policies. Most 1st/3rd class mail still goes in trucks with Priority Mail and Express mostly by plane.

Phil Thien

08-13-2011, 4:42 PM

Who said anything about ads? I was talking about the bills. :D

LOL, that is AWESOME. I walked right into that.

Brian Elfert

08-13-2011, 4:43 PM

If advertisers didn't get responses to direct mail they wouldn't keep doing it. If they did something like double the cost of 3rd class the volume would probably drop dramatically as cost/benefit ratio wouldn't make sense anymore.

As far as flat rate Priority Mail they must make more money on that service. The only boxes you can get without asking at the counter are all flat rate.

Chris Kennedy

08-13-2011, 8:51 PM

There is something very important to keep in mind about the USPS -- they aren't a business. They are self-supporting and self-funding, but they are not driven by a profit motive. They are supposed to provide a government service that the general public can afford. They cannot set their pricing to maximize profit. They have to set their pricing so that everyone can use them. That is a completely different business model from the likes of UPS, FedEx and the like. USPS is suffering from a lot a material being sent electronically (bills, etc.) and so they are contracting their services (and really, adjusting to how things are), but UPS/FedEx/etc don't deal with that. They weren't in that aspect of the business and so aren't feeling the crunch.

Cheers,

Chris

Gary Max

08-13-2011, 8:58 PM

One of the things that makes our system work is the ablity to move products and materials.
Closing this many shipping points is not a good thing.
The USPS does move a lot of tonage every day of the week.

Kent A Bathurst

08-14-2011, 8:40 AM

If advertisers didn't get responses to direct mail they wouldn't keep doing it.........

Plus, I'll make a guess that the advertisers are attempting to get us to at least touch and look.....spam filters and email blocking have gotten pretty effective, so they can't reach us via that medium.

Scott Shepherd

08-14-2011, 9:28 AM

There is something very important to keep in mind about the USPS -- they aren't a business. They are self-supporting and self-funding, but they are not driven by a profit motive.

In theory, but in reality, if they were self supporting, they wouldn't be out of money and having to close post offices. Self supporting would mean that they can keep the places open and keep their obligations, which they cannot.

Chris Kennedy

08-14-2011, 10:39 AM

In theory, but in reality, if they were self supporting, they wouldn't be out of money and having to close post offices. Self supporting would mean that they can keep the places open and keep their obligations, which they cannot.

Self-supporting in the sense that they don't get tax money.

Greg Peterson

08-14-2011, 11:32 AM

Article 1, Section 8, clause 7: To establish Post Offices and post Roads

The USPS could certainly raise their rates as they are far lower than UPS. I do think their biggest disadvantage is the wait at the looking post office. Some stations are quick while others are sssslowwwww.

UPS used to be a bargain. Not so much anymore. Ever since their IPO their rates have been going up. And the workers benefits packages are no where near what they use to be. The new bottom line is making sure their quarterly reports put a smile on the face of their investors.

Phil Thien

08-14-2011, 4:02 PM

UPS used to be a bargain. Not so much anymore. Ever since their IPO their rates have been going up. And the workers benefits packages are no where near what they use to be. The new bottom line is making sure their quarterly reports put a smile on the face of their investors.

I suspect part of the problem is the deals they cut outfits like Amazon. FedEx/UPS have to make up the numbers somewhere, so they hit the smaller and medium sized shipper with much higher rates so they can carry Amazon stuff for cheap.

Greg Peterson

08-15-2011, 9:49 AM

Here is one heck of a problem the USPS was straddled with, and likely near the heart of the matter.

From the Washington Post:
"Postal workers have made many concessions to lower costs in an age of dwindling mail volume, postal unions said. The service’s real problem, they said, is that Congress in 2006 stuck it with the requirement that it pay, over 10 years, enough to cover the cost of 75 years worth of future retiree benefits — at a cost of more than $5.5 billion a year."

Congress gave the USPS ten years to put $55 billion in reserve. I would say that is a ridiculously unrealistic goal. But then I suppose that was the point.

John Lohmann

08-15-2011, 10:31 AM

Brian Elfert

08-15-2011, 10:50 AM

Can Fedex and UPSeven legally deliver to a APO/FPO address? Are they a monopoly like a PO box?

Ken Fitzgerald

08-15-2011, 11:22 AM

It would be interesting to know if FPO and APO are military mail sorting offices or simply run by the USPS for the military.........

Belinda Barfield

08-15-2011, 11:34 AM

http://www.shipitapo.com/personal/apo_fpo_guide.php

It is my understanding that UPS and FEDEX aren't allowed to deliver to FPO and APO addresses.

John Lohmann

08-15-2011, 11:39 AM

Is it a monopoly, or a service they choose to offer, that UPS can't make money on?

Ken Fitzgerald

08-15-2011, 11:43 AM

At the time the APO/FPO system was devised, I doubt if UPS even existed...certainly FEDEX didn't exist.

Also at the time the APO/FPO system was devised, the USPS was part of the government....so really.....the mail was just transferring from one government entity to anther.

Jim Laumann

08-15-2011, 1:06 PM

Don't forget that the USPS supports the troops! Ups does not support APO/FPO addresses. That's the way it was when I was in the service. I don't know if this has been posted or not. I think serviceman appreciate the care packages that they get from home, that UPS may not deliver.

A group of us at work recently sent off a bunch of care packages to the son of a co-worker (and the troops that work for/under him). We used Priority Mail and conventional 1st class. The USPS knocked of a $1 a box on the priority mail boxes. The thank you we got back (from the troops) indicated that the appreciation of the packages was huge.

W/ regard to the service provided by the postal service, the people behind the counter at the 3 offices I use seem to do their best to provide speedy service.

Jim

Eric DeSilva

08-15-2011, 1:16 PM

But that is kinda the deal with all forms of advertising. Most people that hear an ad on the radio, see one on TV, or spot one on a web page or in a newspaper, don't act.

I know this isn't your point, but I can turn off the radio or TV, and pick alternatives to obtain content that don't involve advertising. No other medium has a right to come on to my property--without my consent--and deposit trash there. I understand that there is a business there, but consider what that business is--USPS is using their right to walk onto my property to the benefit of advertisers, essentially making money off my privacy. I don't like that, and the net result is that I don't have a lot of sympathy for the organization. I used to take it as a cost for the services they provided that I wanted and found useful. But, the reality is that now, I get my bills electronically through my bank's bill payment system and I have pretty much given up on magazines. So the only thing that seems to come through my mailbox that is necessary at all is county, state and Federal correspondence (which, frankly, seems like more of a benefit to them, not me).

Gary Max

08-15-2011, 1:28 PM

Five years ago USPS closed the little branch store down the road at the corner market. Which meant that a trip to the post office was 26 miles. Now they are going to close that one also. They are making it very hard on folks around here.

Steve Kubien

08-15-2011, 2:15 PM

You guys get mail 6 days a week? Good heavens, why would you need that? Realistically, I could be very happy seeing mail arrive 3 times a week. If I NEED something on the off days, I would use a courier or learn how to plan better really fast.

FWIW, we have 5 day service here in Canada.

Dave Anderson NH

08-15-2011, 2:49 PM

Several things come to mind here. The postal service was set up to provide a service that was necessary and at the time 200+ years ago government was the only entity strong enough and widespead enough to set up and manage a communications service. Profit was not a consideration at inception though it was hoped that service fees (stamps) would cover costs. The postal service was the thread that would sew the country together. Over the years technologies and means of communications have changed with telephone, telegraph, radio, TV, and lastly the internet. The postal sevice is still by its charter required to provide the same services it started with and has added a number of new ones. The charter and congressionally mandated rules (laws) both hinder and help the post office. They can't change rates without approval, and there are numerous other restrictions placed on them which limit freedom to change. At the best it provides oversight, at the worst it almost entirely prevents any quick response to a change in the business environment. As an example, postal rate changes take a minimum of 6 months to get approved and usually it is longer.

I for one have had great service from the postal service. I think that people underestimate the amount of knowledge about classes of mail, types of rate, rules and restriction, etc, etc, that the postal clerk at the service window needs to be conversent with. If you work with them, they can be good sources of information and a great asset to you. The same is applicable to many other postal jobs. It might not require a college degree, but it does require training and a reasonable amount of specialized knowledge that has to be retained. Good service requires the payment of good wages. Where the crunch will come is when the proposed service changes, layoffs, rate changes, and post office closing come up against political presssure both for and against. That's politics and we'll leave that one alone.

FYI FPO and APO addresses are handled by the postal service and postal personnel in the US until it is sorted at the main postal centers. Once the mail is ready to be shipped to shipped to the first overseas desination it enters the military system and is distributed by military personnel. Even stateside APO/FPO addresses such as ships at home port are handled by the military once it reaches the postal service post office closest to a military facility.

Ernie Miller

08-15-2011, 3:13 PM

I think, and have always thought, that the Post Office offers its customers the biggest bargain in the country. Write a letter - put it in your mailbox - raise the flag. Someone will come and take your letter...get it to its destination... and hand deliver it to its recipient. All for 44 cents. 44 CENTS! You couldn't hire someone to take your letter to the post office for 44 cents. Complain about the service if you must, but you will miss it when it's gone.

Dave Lehnert

08-15-2011, 6:16 PM

Phil Thien

08-15-2011, 7:52 PM

USPS is using their right to walk onto my property to the benefit of advertisers, essentially making money off my privacy. I don't like that, and the net result is that I don't have a lot of sympathy for the organization.

Well, if you'd burn your junk mail, you'd see that they are delivering free fuel instead of just garbage.

You aren't really that upset about junk mail, are you?

Joe Bradshaw

08-15-2011, 8:38 PM

Eric DeSilva

08-16-2011, 8:07 AM

Well, if you'd burn your junk mail, you'd see that they are delivering free fuel instead of just garbage.

You aren't really that upset about junk mail, are you?

Most 3rd Class would off-gas some nasty stuff, so no real desire to burn. I'm not really upset about junk mail--I think it is something I've learned to live with. The problem that I have is that it causes me to be a lot less sympathetic to the plight of the USPS. I'm just not really sure they do much for me. Honestly, I cannot remember the last time I was at a Post Office.

Orion Henderson

08-16-2011, 3:45 PM

I'm going to take advantage of those free boxes as long as they do it. I order a case of each one almost every day-and use them. I'd market the coast to coast thing like crazy too. 2-3 days from east to west (or west to east) is excellent. But then you get the oddities-poor tracking and intermittent service. I shipped two boxes priority mail last week (along with many, many others). I am in Connecticut. One went to New York, one to California. Two days later the person in California had their package, the person in NY didn't.

Because mail has the unique ability to deliver to mailboxes, and they go to every house every single day, they don't need to ship by weight like UPS & FedEx. Flat rate boxes, even if they charged for them, are a huge advantage that I think they should promote. Or add some to the cost for the boxes.

I will say this, my local PO has gotten much much better on the service end recently. My local postmaster called me personally to make sure things were going well with our daily pickup.

Ken Fitzgerald

08-16-2011, 9:52 PM

A number of posts were reported as political and I agreed. I deleted them.

You can disagree and do it in a civil manner. Keep it friendly folks,

Curt Harms

08-17-2011, 8:35 AM

This has been an interesting thread. I am a retired postal employee(1987-2008). I was a rural mail carrier. I saw how the internet affected our mail volumne. But in my opinion, the biggest problem with the postal is the management. People are put in a postition that they know little about. Then there is micro management from higher headquarters.

Thanks Joe for the view "from the other side". I doubt the problems you mention are unique to USPS but they're still problems. The Peter principle writ large. I wonder how being what I'd consider a hybrid organization - neither truly private or a goverment entity - affects the governance/management of the USPS.

Darius Ferlas

08-17-2011, 10:34 AM

Take a look at something else.... according to references I found on the Internet.....in 1863 it cost 3 cents to mail 1/2 oz.... today it's 44 cents for 1 oz. That's not a lot of increase in 150 years.

A good point.
In fact today's $0.44 price is below the inflation rate and below every single indicator.
If USPS charged what others charge for their goods and services, relative to the devaluation then these are some of the scenarios how much sending a letter would cost:

$0.44 actual cost

$0.65 using the GDP deflator
$0.86 using the Consumer Price Index
$6.10 using the unskilled wage
$13.00 using the Production Worker Compensation
$12.80 using the nominal GDP per capita
$170.00 using the relative share of GDP

I think Americans are getting a very good deal using the USPS. Better than pretty much any other public or private service.

Eric DeSilva

08-17-2011, 11:34 AM

I think Americans are getting a very good deal using the USPS. Better than pretty much any other public or private service.

While postal rates have fared well against large scale indices, that doesn't mean you are getting a good deal. Look at the drop in prices for cell phone minutes over the last 20 years, for example. The real question is whether, in the absence of the postal monopoly, similar services could be provided by other firms for less than $0.44. Given that UPS and FedEx have been lobbying for years to end the monopoly, I'm assuming they believe they could undercut the USPS and make a profit. The fact that the USPS insists on maintaining its monopoly suggests to me that they feel the need to be protected from competitive forces, which would imply their rates are high.

Brian Elfert

08-17-2011, 12:28 PM

Delivering mail isn't technological like cell phone minutes. Automation has helped the USPS reduce sorting and handling costs, but it still takes a lot of petroleum products to deliver mail and we all know what is happening to the cost of oil. Labor costs contuinue to rise too. If the costs of everything went down we would have deflation, not inflation.

I'm all for dropping the first class monopoly, but does anyone really think UPS and Fedex would be willing to lose money on deliveries to places like Alaskan villages where mail is flown in on small planes?

Glenn Clabo

08-17-2011, 12:36 PM

Given that UPS and FedEx have been lobbying for years to end the monopoly, I'm assuming they believe they could undercut the USPS and make a profit. The fact that the USPS insists on maintaining its monopoly suggests to me that they feel the need to be protected from competitive forces, which would imply their rates are high.

I'm thinking your thinking is at least slightly flawed... FedEx uses USPS to deliver many of their packages here.

Darius Ferlas

08-17-2011, 1:07 PM

While postal rates have fared well against large scale indices, that doesn't mean you are getting a good deal. Look at the drop in prices for cell phone minutes over the last 20 years, for example.
I have no data on how the prices fell, though I know they did. I remember $5.00 per minute in 1988. But I think the comparison is not the most fortunate. A lot of products start up at a very high pricing level simply because they are cutting edge and some people don't mind paying premiums for the right to show off. As the privileged market gets saturated the volume to price factors start kicking in. If cellphone service cost today what it did 20 years ago you'd have very few people using it.

The real question is whether, in the absence of the postal monopoly, similar services could be provided by other firms for less than $0.44. Given that UPS and FedEx have been lobbying for years to end the monopoly, I'm assuming they believe they could undercut the USPS and make a profit. The fact that the USPS insists on maintaining its monopoly suggests to me that they feel the need to be protected from competitive forces, which would imply their rates are high.

2009 Rates for overnight packages:

Fedex
UPS
USPS

5lbs
$64.23
$64.23
$37.62

10lbs
$87.78
$87.78
$55.48

15lbs
$110.40
$110.40
$69.59

For letters (overnight):
Fedex - $27 to $55
UPS - $30 to $63
USPS - $17.50 flat rate

Clearly, USPS's alleged "monopoly" is good for the customer.

Ken Fitzgerald

08-17-2011, 1:18 PM

You can't compare technology manufactured in factories in Asian countries to US mail delivery. There is no offshore delivery area........ and if there was, it would just increase the delivery time.

Ernie Miller

08-17-2011, 1:31 PM

The fact that the USPS insists on maintaining its monopoly suggests to me that they feel the need to be protected from competitive forces, which would imply their rates are high.

Quite frankly, I could care less if another carrier could undercut the USPS. I feel the Post Office is giving me good service at a very good price, and has done so for years. So what if another carrier comes in and lowers the price to 43 cents by "employing a few robots here and there". When I lived in NY, I always appreciated Fred (my mailman) who trudged through the snow and ice to bring me my mail every day. I'd much rather pay a few cents more to make sure that Fred keeps his job and can feed his family. Getting the lowest possible price often comes with consequences I'm not willing to pay.

Eric DeSilva

08-17-2011, 2:04 PM

I'm thinking your thinking is at least slightly flawed... FedEx uses USPS to deliver many of their packages here.

And USPS also contracts with other carriers for US Mail as well.

Eric DeSilva

08-17-2011, 2:07 PM

You can't compare technology manufactured in factories in Asian countries to US mail delivery. There is no offshore delivery area........ and if there was, it would just increase the delivery time.

I wasn't actually making that comparison. My point was that to presume something that is less than GDP or other gross indicator growth is a very good deal is not legitimate. There are lots of products the have a price growth less than the GDP or other economic indicators that are not good deals. There are products where prices are above gross indicators that are good deals. They don't correlate.

Eric DeSilva

08-17-2011, 2:23 PM

Clearly, USPS's alleged "monopoly" is good for the customer.

Wow. I'm shocked. You didn't feel strange writing that a monopoly is "good" for customers? That goes against the grain of pretty much all economic thought. And I'm also unclear on exactly what about the USPS monopoly is "alleged"? It is a statutory monopoly--there's no if and or but about it.

I'm also not sure your comparisons are head to head. If I google "fedex versus us postal service prices," I seem to come up with a lot of statistics and anecdotes going the other way. Here's an interesting one: http://reviews.ebay.com/Keeping-Shipping-Prices-Low-FEDEX-VS-USPS-VS-UPS_W0QQugidZ10000000004893434 That link also points out that the products are somewhat differentiated.

But, let's get down to common sense brass tacks. If you think USPS is able to compete on its own, why have they fought so hard to oppose elimination of the postal monopoly? And, if you really believe your numbers and USPS underprices everyone else on all services (rather than figures gerrymandered to achieve a result), do you really think all the people using FedEx and UPS are just stupid? If you believe the monopoly makes no difference, then you are alleging that the market is competitive. If the market is competitive, explain why USPS is unsuccessful and FedEx and UPS are successful?

Ken Fitzgerald

08-17-2011, 2:27 PM

Eric....take a letter....go Fedex....and ship it.....see what it costs. As a corporate employee before I retired, I shipped time sensative documents via Fedex when necessary. The USPS doesn't have a monoply. In fact, they have competition.

Eric DeSilva

08-17-2011, 2:29 PM

I'm all for dropping the first class monopoly, but does anyone really think UPS and Fedex would be willing to lose money on deliveries to places like Alaskan villages where mail is flown in on small planes?

That argument--to me--isn't persuasive. USPS isn't actually delivering to some of those places--it has contracted with private parties to make those deliveries anyway. But, you are arguing that other mail should subsidize the costs of rural delivery. To the extent we, as a country, make the social welfare decision to subsidize the costs of delivery to remote places, there isn't any real reason why the subsidy has to be paid to the USPS, as opposed to UPS or FedEx. That could change the economics. By making the subsidies more explicit, it might also cause people to reconsider what we are subsidizing. I, for one, would rather subsidize broadband services instead of 3rd Class Mail delivery.

Eric DeSilva

08-17-2011, 2:31 PM

Their monopoly does not extend to "priority" services, which is where UPS and FedEx compete. They cannot compete for non-priority (i.e., First Class Mail) services, because that is a protected monopoly granted to the USPS.

Joel Goodman

08-17-2011, 2:37 PM

Wow. I'm shocked. You didn't feel strange writing that a monopoly is "good" for customers? That goes against the grain of pretty much all economic thought.

I have to take this one up. There are times when a monopoly is called for. For example if you live in the city then you don't get to pick your sewer company -- nor should you. I'd even go so far as to defend the now defunct Bell Telephone. They invented (at Bell Labs) the transistor, laser, etc -- just about all the 20th century innovations in their field. I believe that telephone service pricing might be lower if we still had the regulated monopoly of Ma Bell -- I think prices came down because of technological improvements not market forces. Think about the fact that cell provider "A" has good service here and cell provider "B" has good service there -- if one integrated system was designed then all the towers would work in concert for better reception everywhere. Now we have ATT and Verizon with incompatible systems. Just my 2 cents!

Also there are many times when competition is a little bit of an illusion. I just travelled cross country by plane -- all the best priced nonstop airline tickets on Travelocity (for a given day) were within 15 dollars of each other -- no matter which carrier! With today's technology you don't need to sit in a smokey back room to fix prices -- the internet works well for that.

Dave Anderson NH

08-17-2011, 2:39 PM

When we speak about the allowed monopoly of the USPS and keeping Fedex and UPS out of the equation we have to consider a number of things. The fully private companies are profit oriented businesses. As such they will not provide any services they can not make a profit on delivering. Rural areas of the country and those with low population densities are not profitable and would end up not being served. Similarly any service that does not generate a profit would be dropped entirely and you would lose many classes of mail such as special book rate, etc. The postal service as a quasi-governmental entity is recognized by every foreign country as having the authority to negotiate reciprocity deals on mailing rates and regulations. Can you imagine the hassles of the private companies like UPS having to do the same on dozens of classes of mailables with 130+ countries? Again, the non-profitable destinations would not be served. As much as we complain about the postal service, we have one of the best in the world. They are by law doing things the private companies either can not do and in some case have no desire to do. Much would be lost if we allowed the private freight carriers to cherry pick those areas they want to service.

Eric DeSilva

08-17-2011, 2:46 PM

You are talking about what people used to call "natural monopolies." The idea that services--whether utility or telco--should be single provider doesn't get much acceptance in modern economics or policy debates. I also don't think you will find any economists, policy wonks or telecom experts who would agree that either prices would be lower in Judge Greene hadn't broken up Ma Bell or that cell phone service would be as good as it is today in the absence of competitive forces.

Darius Ferlas

08-17-2011, 3:42 PM

Wow. I'm shocked. You didn't feel strange writing that a monopoly is "good" for customers? That goes against the grain of pretty much all economic thought. And I'm also unclear on exactly what about the USPS monopoly is "alleged"? It is a statutory monopoly--there's no if and or but about it.

I used the word "alleged" because USPS is not really a monopoly. You can still send letters and packages using private service providers. I supplied their pricing list.

On a general note, I don't consider monopolies (USPS is not one of them) beneficial in general but in some cases they are either necessary, or the least harmful of possible evils. Examples are national governments, state funded military forces, oversight and allocation of radio frequencies, tobacco and alcohol control etc.

I'm also not sure your comparisons are head to head. If I google "fedex versus us postal service prices," I seem to come up with a lot of statistics and anecdotes going the other way. Here's an interesting one: http://reviews.ebay.com/Keeping-Shipping-Prices-Low-FEDEX-VS-USPS-VS-UPS_W0QQugidZ10000000004893434 That link also points out that the products are somewhat differentiated.

Fair enough, so I went to the USPS and Fedex websites. This is what I found out:
Overnight delivery, letter size envelope, 1/4 lbs weight:

USPS: $18.30 ($17.40 if you pay online)
Fedex: $22.89 to $60.89 (no online payment discount)

Both of the above based on a walk-in service (no carrier pickup), and both to residential address within the same Buffalo, NY ZIP code. You can easily verify that without having to rely on eBay take on things. Btw. eBay wouldn't be biased, would it?

But, let's get down to common sense brass tacks. If you think USPS is able to compete on its own, why have they fought so hard to oppose elimination of the postal monopoly? And, if you really believe your numbers and USPS underprices everyone else on all services (rather than figures gerrymandered to achieve a result), do you really think all the people using FedEx and UPS are just stupid? If you believe the monopoly makes no difference, then you are alleging that the market is competitive. If the market is competitive, explain why USPS is unsuccessful and FedEx and UPS are successful?

I have no need to believe anything about the prices. I always verify, as shown above.
I also never praised monopolies. That is what you think I wrote.

In some cases (large shipment volumes) Fedex or UPS might be cheaper, they may be offering some better delivery options and they have pickup from sender. Mind you, all those extra features are not exactly free.

I still think that USPS is one of the best values the US residents get.

Ken Fitzgerald

08-17-2011, 4:12 PM

I still think that USPS is one of the best values the US residents get.

Darius.....you and I have disagreed on a lot but we agree on that!

Eric DeSilva

08-17-2011, 4:23 PM

I used the word "alleged" because USPS is not really a monopoly. You can still send letters and packages using private service providers.

The USPS has a statutory monopoly under the Private Express Statute, and its core service--letter delivery--is protected from competition to this day. There is an exemption for priority mail delivery. I find it interesting that the areas exempted from the PES are the area you keep referring to in terms of prices--parcels and express mail. And, I continue to note that the services are not the same--among other things, my recollection is that USPS services do not have real time tracking.

I supplied their pricing list.

You have supplied comparative pricing for some services. I find it absurd to believe that people routinely pay UPS and FedEx if USPS is so consistent about underpricing them. You seem to have ignored the concept that if this is a competitive market and these products are fungible, your view would result in UPS and FedEx being bankrupt, not USPS. Besides, the whole point of this is that under the PES, no one can compete with the for First Class mail, so there is no possibility of a price comparison.

On a general note, I don't consider monopolies (USPS is not one of them) beneficial in general but in some cases they are either necessary, or the least harmful of possible evils. Examples are national governments, state funded military forces, oversight and allocation of radio frequencies, tobacco and alcohol control etc.

All of the functions you are quoting are intrinsically governmental functions. None of those has a marketplace dynamic, unlike delivery services, so none are applicable to the present issue. Frankly, what you should have cited was trademarks, copyrights and patents, which are the government granted monopolies that are generally conceded to be good. But the policy there is clear--government grants those monopolies in order to stimulate innovation. That doesn't apply to the postal service either.

I have no need to believe anything about the prices. I always verify, as shown above.

You hypothesize that the $0.44 charge for First Class Mail is a great deal. Because of the PES, you cannot verify that in a head to head price comparison. Frankly, if commercial providers rates for these services were higher, you might argue that there is a prima facie case the USPS is cross subsidizing those services from its monopoly revenues, which would imply their rates are supracompetitive.

I also never praised monopolies. That is what you think I wrote.

You wrote "USPS's alleged 'monopoly' is good for the customer." If you aren't saying that a postal monopoly is good for consumers, what did you mean?

Jim Heikes

08-17-2011, 6:25 PM

A quick story............in December 2010 I sent a check to purchase my 3520B...........the check was received March 20th..................'nuff said

Bruce Page

08-17-2011, 6:36 PM

A quick story............in December 2010 I sent a check to purchase my 3520B...........the check was received March 20th..................'nuff said
That can, and does happen with all of them. No system is perfect.

Ken Fitzgerald

08-17-2011, 6:45 PM

A quick story.....I wanted pay-it-forward on a gift given to me by the crazy turners here. I gave a Jet VS Mini to a Navy guy in Colorado Springs. I bought a double-walled cardboard box.....Lined it with plywood and screwed everything down.

FedEX destroyed the lathe. They did reimburse me for it after I provided proof of costs.

Point being.......there are bad stories about every company .....and yes the USPS......

Bonnie Campbell

08-17-2011, 10:35 PM

Dennis Peacock

08-18-2011, 7:15 PM

You mean that y'all are still frettin' and fussin' over this? :p :rolleyes: :D

Greg Peterson

08-18-2011, 10:45 PM

The fact that the USPS insists on maintaining its monopoly suggests to me that they feel the need to be protected from competitive forces, which would imply their rates are high.

What evidence do you have that the USPS insists on this arrangement?

The USPS is heavily regulated. By statute, the USPS is required to provide mail service to all Americans, regardless their location or the cost of providing the service. And at a uniform price. Doesn't sound like a monopoly to me. IOW, they don't make the rules.

Again, in 2006 congress mandated that the USPS have a fully funded, 75 year retirement plan, within in ten years, at a cost to the USPS of $55.5 billion. 75 years? Really? That seems to be a curiously long period. I would not be surprised if UPS and Fedex didn't have a hand in crafting that mandate. More than one way to eliminate competition.

And what is there to say that Fedex and UPS couldn't merge at one point in the future? Or engage in some collusion. There really isn't that much competition these days.

I like that the folks handling my mail are screened and have extensive back ground checks. I like waving and talking to my mail carrier. I like knowing that it will cost me .44 cents to mail a letter from anywhere in the US to anywhere in the US and that it will get there in three days.

Brian Elfert

08-19-2011, 7:37 AM

The problem I see with closing of post offices is I NEED mine. Where my home is I have to have a PO box. I can't get any home delivery from the USPS. But I'd still pick their services over the available alternatives.

I would expect some form of post office box will still be available for those areas with no mail delivery. The counter would be closed and no employees would be available. Perhaps the PO Boxes might get moved to a local business?

Curt Harms

08-19-2011, 7:44 AM

I like knowing that it will cost me .44 cents to mail a letter from anywhere in the US to anywhere in the US and that it will get there in three days.

I was exchanging correspondence with a business in Shrewsbury, NJ. a few years back. Shrewsbury is about 70 miles as the crow flies. A letter would take 3-5 days. If it was time sensitive, we used FedEx. First class from the West Coast was quicker and more predictable. True story.

Brian Elfert

08-19-2011, 7:52 AM

Hardly anybody pays full list price with Fedex or UPS if they have any sort of volume. Heck, even I have a Fedex account for those four overnight letters I sent last year. I don't recall if I got a discount or not. My understanding is the USPS can't give volume discounts. They can give discounts if the customer does some of the work like presorting or hauling the mail to the sorting facility directly. USPS did start giving discounted rates for Priority Mail this year through Ebay/Paypal.

Curt Harms

08-19-2011, 7:52 AM

I would expect some form of post office box will still be available for those areas with no mail delivery. The counter would be closed and no employees would be available. Perhaps the PO Boxes might get moved to a local business?
I wouldn't be surprised by that. Having the Post Office in the 'general store' is not unprecedented and in sparely populated areas probably makes a lot of sense. I'm surprised some facilities in my area haven't been targeted for closing. I just did a search for post offices within 10 miles of my front door. There are 25!! This is a pretty heavily populated area but it's not urban and most people drive, not walk. Do we really need 25 post offices in a 10 mile radius?

Scott Shepherd

08-19-2011, 8:24 AM

Matt Meiser

08-19-2011, 8:54 AM

Well, $2B "retail" value. Its the Federal government so they probably cost $6 billion :D (its a joke.) Seriously though, that assumes the cost of the "free" box isn't rolled into the cost of priority mail. Like someone else said above, the way they push Priority Mail, its got to be a money maker for them.

I still think the number of locations is way too high. I checked on Google Maps and there are 12 or 13 post offices in our mostly rural "bedroom community" county where the majority of people travel to neighboring counties to work. There are 4 or 5 more within a couple miles of the county lines. In a lot of cases those offices are only a few miles apart. Quite a few of those could be merged with very little impact on the public. I can't imagine much of an impact on our household if the mail only came say MWF. They could do MWF to 1/2 the routes 1 week, TR to the others, then switch the following week. They could also cut the ridiculous number of holidays that aren't observed by anyone but government and banks to keep deliveries more consistent. They could cut weekday hours to keep Saturday office hours. Lots of things they could do to result in savings that wouldn't have all that great an impact.

BTW, I stopped at a post office this week. To drop a package in the Fedex drop box out front. :rolleyes:

Brian Elfert

08-19-2011, 11:43 AM

I saw a commercial last night for them and I think the guy said they had shipped over 1 billion priority mail boxes. So, back to my original point......you gave away what would have been at least $2 billion dollars worth of boxes. I'm not sure I'd be bragging about that.

$2 billion could go a long way for them.

I don't know why you are so fixated on the "free" Priority Mail boxes. The USPS includes the cost of the box in the price of the service. There is no way it costs the USPS even close to $2 billion for those boxes.

U-Line sells the size boxes the USPS uses for between 27 and 56 cents for volumes of 1000+. The USPS certainly pays less since they buy way more than 1000 at a time. Probably 75% of all Priority Mail shipments I get use the USPS box. I bet a lot of shippers would reconsider their choice of shippers if the box wasn't included.

Edit: I just got a Priority Mail shipment today and it came in one of the "free" boxes.

Eric DeSilva

08-19-2011, 2:19 PM

What evidence do you have that the USPS insists on this arrangement?

The USPS is heavily regulated. By statute, the USPS is required to provide mail service to all Americans, regardless their location or the cost of providing the service. And at a uniform price. Doesn't sound like a monopoly to me. IOW, they don't make the rules.

Here's an easy reference: http://en.wikipedia.org/wiki/Private_Express_Statutes Note where it says "[t]oday the USPS is empowered to suspend the PES"--seems self-evident to me that the refusal to suspend = insisting on retaining the monopoly. The fact that they are heavily regulated doesn't make them not a monopoly--in fact, most monopolies are heavily regulated because competition does not constrain their pricing, terms or conditions of service.

Matt Meiser

08-19-2011, 2:59 PM

Google "American Letter Mail Company" or "Spooner vs US Postal System".

Greg Peterson

08-19-2011, 3:49 PM

Eric - The USPS was granted the authority to suspend the PES. That authority can just as easily be revoked. It isn't as if the USPS claimed that authority unilaterally, it was granted by congress. Given the choice. why would they suspend the PES? Especially since congress forced them to start cutting $5.5 billion out of their revenue each year for the next ten years.

You share the same, um, passion shall we say, for the mail man as that of my dog.

Eric DeSilva

08-20-2011, 9:21 AM

"Given the choice, why would they suspend the PES"? My point exactly. I think, however, you overstate the threat of Congress revoking the authority to suspend the PES. First, legislation is very difficult. Second, I don't think anyone who wants to be re-elected is going to affirmatively step in to protect a government monopoly. It would be political suicide.

I actually don't hate the USPS. I do not hate my mail carrier. I do hate the idea that they have proposed to eliminate a very large number of jobs in a bad economy (frankly, their ability to do that other than through attrition is likely to require modification of collective bargaining agreements, which I don't think is going to happen anyway). I also hate 3rd Class mail (the same way I hate telephone solicitations), and believe significant reforms should happen because I believe a lot of the USPS system is geared towards getting 3rd Class mail into my mailbox. Based upon history, I don't think there is much to love about monopolies--whether (for example) Ma Bell, CATV exclusive franchises, airline routes, or postal services. In all of those areas other than postal services, regulatory or judicial action has eliminated monopolies to the benefit of consumers. While people may have thought Ma Bell was providing good service for the money back in 1975 (as you hear people say today about the USPS $0.44 first class rate), I don't think there can be any argument that overall telecom rates have plummeted, the diversity of services has exploded, the innovation in the industry has increased, and consumers are better off.

My real core points are that: (i) history and economic theory, as well as contemporary policy thought, unambiguously decry monopolies as being anti-consumer and (ii) there is no way that, in the absence of actual First Class Mail competition, someone can declare that $0.44 is a good deal for customers because there is no direct basis for comparison. I've really only seen two good counterarguments--first, the USPS has a universal service obligation and, second, there may be transactional costs involved in multiple firms doing things like negotiating international reciprocity. However, the first objection can be dealt with through competitive bidding for routes, for example. There is no reason a subsidy automatically should go to the USPS. As far as the second, I'd just note that it hasn't posed a problem in the telecom space where multiple carriers negotiate hand-off agreements with non-US long distance carriers all the time.

Bonnie Campbell

08-20-2011, 9:29 AM

Greg Peterson

08-20-2011, 11:04 AM

Eric - good luck on stopping 3rd class mail. In case you have not figure it out by now, I am not a legal analyst. That said, IMO, it seems reasonable that 3rd class mail is protected speech.

I am a rare breed these days, in that I do not own or use a cellphone. I have a single land line serving my residence. My two primary reasons are privacy and cost. If I am not in my house I could not care less if someone can get a hold of me (provided I am not at work). Also, my land line service is cheaper than a cellphone service plan, which typically requires a two year commitment. There are countless telecom products available. But I don't see any evidence that this has driven down the cost to consumers.

Laying off 120,000 workers is a miserable option in this case. However, were it a matter of simply moving those workers over to India or China, my 401k would be very, very happy.

As stated previously, bidding for routes would be skewed. Who wants one they'd show no profit? It would end up being like the phone companies. People in rural areas get worse service than the profitable urban areas. Equipment isn't up to date at all. Some mail delivery company might come in and agree to deliver rural mail. Sure why not. Then all of a sudden they'd decide something like two days of delivering is all the area can support for them to profit.

I think we can all appreciate the double edge sword that is the USPS. Trying to open up mail service to the private sector would present some interesting consequences, some not so pleasant.

I would like to hear how the private sector could compete while maintaining the service obligation the USPS current operates under.

Eric DeSilva

08-21-2011, 10:39 AM

Probably time to let this thread die, but just as a quick counterpoint... No one bids on a route where they make no money. I was actually talking about a reverse auction "bidding" for the lowest subsidy to serve a route--frankly tho', I think we as a society might be better off with moving government "correspondence" to email and subsidizing broadband services more heavily. Having dealt with a lot of rural telephone companies, I would also note that between REA and USF, a lot of the cooperative rural telecos provide phenomenal service to their constituents, just as rural electric coops do. Back in the day, the rural telcos I looked at were offering things like DSL far earlier than I could get it--and I was in a major metro (DC). It is a much more local to local business proposition, and there are huge low cost loans and subsidies for serving rural areas.

Greg Peterson

08-21-2011, 12:09 PM

I get to pay a nice little tax on my phone service to help subsidize rural phone service. Doesn't strike me as fair.

I would be 100% on board with a nationlized broadband service. Look what the interstate hiway system did for the economy. And I would wager dollars to donuts that it could be delivered for less than Comcast could deliver it.

No bidding on routes, reverse or otherwise. UPS or FedEx would have to service all routes, six days a week just like the USPS. The service would have to be seamless and transparent to the consumer.

Matt Meiser

08-21-2011, 12:10 PM

Eric is exactly right on the telcos. Our first house we were served by "Deerfield Farmers Telephone Company." When we moved there in 2000, I was worried about what we could internet-wise. They set me up with a second phone line, which consistently got 53K connections to their ISP subsidiary because there was fiber to the curb. The phone ran across coax to the house which also provided cable TV from their cable subsidiary.. 4 months or so later they disconnected my second line and I got a cable modem instead. 11 years later, we still don't have anything besides lously phone service available at our current house which is served by Frontier now, but was Verizon up to about a year ago. Frontier is looking at finally getting us DSL but the date keeps slipping.

Ernie Miller

08-21-2011, 12:42 PM

I get to pay a nice little tax on my phone service to help subsidize rural phone service. Doesn't strike me as fair.

Respectfully, I don't understand this thinking. Phone service is as important to people in rural areas as it is to those in more populated areas. It costs x amount of dollars to provide phone service to an area and that cost is divided amongst all of the residents. Some end up with a better deal than others - so what? I don't have any kids of school age, but my taxes support the public schools. Is that fair? I think so. My kids benefited from having good schools when they were of age, and someone else helped to defray the costs. Now it's my turn to return the favor. That's what living in a society is all about. Sometimes we are helped directly by these "subsidizes" and sometimes we're not. Or is it a subsidy when someone else benefits and a expected right when we benefit?

Greg Peterson

08-21-2011, 3:21 PM

That's what living in a society is all about. Sometimes we are helped directly by these "subsidizes" and sometimes we're not. Or is it a subsidy when someone else benefits and a expected right when we benefit?

This same view could be applied to any number of cases. I agree with the former and the latter seems to be the mantra of the vocal minority.

Ernie Miller

08-21-2011, 3:33 PM

This same view could be applied to any number of cases. I agree with the former and the latter seems to be the mantra of the vocal minority.

You can't have it both ways!

Greg Peterson

08-21-2011, 10:02 PM

You can't have it both ways!

Sure I can. Everyone else does.

Ernie Miller

08-21-2011, 10:09 PM

Sure I can. Everyone else does.

Bingo - there's the problem.

Larry Edgerton

08-22-2011, 5:54 AM

My own take on this is that of all of the government agencies, the USPS is about the only one that is of use to me.

I pay a lot in taxes, fees, unemployment, licences,etc.etc.every year for both myself and my employees, and I have a hard time finding anything of use that comes out of all of those dollars. In fact quite the opposite is true, for the most part the government does everything they can to make doing business more difficult with the dollars they recieve from me.

Now, I do get to use the kings hiways, but for that I pay another tax.

No, at the Post Office I feel that I am getting more than I am paying for. It is the one government agency that works, and I hope that congress keeps their nose out of it, because that is sure to throw a wrench in the works.

So, if you are a postal employee, thank you very much.

Larry

John Shuk

08-22-2011, 8:59 AM

As stated previously, bidding for routes would be skewed. Who wants one they'd show no profit? It would end up being like the phone companies. People in rural areas get worse service than the profitable urban areas. Equipment isn't up to date at all. Some mail delivery company might come in and agree to deliver rural mail. Sure why not. Then all of a sudden they'd decide something like two days of delivering is all the area can support for them to profit.

Dead accurate. The companies that have been buying up the less profitable rural lines from the larger phone companies are not up to the challenge. In many areas people are stuck with new lows in service for which there is little remedy due to a lack of profitability. People deride the Universal Service Fee that shows up on the bill but rural networks have little ability to stand on their own.
What is our Postal Service but a large network? The rural and remote offices are really the point of the whole things existence.

Brian Elfert

08-22-2011, 9:04 AM

Until some new form of electronic messaging comes along that is secure and unhackable nothing will replace first class letters from most government agencies. The IRS is very clear they will never contact taxpayers via email. How many times have criminals sent out email seemingly from the IRS that asks for your Social Security number and/or your bank account number?

I could easily send out an email that claims to be from president@whitehouse.gov and some poeple would think it really came from Obama.

Greg Peterson

08-22-2011, 10:01 AM

I agree that the USPS is just fine the way it is. But congress is in charge of it. Here in Oregon, all of our elections are vote by mail. I sure wouldn't want an person of obvious character flaws handling my mail. But I wouldn't put it pass this congress to gerrymander USPS regulations to end this for us.

Ted Wong

08-22-2011, 9:58 PM

+2 on using USPS for small packages. Way better bargain and service than UPS. I agree there is plenty of blame to go around and no one is really at fault. Unions doing their best to maintain a decent living for employees and management doing there best to keep operations running.

Marvin Hasenak

08-25-2011, 2:36 AM

The post office is controlled by Congress and is not allowed to make a profit. It has years of losses and years of profit, that should even out over time equal to zero.

The UPS employees actually make more than the USPS employees.

To understand how the post office is financially controlled by Congress read up about the Postal Reorganization Act of 1970 or 1971, not sure on that year.

UPS can change prices as needed for fuel and labor increases, while the USPS has to get approval by, which can take up to a year, during which time the post office is losing money. The USPS delivers a letter for 44 cents, doesn't matter if it is across the street or across the country, it is the same price, try that with UPS, they charge by distance. They are also required to deliver to everybody, regardless of how remote they are. What does UPS do for these remote places, they pay the postage and mail it. Fed Ex and UPS both use the postal service to cut their delivery costs, the post office cannot do that, they have to deliver it, even to that remote ranch house out by Big Bend National Park, one package mailed by UPS, and the carrier has to drive almost 50 miles to get there, UPS paid abut $%, the post office used up about 2 hours in labor and a 100 miles in expense.

Dave Lehnert

08-25-2011, 11:00 AM

I have been told that an experienced UPS driver can make 90K a year.

One thing about UPS, The driver is always on the run. You never see them just sitting.

Andrew Pitonyak

08-25-2011, 3:12 PM

I used to use the USPS for most things, but I have had a few very bad experiences at local post offices. For example, complaining that I had already affixed postage, they stated that they could not accept a package unless they watched me apply the postage to make sure that I was not using stamps that had already been affixed to something else.

Has anyone here had USPS honor an insurance claim? I have never lost a package with USPS. When a package disappeared with UPS, they showed a signature of a person that did not work at the receiving location and then refused to honor it. I am concerned that the USPS may be as bad or worse based on knowing two people that have been injured by USPS employees (they were hit by a USPS truck) and then the USPS flat out refused to cover it. Last I heard, there is a law suite filed on behalf of injured parties with expenses, at least one doctor's office, and two insurance companies.

I usually have decent luck with fast delivery, but, one package that I shipped second day with insurance and tracking, took more than one week to arrive. First class letters to similar addresses arrived the next day. I had to go down to the USPS office and have them check the package location. They flat out asked me what my problem was.... After all, the package had finally arrived at the destination post office after more than one week and was out for delivery that day. It was very strange. I have heard rumors that you can now track packages on the web from the USPS, but last I tried, that was not the case. Can anyone verify that. If I really want to track it, I have always used either Fed Ex or UPS simply because it is so easy for me to track. Sometimes it is more expensive, sometimes less. I no longer ship sufficient packages to track that carefully.

Over-all, I can say that the USPS probably has a better track record with letters than I see with email. In other words, they seem to do a pretty good job over all, I just do not expect anything like good (or fast) service, and I am skeptical that their insurance (or pretty much anyone's) will be honored.

John Shuk

08-27-2011, 9:32 AM

I have been told that an experienced UPS driver can make 90K a year.

One thing about UPS, The driver is always on the run. You never see them just sitting.
My former boss was pretty high up at UPS. He told me that at UPS EVERYBODY gets their butts busted from the very bottom to the top. He also told me that they used golden handcuffs to keep you there and putting up with it.

Brian Elfert

08-27-2011, 10:14 AM

I have a package arrive that came through the USPS that was insured. The contents had been stolen. It was obvious that the package had been cut open and then retaped. The new tape went over the postage label. I contacted the USPS through their online claims process and attached some photos and original receipt. The only issue was I was told to go to the Post Office to file a claim and once there I was told it had to be done online.

I was shocked that I got a check in the mail about 7 business days later. They never contacted me at all and didn't try to deny the claim.

Mike Henderson

08-27-2011, 11:06 AM

Jason Roehl

08-27-2011, 1:18 PM

If insurance weren't a moneymaker, it wouldn't be available, whether it's for a package, your health, auto, home, etc. Used wisely, insurance is a hedge against catastrophic loss. Used blindly or across-the-board, and it simply lines the pockets of someone else.

Ken Fitzgerald

08-27-2011, 1:35 PM

Insurance with USPS or any company is a money maker.

I am friends with the folks at Fedex as their airport office is close to my home and before retiring in a typical week I could be in their office 3-10 times a week depending on the circumstances. The number of times they lost a package or damaged a package coming to me or shipped by me in the last 20+years you could count on both hands. I received and shipped hundreds of packages annually with them.......and yet....here at the Creek...when I paid forward to another Creeker the original lathe given to me by the turners here.....it was demolished. Thankfully I'd insured it. Once I provided proof of original cost of the contents, they reimbursed me at the rate that it cost me to replace them...and the Creeker ended up with a new better lathe.

Jon Lanier

08-27-2011, 1:43 PM

I have said this until I'm blue in the face. Sell advertising on the stamps! You could bring down the cost of a stamp back to .25.

Darrin Vanden Bosch

08-29-2011, 7:43 AM

What they need to do is charge all those doing bulk rate mailing at least half of what they charge us to mail something. This will take care of two things, first it will increase revenue and it will reduce the amount of junk you get in the mail.

Jason Roehl

08-29-2011, 8:30 AM

That's not necessarily true, Darrin. Raising the price on bulk mail will price at least some of the companies doing it out of the market or drive them to alternatives. If it prices too many bulk mailers out of the market, revenues for the USPS would actually drop, and we're back to the layoffs. Due to the bulk mail being the overwhelming volume of mail that the USPS handles, 1st class service enjoys some economies of scale.

alan whitehead

08-29-2011, 9:20 AM

Dan Hintz

08-29-2011, 10:00 AM

The Post Office will probably disappear in 15 or 20 years due to technology advancements. They will go the same path as the milkman delivery service. People say, you had delivery at home ? People one day will say, they delivered mail to your home. Wow.
I believe this about as much as the people who claimed 20 years ago "We'll have a paperless office in five years or less." Uh huh. I think many offices use more paper now... printing out emails for backup or to show their office mates, more forms to fill out for HR that have to be faxed, etc.

Greg Peterson

08-29-2011, 10:02 AM

My former boss was pretty high up at UPS. He told me that at UPS EVERYBODY gets their butts busted from the very bottom to the top. He also told me that they used golden handcuffs to keep you there and putting up with it.

The stories I have heard from friends and family that work at UPS lead me to understand there is a very robust distrust between management and the union. Not to worry though. The days of great employee benefits are numbered as new hires do not receive the same benefits as the folks that were there long before the IPO.

Driving for UPS is a good job certainly. But there are quite a few people working just as hard, if not harder behind the scenes, for every driver.

Joe Pelonio

08-29-2011, 10:07 PM

I believe this about as much as the people who claimed 20 years ago "We'll have a paperless office in five years or less." Uh huh. I think many offices use more paper now... printing out emails for backup or to show their office mates, more forms to fill out for HR that have to be faxed, etc.
I have to agree, with many banks of paper files to be maintained at my daytime job office. We send out tons
(literally) of paper for recycling. Oh, and we recently canceled our milkman because we don't use as much anymore but they still deliver to the neighborhood. As for the USPS, I'm not in any hurry to get the junk mail so
if they get slower I'm not at all bothered.

http://www.smithbrothersfarms.com/delivery/

Marvin Hasenak

08-30-2011, 2:39 AM

The post office will be here as long as we are a country, because it is required by the Constitution. An Amendment would be required to get rid of it.

Dan Hintz

08-30-2011, 5:59 AM

The post office will be here as long as we are a country, because it is required by the Constitution. An Amendment would be required to get rid of it.
It is not required, it is allowed by the Constitution... pretty large difference. No amendment would be required if Congress decided we no longer needed to support the myriad of offices across the nation.

Greg Peterson

08-30-2011, 10:01 AM

"The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To establish post offices and post roads;"

This clause clearly granted congress the authority to setup a postal service, or at least the infrastructure. No other authority is granted. To establish. They did that.

But what they did do back in 2006 was to force the USPS to start coughing up $5 billion dollars a year so as to establish 75 year retirement fund. And it is this obligation that is the real problem for the USPS.

Mike Henderson

08-30-2011, 10:21 AM

Charlie Reals

08-30-2011, 11:23 AM

[QUOTE=Mike Henderson;1767455]I get Business Week magazine. Recently, the paper delivery guy started delivering it to me. So in this area, they have already started using an alternative to the post office.[/QUOTE

In the 30's my grandfather delivered mail,newspaper and moonshine on the same rural Alabama route.

Phil Thien

08-30-2011, 10:38 PM

In the 30's my grandfather delivered ...moonshine...

I had no idea they delivered that.

Charlie Reals

08-31-2011, 7:16 AM

I had no idea they delivered that.
I guess it was delivered without a stamp , it was always postage due lol

Dan Hintz

08-31-2011, 11:05 AM

I guess it was delivered without a stamp , it was always postage due lol
Did they mark the fill line to make sure the delivery person wasn't sampling along his route? ;)

Charlie Reals

08-31-2011, 7:02 PM

Did they mark the fill line to make sure the delivery person wasn't sampling along his route? ;)

I asked him about that and all I got was a:). The truly funny thing is he was a Baptist minister when he was doing this.I kidded him about it and was told he had to do what was needed to feed his family.

Greg Peterson

09-05-2011, 12:33 PM

Here's some of the nuts and bolts of the USPS financial problems (http://www.golocalprov.com/politics/bad-accounting-equals-bad-policy/). As usual, the meme making the rounds lacks the pertinent details.

Joel Goodman

09-05-2011, 1:12 PM

Steve Griffin

09-05-2011, 1:50 PM

Why does the USPS need to be self supporting? Isn't postal service one of those things that a country has like police, armed forces etc. - just part of being a country. When I see how expensive my cell phone service is -- dropped calls, dead spots etc. I shudder at the thought of more things being privatized. Rant finished!

As much as it warms my heart to know my tax dollars are subsidizing the junk mail I get 6 days a week, I'll have to point out that the post office is not as important as police and armed forces.

Privatization is not a good idea for everything, but it's about 100 years overdue for the postal service.

Greg Peterson

09-05-2011, 3:09 PM

None of your tax dollars goes to the USPS.

Eric DeSilva

09-06-2011, 9:26 AM

None of your tax dollars goes to the USPS.

I think Steve was answering Joel, and the quoted passage from Joel was questioning why USPS doesn't get tax dollars.

As far as the claim that somehow USPS is being required to fund some extraordinary future retirement benefit, I'm not sure that is the way I read it. See http://www.prc.gov/Docs/63/63987/Retiree%20Health%20Fund%20Study_109.pdf. Private companies operate under GAAP was well, and it seems not unfair to require that the USPS fund its pension fund with the same kind of assumptions relative to increasing medical costs that private companies use. Failing to do so would mean, if I'm interpreting correctly, not having sufficient future reserves to meet expected pension benefits, much like the existing Social Security nightmare. Given that liability would likely fall on the taxpayers, I'm not sure I disagree with the law forcing them to use GAAP for future pension liability.

Greg Peterson

09-06-2011, 10:34 PM

Steve was claiming he gets all warm and fuzzy knowing his tax dollars subsidize the junk mail he receives six days a week. I was merely setting the record straight.

As for whether or not we need a postal service, I say absolutely yes. But with the trend these days to throw the whole thing out because it isn't perfect, the ambivalence toward the USPS is not surprising.

The USPS is being required to create a fund that won't have to begin paying out for decades. It is a problem certainly, but not insurmountable. The way this mandate was implemented was ham fisted at best and certainly was not GAAP.

Eric DeSilva

09-07-2011, 11:27 AM

As I read things, OPEB comes from GASB, which is responsible for GAAP. So what if the liabilities don't get paid for decades. You could make the same argument that because Social Security liabilities don't get paid for decades that we can ignore them. We know where that leads.

Greg Peterson

09-07-2011, 9:14 PM

We'll have to agree to disagree.

Brian Elfert

09-08-2011, 12:40 PM

The USPS is being required to cover approximately 75 years worth of retiree health benefits over a 10 year period. The federal government doesn't have this burden nor do public or private companies who offer retiree health benefits. Money is typically allocated to pay retiree health benefits in the year in which the benefits are paid. Retiree health care usually doesn't have a fund like a pension.

Congress is using this money from the USPS to lower the deficit so they don't want to reduce or eliminate the payments.

David Weaver

09-08-2011, 2:28 PM

I don't know the history of that act, but there must be a reason that they are forced to set aside cash for future benefit accruals. Probably because they are contractually obligated to provide the benefits and have no reasonable expectation of getting out of them. A non-contracted corporate retiree health benefit is generally not funded in cash, but the company is required to recognize the total future unfunded expected liability on the books (on its balance sheet) for the plan as written, even if future trend in costs makes it so that the sponsor would never actually offer benefits at levels they are projected to reach.

The trend in the corporate world is for those benefits to disappear, I think partially due to current cash requirements, but much more so because you can wipe out balance sheet liability and amortize the effect through the income statement if you cut benefits. In my opinion, that's wrong (the accounting requirements, not the right to eliminate non-contract benefits). It encourages behavior that goes only one way (cuts), to make the books look better.

But, anyway, there must've been a demographic study of what the retiree medical benefits would be for the postal service, and the projections scary enough at the time to make someone believe that the post office would have no chance of meeting those obligations (I don't know how their contract works, but contractual terms are a lot more sticky then general non-union non-contracted corporate benefits), and still have no flexibility to get out of them.

Stuff I have floating around suggests that as soon as there is wiggle room, the state and local (public employers) trends are going toward trying to tie benefits for employees (and risks, which is the big poorly understood factor - not just the level of benefits, but the volatility of the level) to the working lifetime of the employee that receives them. The accounting rules are already headed that way, public and quasi public cash requirements I'm not that familiar with. I used the term intergenerational inequity here for something similar to this and got chewed out, but it is true intergenerational inequity when a current working population is forced to take on funding the liabilities and holding the bag for the volatility of those liabilities to benefit a group of people who have zero chance of bringing in any revenue. And you can hardly understate the leverage that volatility can create, regardless of the funded level for the benefits when a future recipient leaves the workforce.

As new funding and accounting rules come out over the next several years, I think we're going to see a lot less generous benefits, and I hope (but I doubt) some changes in the way benefits that are not contractually obligated are reflected on the books of private employers. If there aren't some changes in what can be provided and how it's booked, there just won't be those benefits for retirees.

But, to this topic, if the USPS absolutely can't cope with funding (on an interest discounted basis, right?) future benefits with the employees who will receive them, then they probably need to sit down and renegotiate what those benefits are.

Eric DeSilva

09-08-2011, 2:56 PM

If anyone really wants to read about what is going on, try this Congressional Research Service report: http://www.fas.org/sgp/crs/misc/R40983.pdf starting at p. 7. For the GAO view on the accounting practice change, look at this Comptroller letter: http://www.gao.gov/new.items/d02916r.pdf. As usual, the rhetoric seems to be overstated--even the the Postal Rate Commission thinks they should ante up $3.4B/year, so the real question isn't $5.4B or zero, its $5.4B or $3.4B. Notably, the liability in 2009 was reduced from $5.4B to $1.4B by an act of Congress, so they haven't met the funding requirement before and you could argue that even if the right peg was the PRC's $3.4B/year, they are already $2B behind. While the USPS says this is an extraordinary requirement public and private companies aren't required to meet, that seems like a half-truth -- the reason it is being done is because the USPS is supposed to be self-funding, unlike other gov't agencies and, if I read correctly, whether private companies do this or not depends upon certain accounting guidelines and the GAO determined that the USPS fell on the wrong side of an accounting principle.

John Hemenway

09-16-2011, 12:21 PM

Anyone see 'Colbert Report' a couple of nights ago? He talks about the USPS. To paraphrase, 'So the USPS is controlled by Congress but receives no money from them. They should be like Halliburton, tons of money from Congress and no control'

It would be funny if it weren't so true.

Brian Elfert

09-16-2011, 8:20 PM

It seems like about every other day we see another news story about the USPS problems. It pains me to see how many people comment on these stories and say the USPS should just go away and that they don't need it. I think it still serves a useful function, but fundamental reform needs to take place. Union work rules would be a good start. We hear all the time about postal workers filing grievances because a member of management or another union worker moved a cart and it isn't in that person's jurisdiction. Am I really taking away your job by pushing a cart out of the way?

There is a huge industry worth billions of dollars that is dependent on the USPS. Direct mail advertising obviously nets a positive return or the advertisers wouldn't do it. If the USPS goes away so do a million or more jobs. It is highly unlikely another package delivery service would do the same work for the same cost. Some advertisers may hire private drivers to deliver, but it has to cost more if each company has to have a fleet of drivers.

Brian Elfert

09-18-2011, 11:11 AM

Another thing about the Post Office that gets me is all the complaints about closing rural Post Offices. In one case they closed a Post Office and moved the PO boxes and basic functions to a local store. Residents have to go to a full service Post Office in another town to mail packages without postage and such. Oh gee, they have to drive FOUR whole miles to another Post Office.

I live in a large metro area. My Post Office serves 30,000 or more people. I have to drive at least four miles just to go pick up anything at the office. That office is only the Postal annex and I have to drive another 1/2 mile to the retail post Office if I need any services. Do I complain? No, but rural people can't be bothered to drive 4 miles to another town for Postal services. Most of them live in small enough towns that they drive long round trips once a week to do their weekly shopping.

Ernie Miller

09-18-2011, 11:23 AM

Bonnie Campbell

09-18-2011, 11:30 AM

Charlie Reals

09-18-2011, 11:39 AM

There are four USPS offices in a 14 mile stretch of Highway 4 from Arnold to Murphy's Ca. Kinda redundant. None closing, empty boxes at the two bigger offices.

Brian Elfert

09-18-2011, 12:06 PM

The closest Oregon towns to me are approximately 20 miles either direction in the state. The 'closest' town would be in Washington state. Unless they could allow us to keep our Oregon address (my case PO box), then we'd end up getting taxed as Washington residents. Oregon and Washington state politics don't get along already lol

There are plenty of cases were the same Post Office services multiple zip codes for multiple cities. My local Post Offices serves at least two cities and each city has their own zip code. I'm fairly certain no state would be able to tax you simply based on your postal address. If you physically lived in another state year round it would be hard to claim you as a resident. I can't believe a court would side with the State of Washington if it went to court.

Your city may still be large enough to justify a full service Post Office. If not, perhaps Postal services could move into a local store and still offer most services. There is no reason a local store couldn't do 95% of what a full service Post Office offers at a lower cost. We have store locally that offer many Post Office functions at their customer service counter while using maybe 20 square feet of space. To offer PO Boxes and 95% of the services would certainly require more space.