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A Better Way to Go Postal ( Eliminate USPS First-Class Mail Monopoly )
THE WALL STREET JOURNAL ^ | AUGUST 22, 2009 | staff

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 ...


TOPICS: Business/Economy; Editorial; Extended News; Government
KEYWORDS: postal; postoffice; usps
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"About 80 cents of every postal dollar pays for employee salaries and benefits (compared to less than 50 cents for Fed Ex and UPS)."
1 posted on 08/22/2009 6:46:39 AM PDT by kellynla
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2 posted on 08/22/2009 6:48:27 AM PDT by kellynla (Freedom of speech makes it easier to spot the idiots! Semper Fi!)
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To: kellynla

The problem is too many minorities would be hurt. Not going to happen.


3 posted on 08/22/2009 6:49:01 AM PDT by Radl (sai)
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To: kellynla

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.


4 posted on 08/22/2009 6:50:13 AM PDT by Carley (OBAMA IS A MALEVOLENT FORCE IN THE WORLD)
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To: kellynla

We were talking about this at the office. The post office has to go private.


5 posted on 08/22/2009 6:51:35 AM PDT by BunnySlippers (I LOVE BULL MARKETS . . .)
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To: kellynla

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.


6 posted on 08/22/2009 6:53:06 AM PDT by nufsed (Release the birth certificate, passport, and school records.)
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To: muawiyah

Postal Ping


7 posted on 08/22/2009 6:54:11 AM PDT by ASA Vet (Everyone signing up after Nov 28, 1997 is a newbie.)
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To: Radl
"The problem is too many minorities would be hurt. Not going to happen."

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.

8 posted on 08/22/2009 6:58:42 AM PDT by Truth29
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To: BunnySlippers

Obama: “The post office has been such a great success, let’s have the government take over health care!”


9 posted on 08/22/2009 6:59:35 AM PDT by Lonesome in Massachussets (Don't anthropomorphize the robots. They hate that.)
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To: kellynla

Rallying cry....

“We need the private option!”


10 posted on 08/22/2009 7:00:47 AM PDT by earlJam
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To: kellynla

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.


11 posted on 08/22/2009 7:01:32 AM PDT by Vigilanteman (Are there any men left in Washington? Or, are there only cowards? Ahmad Shah Massoud)
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To: Carley

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.


12 posted on 08/22/2009 7:02:00 AM PDT by webschooner (First they ignore you, then they laugh at you, then they fight you, then you win -- Mahatma Gandhi)
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To: kellynla
Yeah, it's labor intensive ~ so come up with automated delivery vehicles that don't need letter carriers and we'll talk (privately because you will have just eliminated theneed for any drivers for anything).

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.

13 posted on 08/22/2009 7:02:49 AM PDT by muawiyah
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To: kellynla

14 posted on 08/22/2009 7:06:56 AM PDT by martin_fierro (< |:)~)
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To: BunnySlippers
"The post office has to go private."

Nah, just combine the PO with gov't health care. They could deliver the doctor to your door.

15 posted on 08/22/2009 7:08:20 AM PDT by Paladin2 (Big Ears + Big Spending --> BigEarMarx, the man behind TOTUS)
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To: All

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!


16 posted on 08/22/2009 7:09:19 AM PDT by kellynla (Freedom of speech makes it easier to spot the idiots! Semper Fi!)
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To: BunnySlippers
I have a plan for privatization right here on my computer. The big picture items are:

(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.

17 posted on 08/22/2009 7:13:13 AM PDT by muawiyah
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To: kellynla
5 miles inland, Southern California, rich people getting frozen venison through the mail, post office boxes, casinos, and the Air Conditioning is on?

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!

18 posted on 08/22/2009 7:16:25 AM PDT by muawiyah
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To: BunnySlippers
We were talking about this at the office. The post office has to go private.

The post office hasn't received taxpayer money since 1983.

19 posted on 08/22/2009 7:17:00 AM PDT by mvpel (Michael Pelletier)
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To: kellynla
”Feb ”Oct ”June
”May ”August

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.

20 posted on 08/22/2009 7:17:18 AM PDT by Vigilanteman (Are there any men left in Washington? Or, are there only cowards? Ahmad Shah Massoud)
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To: mvpel

Better said, it should have competition.


21 posted on 08/22/2009 7:22:26 AM PDT by BunnySlippers (I LOVE BULL MARKETS . . .)
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To: kellynla
Quick story on the ridiculousness of the post office in my life - a colleague of mine mailed a check from a location just west of Forest Park here in StL to a location just east of Forest Park. Forest Park is two miles long and it takes 30-45 minutes to walk the length of it. That piece of mail took nine days to get to its destination. Nine days. I was sitting down to stop payment on the check when the phone rang that it had arrived.

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.

22 posted on 08/22/2009 7:24:48 AM PDT by Desdemona (True Christianity requires open hearts and open minds - not blind hatred.)
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To: Vigilanteman

Comprehensive reports USPS ~ latest was for 2008. See:

http://www.usps.com/strategicplanning/cs08/welcome.htm


23 posted on 08/22/2009 7:32:33 AM PDT by muawiyah
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To: kellynla
Buying those million dollars homes is an expensive perk!!! LOL!! Sell it to the highest bidder.
24 posted on 08/22/2009 7:35:56 AM PDT by org.whodat (Vote: Chuck De Vore in 2012.)
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To: Vigilanteman

Annual Report

http://www.usps.com/financials/anrpt08/pg3.htm


25 posted on 08/22/2009 7:36:24 AM PDT by muawiyah
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To: kellynla

> “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.


26 posted on 08/22/2009 7:39:37 AM PDT by DieHard the Hunter (Is mise an ceann-cinnidh. Cha ghéill mi do dhuine. Fàg am bealach.)
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To: kellynla

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.


27 posted on 08/22/2009 7:43:49 AM PDT by Ruy Dias de Bivar (Tar and feather the sons of bi#ches! Ride them out of town on a rail!)
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To: kellynla
Not that the Postal Service has ever been a paragon of efficiency.

That is an understatement.

I live in a town of 14,000. I have converted nearly all my mail to email. I now get most bills and statements only via email oronline download.

Reason: The local PO typically loses 2-4 pieces of my mail every year. Some, I don't worry much about, but pieces that have account numbers, etc., do concern me.

My August city utility bill apparently is lost. Usually it is delivered on the 16th or 17th. It still hasn't arrived, but I got the email notification several days ago.

This is only the 5th time the PO has lost my local city utility billing in the last 2 years. The city says they mail them, but somehow, the bills get lost, either between the city office and the PO, or with the PO carrier to my house.


28 posted on 08/22/2009 7:45:13 AM PDT by TomGuy
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To: BunnySlippers

> 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.


29 posted on 08/22/2009 7:45:34 AM PDT by DieHard the Hunter (Is mise an ceann-cinnidh. Cha ghéill mi do dhuine. Fàg am bealach.)
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To: Vigilanteman
As of 2008:

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.

30 posted on 08/22/2009 7:47:44 AM PDT by muawiyah
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To: Paladin2
just combine the PO with gov't health care. They could deliver the doctor to your door.

Via Amtrack -- that other rousing government success.
31 posted on 08/22/2009 7:48:10 AM PDT by TomGuy
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To: kellynla

***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.


32 posted on 08/22/2009 7:55:28 AM PDT by Ruy Dias de Bivar (Tar and feather the sons of bi#ches! Ride them out of town on a rail!)
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To: Ruy Dias de Bivar

I just wire funds.


33 posted on 08/22/2009 7:56:32 AM PDT by kellynla (Freedom of speech makes it easier to spot the idiots! Semper Fi!)
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To: kellynla

Dump ‘em...altogether...and flush....twice...keep flushing...as long as it takes...


34 posted on 08/22/2009 7:58:13 AM PDT by gunnyg ("Just Plain Dick")
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To: Desdemona

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.


35 posted on 08/22/2009 8:03:21 AM PDT by discostu (Somehow mister reliable was not where he was supposed to be)
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To: Vigilanteman
The cost inflation is even higher than that if the deterioration in the quality of service is factored in.

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?

36 posted on 08/22/2009 8:04:35 AM PDT by Mr. Lucky
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To: DieHard the Hunter

If we were smart we wouldn’t let Barry touch anything! Too late for that.


37 posted on 08/22/2009 8:09:10 AM PDT by Republic of Texas (Socialism Always Fails)
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To: kellynla
The graph and the article hide one little fact: the worst of postal inflation increases relative to the CPI was from 1958-1974. The stamp went from 4¢ to 10¢ (+150%) while the CPI went up only +70%. From 1974 to 2008 the stamp went from 10¢ to 42¢ (+320%) while the CPI went up +332%. Set the baseline year up to 1974 and you'll see inflation and the stamp price moving in lockstep.

(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/

38 posted on 08/22/2009 8:38:22 AM PDT by KarlInOhio ("I can run wild for six months ...after that, I have no expectation of success" - Admiral Obama-moto)
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To: discostu
The USPS delivers at least one item to pretty much every single home in the country every day.

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.

39 posted on 08/22/2009 8:52:28 AM PDT by Mr. Lucky
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To: Mr. Lucky

When the cost of a First Class letter was $.02, A letter sent from Chicago to New York was generally delivered the next day.


Even if that were true, it is not representative of typical delivery times over the system at that time. And it was certainly not guaranteed.


40 posted on 08/22/2009 9:38:55 AM PDT by Atlas Sneezed (Typical "Rightwing Extremist")
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To: Mr. Lucky

Unlike UPS, FedEx or DHL, The USPS refuses to make street delivery in the City Of Mackinac Island, Michigan, for instance.


My community, too. Hundreds of families within 3 miles of the post office, and we have to drive to pick up the mail as often as we want to receive it.

And we and our correspondents pay just as much as for those who receive home delivery.


41 posted on 08/22/2009 9:40:33 AM PDT by Atlas Sneezed (Typical "Rightwing Extremist")
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To: Beelzebubba
While not guaranteed, it was typical. Mailed delivered to the RPO car on any of the Pennsylvania Railroad trains leaving Chicago prior to the Broadway Limited would usually be delivered the next day to an address within New York City.

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.

42 posted on 08/22/2009 9:51:28 AM PDT by Mr. Lucky
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To: DieHard the Hunter

If we Yanks were smart, Barry wouldn’t be in a position to muck about with anything!


43 posted on 08/22/2009 9:53:02 AM PDT by clee1 (We use 43 muscles to frown, 17 to smile, and 2 to pull a trigger. I'm lazy and I'm tired of smiling.)
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To: Mr. Lucky

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.


44 posted on 08/22/2009 10:20:06 AM PDT by discostu (Somehow mister reliable was not where he was supposed to be)
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To: muawiyah
What do think should be the minimums?

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.

45 posted on 08/22/2009 10:23:09 AM PDT by ASA Vet (Everyone signing up after Nov 28, 1997 is a newbie.)
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To: ASA Vet
Myself? I never belonged to a church that had enough members to qualify for presort or bulk rates. Now you might think that means I find it difficult to sympathize with the larger churches that did, and you would be absolutely correct!

I was thinking of a minimum piece count of at least 5,000 (kind of like Canada).

46 posted on 08/22/2009 10:35:59 AM PDT by muawiyah
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To: discostu
It depends upon what your definition of "packages" is.

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.

47 posted on 08/22/2009 10:48:15 AM PDT by Mr. Lucky
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To: muawiyah
A 5000 piece minimum would certainly cut down on the number of mailers.

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.

48 posted on 08/22/2009 10:55:33 AM PDT by ASA Vet (Everyone signing up after Nov 28, 1997 is a newbie.)
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To: Mr. Lucky

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.


49 posted on 08/22/2009 11:33:54 AM PDT by discostu (Somehow mister reliable was not where he was supposed to be)
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To: discostu

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?


50 posted on 08/22/2009 11:51:53 AM PDT by Mr. Lucky
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