<p>Mizzbee is exactly right. The post office serves all Americans. In spite of what they say, both UPS and FEDEX really don’t serve rural America well. I live in town of 800 people. My house is a very large white house that that is the first thing you see as you come into town. I have a blue 911 address tag right out on the road. Yet every time I get something by FEDEX I get a phone call – we can’t find your house. And people sending things to me by FEDEX or UPS can get charged a “rural delivery fee.” The post office always finds me – even when the mail is misaddressed – If you put my last name and my zip code on it, it will get to me.
On another note, I volunteer in our local library – we have three public access computers. Every night the computers are filled – I would guess that about 25% of our patrons have no access to the internet at home.</p>
<p>
</p>
<p>That may have something to do with the unfortunate fact that its revenues are dropping dramatically, while the population of aging postal retirees is rising at a clip. There was a time when the post office was entirely self supporting and fiscally sound. During that time, the federal government often “appropriated” large portions of USPS revenues to cover deficits in other areas. (We can only hope they’ve stopped this practice, given the circumstances.) But the federal government continues to skim money off the top from other self-supporting agencies to supplement other budgetary goals. My D works as a patent examiner for the US Patent and Trade Mark Office, which doesn’t draw one red cent from federal tax dollars. On the contrary, as much as a quarter of its revenues have been confiscated by the government for other uses in recent years. </p>
<p>The dramatic shift in the way Americans communicate and pay their bills largely accounts for the reasons why the Post Office is in fiscal crisis. These changes came about pretty rapidly, born on the wings of relatively small, nimble and diverse private interests. The necessary behemoth tasked with doing all that the Postal Service does can’t realistically be expected to be as adroit as UPS (which doesn’t even perform half the services that the USPS does), much less keep pace with accelerating technological turnover. The USPS did a very daunting task very well for more than a century. But, that was before cell phones, voice mail and the internet. It’s easy to take pot shots at the Post Office, but the solutions to the problems aren’t so sound-bite easy. And as has already been pointed out, there is still a sizable portion of the US population that very much depends on the Postal Service to continue providing the services it does.</p>
<p>MizzBee: you are correct. Many remote rural communities depend on the USPS, and so do tiny businesses who do not have the $$ to advertise on TV and internet and instead promote their services and products in local newspapers and coupon flyers (delivered by USPS).</p>
<p>As for rural America, since my Mom was postmaster most of her time, I recall that when she would come home for lunch, the UPS guy would stop by the house. Seems if he couldn’t find a house, he knew my mom would give him directions. Fedex later did the same thing. I can only imagine that they did that while she was working as well. Pre-GPS can you imagine the sight of the competitors’ trucks sitting outside the post office?</p>
<p>
</p>
<p>The US isn’t losing squat. Calling the USPS a “government welfare program” is totally ridiculous. The operation of the USPS isn’t funded by tax dollars–zero–and they’re not looking for a bailout.</p>
<p>The Postal Accountability and Enhancement Act of 2006 (PAEA) imposed on the Postal Service the requirement that it prefund retiree health benefits by $59 billion in ten years through 2016, over and above continuing to make annual premium contributions on behalf of USPS retirees that are now approaching $2.5 billion. This required level of prefunding of retiree health benefits is not shared by any other public or private entity. Just eliminating that requirement would go a long way toward fixing the problem. [Statement:</a> USPS Exploring Additional Legislative Proposals](<a href=“http://about.usps.com/news/national-releases/2011/pr11_lstatement.htm]Statement:”>Statement: USPS Exploring Additional Legislative Proposals)</p>
<p>[Northrop</a> May Feel Squeeze of Postal Service Cost Cuts - Bloomberg](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>
<p>The postal service should cut back…their revenues are decreasing…</p>
<p>I know some people get a kick out of this…but…the private sector is going to lose too…</p>
<p>Northrop, Fed EX, etc…</p>
<p>"“It’s becoming more competitive to do work for us and it’s going to have to be done at slimmer margins from a standpoint of our supplier base,” Chief Financial Officer Joseph Corbett said in an interview. Corbett said he wants to cut at least $1 billion a year from supplier spending.</p>
<p>The cost-cutting has implications for many of the largest Postal Service contractors, said David Hendel, a Husch Blackwell LLP partner who specializes in postal contracting. He compiles a list of top service contractors from documents obtained through the Freedom of Information Act.</p>
<p>Companies at risk of losing postal revenue range from Northrop Grumman Corp. and Siemens AG, which supply sorting equipment including barcode readers; to FedEx Corp. (FDX), the largest contractor; to closely held trucking company Pat Salmon & Sons, which doesn’t list any business line on its website other than hauling mail. "</p>
<p>"FedEx, which operates the world’s largest cargo airline, is the largest Postal Service supplier, receiving $1.4 billion in the 2010 fiscal year, according to Hendel’s list. Hendel has compiled the list annually since 2001.</p>
<p>FedEx’s postal revenue is more than twice the $495 million of No. 2 Northrop Grumman Corp. (NOC), according to the list. Most of FedEx’s postal revenue comes from a seven-year, $1 billion-a- year contract to fly about 4 million pounds of mail per day until 2013, an agreement the service negotiated “from a position of extreme weakness,” Hendel said.</p>
<p>FedEx’s mail volume will decrease after the contract runs out as the service moves more mail on the ground, Corbett said. The service will continue to use FedEx to transport priority mail and some first-class mail, he said.</p>
<p>FedEx receives about 3.5 percent of its revenue from the Postal Service, based on Hendel’s listed amount as a percentage of the company’s last-reported annual revenue. The company, based in Memphis, Tennessee, declined to comment on whether it’s under Postal Service pressure to cut costs.</p>
<p>“FedEx values its alliance relationship with USPS, both as a supplier and a customer,” Maury Donahue, a FedEx spokeswoman, said in an e-mail. "</p>
<p>According to MSNBC: USPS receives no taxpayer money and delivers half of the world’s mail. I am puzzled too as how this is a “government welfare program” and amazed that it only costs me 44-cent for a piece of mail that with 99% certainty will reach its destination. In another life time in another country, I remembered too well the exorbitant cost, the ripped open mail whether due to poor handling or censorship, who knows… Thanks to CC parents tip, I just dropped off a care package to my daughter, all 7 lbs of cookies for straight rate of $10.50 that will reach her in 3 days. I feel almost guilty paying so little - UPS and FedEx won’t even come close - after hearing the dire situation they are in.</p>
<p>At some point, we’ll have to decide whether the mail service is a basic necessity, therefore, will be a subsidized government funded mandate. If we privatize all, very few of us can afford the true cost. I count my blessing everyday for clean air, clean water, flushed toilet (!) and the mail service.</p>
<p>
</p>
<p>Yes, I’ve been seeing recent commercials for the USPS, stating that The Postal Service is not supported by tax dollars. But, I have to ask, how is it managing to stay operational year after year, even as it hemorrhages red ink? Most private business would have been out of business long ago. If not the US tax payer, who’s subsidizing the USPS?</p>
<p>I disagree. The USPS absolutely is a “government welfare program.” That is, it’s a program set up by the government to ensure the welfare of the American people - something it’s done an outstanding job of for a long time.</p>
<p>Now, it’s true that the USPS is less important to the lives of many Americans now than it was just 10 years ago. So it’s more skewed towards ensuring the welfare of poorer and more rural folks than the affluent urbanites. But it is still a vital program for ensuring the welfare of a lot of people.</p>
<p>I guess I shouldn’t be surprised at the knee-jerk sneers at the dreaded “socialist” institution, and it’s <gasp> government worker employees. But the fact is, it’s precisely because it’s a government welfare program that it can’t be allowed to just go bankrupt any more than the Army can go bankrupt.</gasp></p>
<p>The Postal Service has done an outstanding job over the years, in my opinion. The economic playing field has changed lately, which will require adjustments. But unlike some of the high-priced delivery services (one of which went out of business leaving me four dozen baseballs to the worse a few years back) it will continue to provide for the welfare of Americans all across the country for years to come. </p>
<p>I guess that kind of reliability is worthless in some folks’ eyes these days, but not mine.</p>
<p>
</p>
<p>Note that technological change hurts the USPS much more than it does the private delivery services, because the USPS deals with letters and postcards and the like that have been replaced by electronic communication, while the private delivery services focus on packages that cannot be replaced by electronic communication (and which may have increased in volume due to easier web page ordering). You probably remember a time when you mailed a stack of letters containing checks for various bills like mortgage/rent, phone, electricity, water, credit card, etc… Now, you probably use web banking bill pay to do all of that.</p>
<p>Anyway, do we still consider first class mail an essential service for all? That assumption is why the USPS has to cover everyone, including hard to reach rural customers, for the same regulated price first class postage, in exchange for a monopoly on first class mail. Arguing for deregulation or privatization of first class mail means abandoning that assumption.</p>
<p>The post office has the problems that many large organizations face when circumstances change rapidly, their structure and such was built for a different time, and despite many changes to make themselves more efficient, they face a lot of challenges. As others have pointed out, because of electronic bill paying, e-mail and so forth, mail volumes are dropping, and it is cutting into revenue., plus the post office has a lot of retirees and so forth that cost it a lot of money.</p>
<p>Plus it operates under regulations that make it hard to be flexible. For one thing, the cost of a postage stamp cannot go up higher then the stated rate of inflation, yet the cost of sending a letter has gone up a lot more then that. Compared to the rest of the world, the cost of a first class letter is ridiculously low, and for that same amount you can send the letter all over the US, no matter whether next door or Alaska. Part of the reason is to make sure that rural areas have reasonably priced alternatives to send things (which is kind of ironic, more then a few of the tea party types have been howling about letting USPS die, let the private sector take over…considering many of them are rural folk, they better hold onto their hats, because UPS and Fedex aren’t going to deliver letters for whatever first class postage is these days…). </p>
<p>They also face ridiculous ideological barriers. To give you an idea,laws have finally been repealed that didn’t allow liquor sales via mail order, but the USPS is forbidden from shipping alchohol related products, which is quite a burgeoning market. The USPS already does a lot of end delivery work for UPS and Fedex, but there are limitations on how much traffic they can handle for those carriers and other idiotic restrictions. </p>
<p>The post office cannot legally run red ink and they get no payments from the federal government, when they run red ink, they do what private businesses do, they either usee reserves they have or they borrow money to cover the red ink until they can balance the budget. </p>
<p>I also think that those claiming the post office is inept, that we have private carriers who will do the job more efficiently, etc, would be in for a rude shock if USPS went away. Among other things, you would see all kinds of shipping costs go through the roof, due to the fact that Fedex and UPS have an oligopoly going in the US especially. The post office offers one of the best bargains in shipping, priority mail takes a couple of days and costs significantly less then Fedex or UPS, and it helps keep prices down, without that people would have few options and Fedex and UPS could charge what they wanted (where else would people go?). More importantly, it would end up costing more because Fedex and UPS use the Postal service to do a lot of final delivery to more rural places, which saves them money (since USPS goes there anyway), if UPS and Fedex have to go to small town america like that to deliver almost everything, they will charge for that, big time.</p>
<p>And for things where a letter is still used, it won’t be 4x cents, I would be willing to lay pretty good odds that if Fedex and UPS took over mail delivery, especially as it drops in volume, that it would cost at least a couple of bucks…</p>
<p>My comment to those cheering the USPS as evil or ‘let private carriers do their job’, be carreful of what you wish for…btw, disclaimer, I don’t work for the post office, no family member does, but I did do work in grad school on delivery companies like Fedex, UPS and USPS…</p>
<p>musicprnt - thank you for an enlightening explanation of USPS. I agree - the post office is the best bargain around and we may not realize what a good thing it is until it’s gone.</p>
<p>We used to do mailings for our business in our off season , but between the printing, postage and time consumption of licking and sticking , it just isn’t feasible for people like us. Constant Contact is cheaper , more efficient and much quicker than snail mail
If you get a returned email , it isn’t going to hurt like a postcard that you put everything into , only to have it returned because of a cahnge of address
Also , I have always wondered why it is necessary to produce so many pretty stamps ? Wouldn’t it be more cost effective to have one generic stamp with an image of old glory than constantly creating dog, geese, holiday , love stamps for collectors ? Seems wasteful to me</p>
<p>lje62, stamp collecting is an absolute revenue producer for the USPS. They create collectible items that sell for much more than the original cost on the secondary market. In addition, it employs US artists and literally documents the US culture throughout the ages. A nation that celebrates its culture, traditions and accomplishments for $.44 is pretty amazing to me.</p>
<p>I have a good friend who is a mail carrier. Things have definitely changed as the post office has tightened up in recent years. His office hasn’t hired a new, full-time employee in quite awhile, and as a result he almost always has to work 6 days a week, getting only Sundays off. He’s expecting another staffer to retire this fall, and he fears that with no new hires, the remaining carriers will be walking their routes well past dinner time to make sure the mail gets delivered.</p>
<p>My friend likes to point out that if you compare the cost increase of first-class postage in the last 20 years to the price increases of almost anything else, mailing a letter is a bargain. And I agree with the comments above – anyone who thinks FedEx or UPS would charge just 44 cents to mail something is in lala land.</p>
<p>(However, I make a point not to tell him that we pay our bills online. He’s forbidden everyone in his family from doing that!)</p>
<p>I think Saturday delivery should end. I think some post offices need to close. But I cringe to think of the economic impact of losing 500,000 workers. Those people pay income taxes, and if they lose their jobs, we’ll not only lose that income, but have to dish out unemployment benefits and possibly welfare. It’s going to cost tax payers either way.</p>