Is the Post Office trying to go out of business?

[Brian Elfert]

The USPS's latest plan is to no longer deliver ANY first class mail overnight. Instead of a goal of one to three day delivery the goal will now be two to three days. Stupid, stupid, stupid! You're losing money so you make the service worse so less people will use it? This doesn't require congressional approval.

They plan to close half of their distribution centers and move mail further distances. Apparently they haven't looked at the sky high price of diesel and the fact that diesel prices will probably continue to climb.

I wonder if newspapers will still be delivered the same day they are printed? If newspapers are no longer delivered same day my employer could lose up to 20% of their business probably costing me my job. My employer also delivers an advertising product via bulk mail, but we will start delivering it ourselves to save over $1 million a year.

[Greg Peterson]

They are forced to cut costs because congress mandated that the US Postal service create a $75 billion dollar retirement fund in ten years.

[Brian Elfert]

Sure, cut costs, but cut them the right way. Don't take the product most used by your customers on the street and make the service worse. They should be looking at how to make service faster, not slower. Amazon uses first class mail to deliver a lot of stuff. How much business does the USPS lose when Amazon chooses another carrier that hasn't lengthened delivery times by a day?

How many rural folks are going to be upset when they find out their daily newspaper won't be coming anymore? Right now, newspapers truck newspapers to major post offices all over their delivery region and the newspaper get delivered the same day. This doesn't affect newspaper customers in urban areas as carrier deliver those papers.

Why aren't they reducing expensive health benefits and eliminating pensions and retiree health care like private employers instead of cutting services?

[David Weaver]

They're not reducing contracts because they're just that, contracted benefits. Private employers who have contracts are also not cutting benefits until at least they are at the end of a contract period. And even then, quite a few haven't done a lot to cut benefits, aside from the standard deductible and copay changes in health care plans, and maybe participant contributions.

The PO is likely cutting the overnight service because it's a money loser. If they're losing money and can't charge more (like a private service would do), then it doesn't make a lot of sense for them to do anything other than what they're doing. People who can't get newspapers from them on time should either read the news a day late or subscribe to a newspaper's online edition.

I don't use overnight mail, and I certainly don't want to pay more for a less costly service so that overnight mail users can get a subsidized product.

The underlying issue with nearly all of the benefits out there is the combination of forcing folks to retirement early, and especially the poor market returns in the last 10 years. The first would've been something that could be overcome, but the second is not. The trusts the benefits are in generally are probably expected to earn several times per year what the contributions made to them should be. Over the last 10 years, they've essentially returned nothing.

I nearly forgot, the third piece of the puzzle is lower revenue and less use of services.

The way congress runs everything else, I sure don't want them to have influence on every single thing the postal service does or it'll be dead as a doornail in a year. And then we'll really find out how much a private service like UPS would charge - compare small package prices and international rates to get an idea of how that would go.

[Joe Pelonio]

The solution to the USPS budget problems is to eliminate the bulk postage rates, which would increase revenue from advertisers and at the same time reduce the amount of junk mail that we all have to throw away or recycle every day. If advertisers switched back to newspapers it would then help them survive. We get a daily paper plus the Sunday NY times delivered to the house and while I check the news on the android every morning while on the bus to my daytime job I really enjoy reading a real paper on the weekends.

[Greg Peterson]

Ah, the irony of it makes me grin. After the postal service has been dissolved and the private carriers have cherry picked the service areas, I'm sure there will be a lot of unhappy rural residents. I'm confident that the private carriers will not have the onerous obligation to provide delivery service to every location for the same flat fee.

See page 21 of the USPS Financials (http://about.usps.com/publications/annual-report-comprehensive-statement-2011/annual-report-comprehensive-statement-2011.pdf). You will note that retiree health benefits are 25% of what they were just four years ago in 2007. And operating expenses are down 12.5% in the same period. The USPS could set aside close to $10 billion each year to fund retirements for workers not yet born and still meet current obligations. But that is not the cards congress dealt them.

[Brian Elfert]

I work for a private company and my pension benefit was frozen at the end of 2009. I also lost my 401k match for several years. Further, I have had no pay raise since 2007 and may not see one until 2014 or 2015 the way things are going. My employer filed chapter 11 bankruptcy in 2009 and was able to get the bankruptcy court to change union contracts to get rid of their pensions. Could the USPS file bankruptcy to get their house in order and change the union contracts?

How is it costing anything extra to deliver 1st class mail overnight? Currently, if I mail something first class one zip code over it shows up the next day 99% of the time. From what I read of the new plan if I mail something to the next zip code it will NEVER get delivered overnight. Even UPS ground will get a package delivered overnight within the same metro area and usually within the same state overnight.

[Brian Elfert]

I would rather have them keep Saturday delivery and still deliver 1st class mail with a 1 to 3 day goal and just increase postage to 50 cents or something to cover the cost.

Doesn't the USPS make more money (or lose less) on bulk rate mail than they make/lose on 1st class mail?? Yes, they charge less for bulk mail, but the work done by the mailer makes it cost the USPS less money which is why rates are so low.

[Zach England]

Wonder if fedex will accept those "forever stamps"...

[Greg Peterson]

Congress placed an onerous and unrealistic mandate on the USPS.The USPS isn't a for profit entity, it has been a self funded operation for several decades now. Fedex and UPS have to generate a profit. Running a route that has a fraction of a percentage of the density of a urban route doesn't make sense to the bottom line. I Wonder if Fedex will deliver to rural locations? And if so, will people be willing to pay the non-subsidized rate?

Another factor that needs to be taken into account are the pension fund managers that may have very well invested in all those AAA rated funds that were toxic. Declining, diminished or negative returns on pension funds is just one of the ramifications of the mortgage scam that has yet to put one single person behind bars let alone even indict anyone.

[glenn bradley]

The amazing business sense of the US government aside, this is a spiral that kills many a good business. Profits are down so you cut corners in the wrong places. Take less money home, cut fat and expect more from your staff but never, never cut service as a way to correct a loss of business. You will accomplish the opposite. If you want to pursue that business model as a potential solution, reduce the suffering; just quit now.

[jared herbert]

I was a subscriber to the des moines register for over 30 years. the post office closed one of its sorting centers in the state so I did not get the paper until it was a day late, making it useless. I then switched to a pay to read online edition but it is so cumbersome and difficult to use I think I will not renew it. so in the end everybody loses, the usps, the newspaper and me the subscriber. I would gladly pay a few cents more per week to have things continue the way they were.

[Dave Lehnert]

The business of the USPS is down because of E-mail and on-line bill pay. They could come to your door to pick up a letter and drive it straight to the address for free. People still won't use the Post Office. On-line is still faster and free. At work we use to send out baskets of mail a day. Lucky to have a letter or two before we closed.
It's tough if you are in business and things are down. yes, How do you expect to increase business by cutting. but if you don't have the money what can you do.

[Greg Peterson]

There are many reasons why business is down for the USPS. Personally, I am uncomfortable receiving email correspondence from my bank. A letter still has a degree of authenticity the electronic version will struggle to match.

I do think their rates are too low. The first class letter rate is a bargain no matter how you slice it.

As for cutting or eliminating contractual obligations, this certainly seems to be in vogue so long as it is the other guy's benefits being affected.

I don't imagine it should be very long and we will have minimum wage or contracted workers hand delivering our mail. Some folks may not object to a convicted felon or worse visiting their home every day, every other day, or whatever schedule they decide to offer. I prefer to have someone vetted handling my mail.

And what is to come of that nice little $60 billion nest egg the USPS will have created?

[Joe Pelonio]

I don't imagine it should be very long and we will have minimum wage or contracted workers hand delivering our mail. Some folks may not object to a convicted felon or worse visiting their home every day, every other day, or whatever schedule they decide to offer. I prefer to have someone vetted handling my mail.


Back when they used to come to the door and leave it on a box on the porch I'd be more worried about the background of the carrier coming to my house. Now that they simply drive up to a grouping of boxes on the street, the biggest concern is whether they might pinch a check or credit card, so there would have to be some process to investigate even private contractors. I wonder how much we can trust Fedex, UPS and DHL employees?

[Greg Peterson]

Back when they used to come to the door and leave it on a box on the porch I'd be more worried about the background of the carrier coming to my house. Now that they simply drive up to a grouping of boxes on the street, the biggest concern is whether they might pinch a check or credit card, so there would have to be some process to investigate even private contractors. I wonder how much we can trust Fedex, UPS and DHL employees?

In my area (greater metropolitan area that is), the carrier still delivers to the front door. On Saturdays my shop doors are open and the living room is on display for anyone that ventures to the front door. I chat briefly with the carrier, not so long as to detain her, but just a friendly show of appreciation. Even if it is just bills she is delivering. I like knowing they are walking the neighborhood, passively observing as they stroll from house to house. And I do not worry that they may spy something in my shop or home that they may want to get a closer look at when I'm not home. It isn't as if they don't know the hours most of us keep. They know a lot about their customers.

We've had a number of retired letter carriers work for us and without exception all have been marvelous workers and very friendly. It may simply be the luck of the draw. In all, my personal experience with them has been extremely positive. And the service the USPS provides is great, IMO.

The concerns directed at the USPS are little more than displaced aggravation. Certainly the funding of their retirement program is a major concern. But the mandate passed by congress seems more likely designed to ensure the demise of the USPS rather than be its salvation.

And it will be interesting to see what happens to the money they have already deposited into the fund.

[Curt Harms]

What is USPS eliminating? I thought it was just the "next-day" services, e.g. the service competing with FedEx & UPS red. I sent something via USPS next-day service to an off-the-beaten-path place. It got there several days later, so much for "next-day". The 2006 congressional mandate is indeed curious.