Posted on 08/22/2009 6:46:39 AM PDT by kellynla
Whatever possessed President Obama to mention the travails of the post office while discussing health care the other day, his timing was certainly apt. The Postal Service is headed toward a loss of $7 billion this year and another $7 billion in 2010. Naturally, Congress is planning another bailout rather than the kind of reform that would recognize how technology has transformed modern communications.
Most mail today is delivered electronically via email. Traditional postal mail volume has fallen by nearly 20% since 2000, and the average household gets one-third fewer letters than a decade ago. But this is only the first stage of the decline. The transition to Internet communications means that the Postal Service's core business—from paying bills, to sending birthday greetings, to delivering magazines—is slowly vanishing. This is on top of the package business that has already been transformed by Federal Express and UPS.
Not that the Postal Service has ever been a paragon of efficiency. If the cost of a postage stamp had risen at merely the rate of inflation since 1950 when a stamp cost two cents, today you could send a first-class letter for 30 cents. Instead the cost rose in May to 44 cents from 42 cents.
These higher prices have corresponded with worsening service. The mailman used to deliver twice a day in urban areas, but now Postal Service Chief Executive John Potter says he wants to stop Saturday service to reduce costs. No private business in America could continually raise prices, lose billions of dollars and then hope to win back customers by promising poorer service.
(Excerpt) Read more at online.wsj.com ...
Better said, it should have competition.
Lesson learned: use a courier. $12 to have an item delivered is cheaper than the $30 to the bank to stop payment on a check.
Comprehensive reports USPS ~ latest was for 2008. See:
http://www.usps.com/strategicplanning/cs08/welcome.htm
> “About 80 cents of every postal dollar pays for employee salaries and benefits (compared to less than 50 cents for Fed Ex and UPS).”
Stands to reason when you think it thru. FEDEX/UPS are hi-margin / lo-volume and the US Post is lo-margin / hi-volume.
Opening up the First Class monopoly won’t work because there is no money to be made in doing this. New Zealand has done this already: for the better part of a decade or more our postal system has been open to competition. And there are competitors for First Class door-to-door mail.
The problem is, none of the competitors can do it nearly as well as NZ Post, or as cheaply. By a very long short.
All told, the USPS does a really good job and runs a reliable, lo-cost service, despite its detractors. It isn’t as well run as NZ Post or Canada Post, but it is run better than HM Post in the UK.
If you Yanks were smart you would not allow Barry to touch your postal system. He’ll break it for sure.
If the cost of a postage stamp had risen at merely the rate of inflation since 1950 when a stamp cost two cents, today you could send a first-class letter for 30 cents. Instead the cost rose in May to 44 cents from 42 cents.
If I remember, the cost of a first class stamp in 1950 was 3 cents. .03 x 1000% = .30 cents.
> We were talking about this at the office. The post office has to go private.
I think you would live to regret that. The USPS is pretty good, and it is universal. If it were privatized you’d probably find the urban centers well-serviced and the rest of the country ignored.
It might prove difficult to get Christmas Cards to Culbertson Montana or to Warren Minnesota if you privatize the USPS. These would be unprofitable postal destinations and would likely have their services compromised in favor of New York, Chicago, Seattle... where the money is. That is the nature of private enterprise.
New Zealand’s postal service has been open to competition for about a decade, yet there is absolutely no danger of a private competitor getting a realistic foot-hold. NZ Post is a stand-alone State-Owned Enterprise, and it receives no subsidies. Yet nobody can do the job as quickly or as cheaply or as reliably as NZ Post — not by a very long shot.
Total Postal Income.....$74,932,000,000.00
Total Mail Volume........202,703,000,000
Revenue Per Piece........$0.37
You can take this backward in time to the start of USPS, or into POD territory, and way back into the pre-Civil War era.
If you track it with changes in the CPI you'll find that with few exceptions postage rates in the broadest sense (revenue per piece) have followed CPI.
Rates in the basic First-Class Mail single piece rate one ounce letter have been raised two times on account of drought. This occurred in the 1930s and in the 1950s. Once the droughts were over the rates were either reduced or simply left alone while inflation caught up and equalized the situation. In the late 1980s the USPS was close to going for a rate increase but the drought ended before that could be done.
Currently USPS is being affected by a broad economic downturn, an overbuilding of houses (1.9 million new stops in just 2008) AND a serious drought.
***This is on top of the package business that has already been transformed by Federal Express and UPS.***
In the past I have had extremely important several letters, that could have been sent first class,sent by either UPS or Fed X. I just didn’t trust the mail delivery.
A typical point...I ordered some money from my Credit Union. By mail it takes one full day to be delivered here. Order it on Monday early, and it is here on Wednesday.
After a week the check did not arrive. I called the CU and stopped payment on that check and had a new one cut and sent. It got here after one full day.
Two days later, I got the first check which took 10 days to get here. Why? Because when the first check was mailed the person putting the stamp on it accidentally tore it in half so there was a 1/8 inch gap between the top and bottom half of the stamp. Electronic scanners could not pick up the stamp so it had to be sorted by hand.
I just wire funds.
Dump ‘em...altogether...and flush....twice...keep flushing...as long as it takes...
Meanwhile I’ve dropped stuff in the drop boxes in the morning and had it arrive at the destination the same day.
Sometimes stuff gets lost. The USPS delivers at least one item to pretty much every single home in the country every day. You’re talking about close to a billion individual items a week, and yeah they lost 1 for a couple of days, but they managed to find it.
When the cost of a First Class letter was $.02, A letter sent from Chicago to New York was generally delivered the next day. Next day delivery now would cost $13.05. What's that, about a 65,000% increase?
If we were smart we wouldn’t let Barry touch anything! Too late for that.
(I picked 2008 as the last year because the inflation calculator I use ends then and I didn't feel like going to the monthly CPI data.)
Postal rate history (and an interesting inflation adjusted graph) from http://en.wikipedia.org/wiki/History_of_United_States_postage_rates
Inflation calculator as http://www.westegg.com/inflation/
Actually, they don't, although they certainly like to perpetuate this urban legend.
Unlike UPS, FedEx or DHL, The USPS refuses to make street delivery in the City Of Mackinac Island, Michigan, for instance.
When the cost of a First Class letter was $.02, A letter sent from Chicago to New York was generally delivered the next day.
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