Skip to comments.U.S. Post (Office) has $2.2 billion loss, warns of Sept insolvency
Posted on 05/10/2011 3:36:03 PM PDT by Beaten Valve
The U.S. Postal Service posted a $2.2 billion net loss in its second quarter and said it might be unable to pay its debts by September.
The agency, which has been battling falling mail volumes and competition from FedEx (FDX.N) and United Parcel Service (UPS.N), said it expects to hit its borrowing limit by the September 30 end of the fiscal year, and will have to default on payments to the federal government unless Congress intervenes.
"The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model," said Chief Executive Patrick Donahoe in a statement.
The Postal Service -- which posted a net loss of $8.5 billion at the end of fiscal 2010, its fourth straight year of losses -- has asked Congress for permission to cut Saturday mail delivery.
The agency lost a bid last summer to raise rates on first-class mail beyond the pace of inflation.
The mail carrier, which delivers about 40 percent of the world's mail and does not receive tax revenue, announced in March that it would eliminate 7,500 jobs and close 2,000 post offices in an attempt to cut costs
(Excerpt) Read more at reuters.com ...
I hope they aint to big to fail
A government entity spending more than it takes in. What is this world coming to?
there are laws which require the use of mail. ie first class mail, or certified mail.
Postal Asset Relief Program!
Ned 2.2B, ah heck we’ll give you triple that.
Bankruptcy and failure sounds better.
I'm not going to defend the way the Post Office is run, especially at the upper levels. But this reminds me of the way social security payments were also kept level last year and this year, because Obama's gubbermint said there was "no inflation." That, of course, is a flat out lie, as anyone who has been buying basic necessities such as food and fuel is well aware.
Major candidate for privitization, IMHO.
Hand the mail off to the private sector and the 2.2 billion would be the 1st 3 months profit.
B F D! All I get is junk mail anyway and it goes right to the recycle bin.
Aging workforce, increased health insurance and pension costs?
Knock ‘em if you want to but sending a letter across country for 44¢ is a bargain.
They should sell them off, I know that I could deliver the mail for less.
People want cheap reliable mail service, what they have is expensive, unreliable,....
The problem is the post office needs to remove all sorting from local sites and go to a hub and spoke model. This means closing 99% of post office sorting rooms and laying off thousands. They just don’t want to survive if it means doing that.
I've got an idea, just tax other carriers like FedX and UPS to make it fair and add a tax onto the tax for business' to post mail!
That should work!
Doesn’t the postal service have some sort of contract workers now? Used to be a job with the postal service was great - good pay and benefits. Not sure it’s like that these days.
This isn’t possible. According to Obama, monopolies provide better services at lower cost. It is the benefit of the monopoly which drives the whole argument in favor of single-payer health care. If the postal service monopoly can’t break even, then will we soon hear stories of how Amtrak is losing money too?
Let it die.
>I won’t miss ‘em...
It’s not that simple. We ship parcels to Asia and Europe and USPS is the cheapest when it comes to tracking and insurance. Fedex and UPS are THE highway robbers. Only domestically that the latter 2 becomes a no-contest.
What I despise are the unions and their ridiculous retirement packages which they bleed dry from the taxpayers. It’s the smug “I cannot be fired because I am union” attitude you can read from their clerks that pisses me off.
They can’t be broke.
We haven’t been taxed into serfdom.
>>Knock em if you want to but sending a letter across country for 44¢ is a bargain<<
An email or FAX is 1/100th that (if that much).
The usps is like printed newspapers — all but useless.
LOL! No Problem!
They’ll just do the liberal thing and raise the rates!
Poor dears, they work soooo hard! s/
What about the vote taking jobs program?
Without all those workers being employed, they may not vote democrat.
US Post Office = The bane of every representative.
This has been brewing for years folks. No one wants to be responsible in closing Post Offices on their watch.
As yourselves, why has then the US Postal Service kept up with the FedX and UPS.
I can send a letter for free via the internet, doesn’t look so good by comparison.
As = Ask (duh)
Privatization..... My opinion but I understand your point.
Me thinks they are well past the point of failing...
Oh my gosh. Think of all the SEIU members who will lose their jobs.
pdf it and send it electronically for free.
This is the reason the post office is having trouble. I can mail a 10 page document for 44 cents sure. it’ll get their in a timely manor for ground delivery and for the cost.
I can feed it to my scanner, click my mouse a few times in it’s there with in 5 minutes of me hitting “SCAN” on the scanner.
I can feed it to the fax machine and zap it over to where it’s headed for pennies or, if you have a flat rate line (no long distance in all 57 states) no additional cost at all.
The post office still has it’s place, but it’s a much much smaller place now, and they have not shrunk to fit the new place for them.
With SS going paperless, more and more taxes being filed electronically even the US government is dumping them.
Great, sell them to the either Fedex or UPS. Keep the politicians away and watch the free market do what it does best.
That’s right, you won’t miss ‘em, because the Post Office is explicitly required directly by the Constitution, (Article 1 Section 8, Clause 7) and it isn’t going anywhere soon unless we amend the Constitution to eliminate it.
But there are too many legal documents that by Federal, State and Local Law have to be delivered by US Mail, to eliminate the Post Office completely. I wonder how difficult it would be for Congress to limit what the Post Office can carry or deliver; eliminating all but First Class delivery for example. I would not miss the volumes of junk mail that I get that do nothing but add to the garbage stream I am mightily taxed to support as well...
Parcel Post ought to be self supporting...there is no excuse not to charge what it really costs to deliver a package, as much as the market can bear.
Mail your Christmas cards early..............
That is the reason.
If you required every letter to be machine sortable with a tracking number, you move to a hub and spoke model, the cost of sending a letter would drop to a fraction of the current price.
It may mean that the local post office is going to be in a rented office in a business park and the mail delivered via standard commercial vehicles, but it will get done as it always has.
Mandating that the post office buy electric cars, trucks, and hybrids didn’t help things.
6 days per week deliver on the highest-volume 10% of routes.
5 days per week on the next 10% of the routes (by mail volume)
After that 3 days (M/W/F) for the next 30%.
2 days (T/Th) for the next 30%
1 or 2 days a week for the remaining 20%, as needed.
Mail carriers now deliver mail over hundreds of miles of rural area where there are VERY few items to deliver (or even NONE! - Just to see if there is anything to pick up.)
They could base the number of deliveries per week on the volume for a route. Businesses would get the service they need because of their volume. Residential would get service when there is some mail to deliver.
If it absolutely has to be there on a given day, don't use USPS.
“does not receive tax revenue...”
Who is covering their huge operational debts and pension obligations? The reporter must be drinking USPS coolaid.
Where I live in SW Florida packages delivered by fedex and ups are left at my door...but all packages sent via usps I have to make a special out of the way trip to pick up from their warehouse. Then end up having to wait for 20-30 minutes at their warehouse as well, total waste of time and tax dollars.
Really burns me up to be put through such a government/union style hassle just to get my package! Reminds me of the evil vehicle inspections I had to go through when I lived in NJ. Ben Franklin must be rolling over in his grave...
Yeah there a laws about who is eligible to become POTUS too but.................
You know, even local governments figured out they needed to outsource their garbage collection.
The first thing the garbage contractor did, implement what you just said.
Not only did they reduce their employee cost, they cut their equipment and maintenance way down too. They found they only needed 1/8th the amount of equipment the cities were using and only 1/6th of the employees.
Since then, these garbage contractors have never stopped innovating, every year they come up with a new automation or money making scheme.
Remember when you were little and there were 5 guys on every garbage truck? Now they are down to 1 and the garbage contractors are salivating on a driverless model that everyone predicts will hit sometime in the near future.
This is a perfect example what happens when you take something from Government and give it to the private sector.
Who needs ‘em?
Inflation statistics have been understated for years.
Keeps Social Security and military retirement payments lower.
But, but, but,
there is no inflation.
“The problem is the post office needs to remove all sorting from local sites and go to a hub and spoke model.”
They already did that years ago.
Mail in this region is shipped to a regional sorting center and then sent back as presorted mail to the local area to be delivered. AFAIK, only mail that is dropped in a town for delivery in that town (unicorporated) might be sorted locally. In our county seat of less than 2,000 they don’t sort any mail except for junk mail which is delivered in bulk to the local P.O. and then sorted out for everyone.
Mailmen making 100K, how can they lose with that model?
Pray for America
Yeah, and there are immigration laws and borders, yet the same government that runs U.S. Post Office, is aiding and abetting a violent invasion of our country by Mexico, all while forcing the law abiding tax payers to subsidize the governments country killing open border polices.
So I would guess the law you cited is *absolutely* meaningless.
Some local rural routes are contracted. Contractors use their own vehicles.
No, they didn’t, they only think they did.
Just today, a package was dropped off at my local post office and the brought it to me the same day. They sorted it right there.
Sorry, you are wrong, I have a very absolute definition of hub and spoke and removing local sorting. If they had really implemented what you say, what happened this very day wouldn’t have been possible.
Every problem the USPS has can be summed up in one word: UNION!
IMHO, they need to either break the union completely or at least fire 1/2 their union labor.
This problem will be hanging around until something is done about the union. Period.
Here is an article about what we are talking about.
According to this article, 50% of every delivery driver/carrier’s day is spent sorting mail.
Pretty dang efficient, ah?