It costs 45 cents to mail a first class letter next door. And it costs 45 cents to mail a letter from New York to Los Angeles.
Is this the reason why the US Postal Service is dying?
Clearly, no private business would have such a stupid business model. The price of the product — delivering a first class letter to a specific address — should reflect how much it actually costs to pick up, sort, collate, transport, and deliver the product to where it is addressed. This would mean paying less for some letters, more for others.
But Congress, who oversees the Postal Service, has never seriously entertained allowing the USPS to alter its delivery model, nor deal with the myriad of other problems that led to the USPS losing more than $6 billion over the last two quarters.
The Postal Service gets no money from taxpayers and must survive on postal fees alone. With a 30% decline in first class mail delivery over the last 5 years, the situation has become so dire that USPS brass has recommended drastic cuts in services and employees. The cuts include closing 3,700 mostly rural post offices, cutting 150,000 from the workforce, eliminating Saturday delivery, and reforming the massive health and pension costs associated with current and retired workers.
But there are some who believe that these cuts, rather than save the Postal Service, will destroy it:
Regardless of the mandate, the decline in mail volume is undeniable and will only get worse. Some supporters worry that the attempts to save the agency will end up killing it instead.
“We need to do some major, thoughtful restructuring of the postal service so it can survive in the long run,” says Bloom, who, along with the investment bank Lazard, has been hired by the National Association of Letter Carriers union to devise a turnaround strategy for the agency. “But we don’t need to rush to judgment and slash and burn the very asset the post office has, which is its network. Then it will never recover.”
Donahoe’s critics say his proposed reforms will start the agency on a “death spiral”: If you cut the post office’s core services, customers begin looking at other options, leading inevitably to more financial hardship and further cuts down the line. A majority of Americans may be willing to forgo Saturday delivery and drive farther to buy stamps, but as the value and convenience diminish, so does the agency’s long-term viability, the thinking goes.
“The post office is being pushed to the cliff, into the abyss,” Ralph Nader, the longtime consumer advocate and an acolyte of the death-spiral theory, told The Huffington Post last year. “The ultimate goal is shrinkage — continual shrinkage and private businesses pick up the cream.”
Consider one likely service cut: the dropping of Saturday delivery. Seven in 10 Americans support the idea if the savings will help the agency survive, according to a recent New York Times/CBS News poll. But it will certainly make the postal service less convenient.
The postal service has already proposed changing its standards for first class. Whereas a first-class letter is expected to arrive within one to three days, that benchmark would be changed to two to three days, eliminating overnight service. Cutting Saturday delivery would make it even slower.
That could be inconvenient for many and even problematic for others, including those who receive prescription medications by mail.
People who receive government checks will also be affected by reduced services and loss of Saturday delivery. The burden on rural residents would be significant considering that many older Americans would find it exceedingly difficult or be unable to travel to a more distant location to pick up their mail.
Simply put, the current proposals for reforming the USPS represent a profound change in American society and call into question whether by saving the Postal Service, we destroy something fundamental in American life:
Private corporations, of course, have no social obligations to the public the way the postal service does. Lose the postal service and you lose a considerable public asset, and maybe something more, says Ellen Dannin, a professor at Penn State’s Dickinson School of Law who follows privatization trends.
“If you are going to have one country, then you have to take actions that help keep you knitted together as a country,” says Dannin. “I think that we are really in danger of losing what I would call important citizenship values … We have a responsibility to one another to make [the postal service] function effectively.”
Neither of the big package delivery companies — UPS or FedEx — want to see the Postal Service disappear. Nor would they want to take over the unprofitable first class delivery mandate — it would probably destroy their businesses as it is killing the USPS.
Whatever is to be done must be accomplished very soon, or the USPS will be unable to fund its operations. At that point, the government must decide whether to bail them out, or let the USPS die. Neither choice would be palatable or wise.
Greetings:
I spent most of my work-life in the printing industry, so I have had both direct and indirect dealings with the Postal Service. My experience also includes dealing with printing firms in various stages of decline. Lastly, my current residential mail deliveries do not seem to include anything that requires same-day or next day handling. Invoices, magazines, direct (advertising) mail, and personal correspondence comprises the bulk.
Thus, my assessment is as follows: No more Tuesday, Thursday or Saturday deliveries. Higher priced services like Special Delivery, Overnight, etc. would be retained.
With the decline in mail volume, and the predicted future decline, arguing about Saturday deliveries is two days late and two dollars short. In times of retrenchment, cutting deep and then trying to rebuild would be my preferred approach. A marginal cut, such as Saturday’s only, is much more likely to prolong the agony than solve the overall problem. If your market is in continuing decline, you need to figure out what you can actually hold on to and then restructure to meet those opportunities.
Probably 95% of the snail mail I receive at my road side rural mail box is dead tree spam, unsolicited and unwanted. This mass mailing gets discounted or bulk postal rates.
I cannot remember the last time I sent a hand written, first class letter to anyone.
Understanding that the new communications technology is vulnerable to system wide failure and interruptions, it is still inescapable that the Ben Franklin concept of the Postal Service no longer has much value. It has been made irrelevant by the same technology that is killing print media; instant transmission of communication in every niche that the Postal Service operated up until the mid 1990s.
Unless there is a major collapse associated with current communications tech and systems, the Postal Service becomes a last resort, strategic reserve at the most. It becomes the last ditch communications system, useful only if all else fails, and then only if it has enough resource to function.
Exactly!! You’ve hit the nail right on the head.
Let the USPS die a natural death. It has become increasing irrelevant and any attempt to keep it alive is just going to prolong the inevitable withering away of this service.
Like you, 95% of what winds up in my mailbox is junk mail which I neither want nor appreciate; it goes straight into the recycling bin. The rest is a few bills that I could easily eliminate by making different payment arrangements. Maybe two or three times a year, someone sends me a paper Christmas card or birthday card. Those people could easily send me electronic cards.
Anything else could be sent via couriers like FedEx.
Unfortunately, some USPS employees will lose their jobs but that’s inevitable with technological change. I’m sure harness and buggy whip manufacturers took a hit when the automobile got popular but no one seriously proposed abolishing cars to keep those industries alive nor did they subsidize horse owners to keep people buying harnesses and buggy whips.
The better USPS employees SHOULD be able to get jobs with private couriers.
“Simply put, the current proposals for reforming the USPS represent a profound change in American society and call into question whether by saving the Postal Service, we destroy something fundamental in American life”
Let’s see, there is a current war to destroy the economy, eliminate personal freedom, marginalize freedom of religion, etc.,etc.,etc. And restructuring the Post Office that is not keeping up with the changing times is destroying “something fundamental in American life”? Give me a break!
“At that point, the government must decide whether to bail them out, or let the USPS die. Neither choice would be palatable or wise.”
You have not made the case that it is unpalatable for USPS to die. It is very palatable. The fact that we do not know and never know how the silent hand will replace it traps you into the same thinking that perpetuates all failed enterprises. That is exactly the type of thinking that prevailed during the breakup of the ATT telephone monopoly. Absolutely no one predicted what telecommunications would look like in thirty years, because no one could.
One has faith in liberty or one doesn’t. There is no third way.
If like other companies, they probably have twice the labor costs due to safety requirements for everything under the sun, and data collection/input.
And, as in every government sponsored or aligned office, noone can be fired for just sucking at their job.
If they come in drunk, they get expensive “treatment”, and paid leave. If you come in drunk to FedEx, you’re fired!
They have been done in by the same thing that has killed U. S. manufacturing: Crappy, drunken, lazy, spoiled union workers with stupid contracts. If they weren’t underwritten by all of us these thirty years, they’d have closed shop then.
Once one places the lunatics in charge of the assylum, it is only a matter of time until the assylum closes.
Easy. Give the post office monopoly on legal digital signatures. At least let them get into registered digital document delivery
Also, boost first class postage to fifty cents, and limit junk mail – I thought I read that most of the post office losses are in junk mail.
Also teach them some blessed queuing theory, put enough clerks in the windows to please customers and attract more. How hard is that?
The Post Office losses are because they pay their people too much for too little work, and continue paying them until they die, no matter how badly they performed that job.
Giving them another government monoploly license to steal from us is hardly the answer!
Why do you care if they close the damn place, anyway?
The riddle of the Post Office, and what to do with them because they’re mandated in the Constitution, is a fascinating one to me. I read once, years ago, that when email first took off, the P.O. actually looked into the idea of charging postage for each email. This of course would have been a veritable gold mine for the Post Office. Thankfully cooler heads prevailed. No one there could figure out how to collect the postage (because so much of the internet is international, and people can remotely operate sites from other countries) and justifying it would have been impossible. When you pay postage for an actual piece of mail, something tangible happens, and the P.O. provides you with a service: they move the physical piece of mail to its destination. If they charged postage on email, the Post Office would do nothing but essentially tax the passage of information, and they figured people would resent that. Duh!
So what to do with them now? If we decide to discontinue them somehow, well, they have a Union. Also, many Post Offices are considered valuable in this or that Congressional constituency, so members of the House (and probably a few Senators) would resist closure. They operate under this weird hybrid where essentially they’re a private enterprise (with no taxpayer dollars involved) but Congress in some fashion runs the business, mandating or at least holding supervisory powers over things like whether they can be closed on a particular day, and whether they are allowed to close facilities. Congress trying to run a business…What could go wrong?
No taxpayers’ dollars involved?
I have this bridge. It runs from Brooklyn to the Lower East Side…
Even if we just consider that they haven’t been paying into their retirement funds, a practice for which I would go to jail, who do you think will eventually pay for that?
No taxpayers’ dollars, indeed!
That would be a prepayment John, years before it is to be used. As we all know, congress is only moving that money from one hand to the other. There is no fund being prepaid. The USPS is being used as a cashcow.
The riddle of the Post Office, and what to do with them because they’re mandated in the Constitution
The post office is not, by any interpretation, mandated in the costitution. Congress has the authority To establish Post Offices and post Roads but has not obligation to do so, nor is operating a postal service described as an exclusive function of government.
The Postal Service wanted to get into the electronic transfer of mail and was unable to due to law. The email business was one of those internet rumors that attached itself to that desire.
The country is communicating differently and it’s generational. Who can’t see that? The biggest obstacle are the cowards in Congress. Losing a cash is never popular.
The arguments for maintaining the current USPS are not realistic. One says –
“older Americans would find it exceedingly difficult or be unable to travel to a more distant location to pick up their mail.” Out here in the woods where I live we have a set of community mail boxes that are at least 10 miles from many folks. We handle this just fine. We pick up the mail for each other. It is probably a surprise to the urban elite to hear that we still help each other out here in the woods.
Another argument is — “People who receive government checks will also be affected by reduced services and loss of Saturday delivery.” My government checks are deposited to my bank account. Why would I want a check delivered to my house which I then have to drive to town to deposit?
Rick Moran would profit by getting out of whatever big city he lives is.
How about a little different approach. Maybe .45 for each FIRST CLASS letter and a flat 1.00 for each piece of ‘junk’ that currently gets a bulk discount? That would either cut down on the tons of crap that has to be handled by the Post Office or it would be a gold mine for them. That and getting rid of the stunningly stupid law that says their pension and retirement plans have to be fully funded (up front) 75 YEARS OUT. Whose idea was THAT, anyway? (undoubtedly some union guy)
At the office location I recently closed, the Post Office refused to retain the guy who knew the route and did it quickly and efficiently. They put incompetents who clearly could not read the addresses on the route in quick rotation—and, six months ago, suddenly and unilaterally stopped delivering mail to the separate mailboxes, the carrier instead dumping the mail for all the offices in a heap.
I ran into our old carrier on the street, and mentioned the terrible delivery. He admitted that there had been a test-taking scandal in the Post Office, where test-takers who knew English and could read numbers took the tests on behalf of incompetents. I suggested that all the people hired during the period this had gone on should be re-tested. “Oh, no,” he said, shocked; “That would be discrimination.”
When shutting down the office location, I attempted to complete the change of address order online. The website autofilled some incorrect information, and while there were instructions to click a link to correct the autofill, the link itself did not exist. I then attempted to do so by phone, and was informed by the postal worker, when the process was all but complete, that because the location was “one-stop delivery”—i.e., because the Post Office itself had ceased to deliver to the individual boxes—that the process could not be completed over the phone. The only way to get the mail forwarded was to fill in the postcard and drop it at the Post Office. I did that, and received a by-mail confirmation—which, not incidentally, contains an error which, while not essential, corresponds in its way to the autofill on the website.
There are many, many things wrong with the Post Office, from its business practices as detailed above, to its surly monoglot non-English-speaking clerks, to the filthy, dismal, glacially slow Third World facilities it maintains for the convenience of its customers.
The full funding of the USPS pension plan was the action of the congress. It is one of the few good examples of government rule making. Most pension funds are allowed to make unrealistic assumptions and then dump the problem on the tax payers. All pension funds should be fully funded.
If you were ahead on your mortgage payment by several years, the bank wouldn’t holler “ugh” if you missed a payment. Given the reaction of congress, the pre funding is going towards paying for something else rather than the USPS’s obligation. If the USPS dosn’t make that payment, congress has to rob something else. They really have this country in a mess.
There is no ‘pre’ funding involved here. The congress simply required the USPS to ‘fully’ fund their pension system. This simply means they must set aside funds to provide the benefits they promise.
Nor would they want to take over the unprofitable first class delivery mandate.
Why would they have to?
The solution to the post office problem is simple. Remove government from the situation entirely. Make the USPS a completely private business that can charge whatever rates it wants for whatever service it chooses to provide.And eliminate their monopoly on letter delivery. No mandates or restrictions for anyone.
The USPS seems to exist to deliver campaign literature.
This canard about “older, rural” Americans is just so much nonsense. I have plenty older, rural relatives who don’t even bother to pick up their mail for days: they have direct deposit of pension and SS, and pay their bills on-line.
Is there a need for some sort of delivery to every address in the US? Sure. Does it need to be every week day, with high paid personnel and gold-plated pensions? No.
So somewhere in between is the answer.
I’m not a fan of the USPS and frankly think that if they got out of the discounted junk mail business, they could probably provide a better service. Interestingly, it seems that if the USPS were allowed to end the mandated discounted services to ALL governmental entities, then they might be looking at a much different balance sheet.
I was a substitute carrier for a year back around 1990. In our training, I learned that “Business Bulk” mail, AKA junk mail, was the only thing keeping the Postal Service afloat. I doubt much has changed in the intervening years, which is why most of the mail you get ends up in either the trash or the recycling bin. If the Postal Service stopped delivering this crap, they would be out of business tomorrow.
About the only thing I mail on a regular basis is my Netflix disc. I do just about everything else online, like most Americans do, even the elderly and those who live in rural areas as well. Personally, if the Postal Service went away, I probably wouldn’t miss it much.