Skip to comments.A Better Way to Go Postal ( Eliminate USPS First-Class Mail Monopoly )
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 businessfrom paying bills, to sending birthday greetings, to delivering magazinesis 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 ...
The problem is too many minorities would be hurt. Not going to happen.
I use priority mail at least once a week. The price is half that of UPS, I can get a tracking ticket that allows me to track on line and track delivery.
I still write letters and send cards to my kids and wouldn’t dream of sending them e-cards.
The union rules are what is killing the post office and that is not about to change.
Most likely the messiah will be bailing out the post office before too long.
We were talking about this at the office. The post office has to go private.
They should announce a 5 year phase out of the postal service. Give time for the private comopanies to extend their services as they will or new companies to come forth. Also, gives time for employees to retire or get other jobs. Sell off the buildings and put in fund to pay for retirements.
Agree. Plus, the unions are a major Obama power base. If anything, he may disguise what he does, but the unions will be better off and more insulated than ever under his Administration.
Obama: “The post office has been such a great success, let’s have the government take over health care!”
“We need the private option!”
That’s a great graphic and would look even worse if you used, say 1880, for a base year. First class postage was two cents from then until World War II, except for a brief period during World War I when they were increased to three cents. After that war ended, they went back down to two cents where they would remain until World War II bumped them up permanently.
I have a business where I ship a number of packages every week. Forget UPS — don’t even bother — they are not competitive. Why? All Union.
I ship mostly Priority Mail, though depending on weight, some items are cheaper to ship via FedEx Ground, particularly if they are going to a business, where FedEx Ground gives a huge discount.
I print all labels online, for both Priority Mail and FedEx (you get a discount by having an account with FedEx and printing the labels at home). For USPS, I leave a note on the mailbox and the mailman comes to my door to pick up the Priority Mail pkg. For FedEx Ground, I drop the package at any Kinkos/FedEx store. You can have Priority Mail boxes of all sizes shipped to your door free.
Did you know that most USPS Priority Mail packages are moved city to city under contract by FedEx? Now you know why the service is so fast and efficient.
BTW, there's always somebody coming up with the comparison of a basic FCM stamp with the CPI ~ you rarely see them compare the average cost of a piece of mail with the CPI. As you well know major mailers get substantial discounts for pre-preparation of their mail, and the Wall Street Journal itself benefits from the very low rates for Periodicals Class ~ and without which they would scream to who-tied-it.
I suspect they fear that if there is a postal bail out their mailing class will not benefit from it inasmuch as they are already a beneficiary of heavy cross-subsidization.
Like I've said before, there's a class of capitalist who wants no competition and a government subsidy.
Nah, just combine the PO with gov't health care. They could deliver the doctor to your door.
And it’s not just “labor” costs...
I live 5 miles from the beach in So. Cal. and my P.O. has the A/C running 24/7 365 days a year...you could go into my P.O. on any Sunday a.m. and “hang meat” in there it’s so cold.
Talk about WASTE!
and don’t talk to me about the employees!
Half of them don’t speak the “queen’s English” and the other half don’t know what the heck they are doing.
We had one postal deliveryman, a foreigner, who COULDN’T EVEN READ THE STREET SIGNS!!!
I don’t know what happened to all the Military Veterans who were supposed to get a preference in hiring at the USPS but in So. Cal. the MAJORITY of postal employees are FOREIGNERS!
(1) Employee buy out,
(2) Government grants full service monopoly for 20 years, renegotiable indefinitely for additional 20 year periods,
(3) We do a leveraged buy out of Fed Ex and UPS, and then displace Postal managers with UPS managers ~ and Fed Ex becomes the exclusive air lift provider for the new USPS.
Service changes will include the closure of 28,000 useless facilities that actually impede the speedy delivery of mail to the rural sector, the elimination of door delivery in residential areas (to be replaced with cluster boxes), the elimination of Tuesday delivery, and quick negotiation with states, counties and cities where there are buildings rented by USPS to EXEMPT those buildings from property taxes (else a building will be rented some other town that makes that agreement).
Minimum quantities eligible for presort or bulk rate discounts would be raised substantially.
Yeah, I've been there ~ 115 degrees and it's just Sunday morning.
AC AC AC AC AC AC AC AC AC.
Solution ~ move to the beach!
The post office hasn't received taxpayer money since 1983.
Actually, stamps went back up from two cents to three in 1932, not World War II. They were definitely three cents in 1950 and rose to four cents in the summer of 1958, the base year for the chart in post #2.
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:
> “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.
Unlike UPS, FedEx or DHL, The USPS refuses to make street delivery in the City Of Mackinac Island, Michigan, for instance.
And we and our correspondents pay just as much as for those who receive home delivery.
I discussed this with my dad once and he informed me that while he was in New York awaiting deployment to England in 1942, he received a letter from his mother in rural (and I mean rural) Indiana the day after it was post marked.
If we Yanks were smart, Barry wouldn’t be in a position to muck about with anything!
202 BILLION packages a year. Even if there’s a few chunks of the country that they decide not to go to, that’s still a lot of stuff going to a lot of places, 6 days a week, with usually around 48 hour turn over.
Many of the little non-profit churchs are dropping out of Presort because they no longer have 200 members. Same thing with smaller VFW, Legion, DAV posts, etc.
The new Move Update requirements are killing off many of the little guys. And when the IMB's become required many of the remainder will quit rather than buy a computer and software.
Telling them to hire a mail house doesn't sit well either.
The mail houses volumes seems to be increasing again, after a slump of a few months.
Lots of CSRS folks here still waiting for a reason to leave.
I was thinking of a minimum piece count of at least 5,000 (kind of like Canada).
Federal law prohibits private enterprises from competing with the Post Office in the delivery of 1st Class mail. Looking only at express packages, for which consumers are allowed to make market choices, in 2004, UPS handled 13,638,000 packages per day; FedEx handled 3,167,000; DHL 705,000 and the Post Office 149,000.
I think I'll see if I can get the figures on average mailing size at our BMEU.
I'll get it for all mailers except mailing houses since their volumes would skew the figures so far up as to make the data meaningless. Doesn't take too many 500,000 piece mailings to mess up averages for all mailers.
Package - parcel - individually identified/ addressed/ paid for item. 202 BILLION. 3.8 billion a week, half a billion a day, that’s more items in a day than UPS, FedEx and DHL combine for in a year.
Why is it, do you think, that the government has to guarantee the Post Office a monopoly on 1st class mail business and, yet, the Post Office still loses $7 Billion this year on the business?