U.S. Postal Service on the Verge of Collapse

[DoggerDan]

What's this?

http://finance.yahoo.com/blogs/daily-ticker/now-u-postal-belly-153600714.html

They have 650,000 people on the payroll (1 person serving every 461 Americans). One would think at least a few of those 650k have the training and smarts to figure out how to restructure the post office so that it's in the black like the other delivery services out there.

 

[Greg Bernhardt]

I can't remember the last time I sent any mail. I sent an big envelope last month, but that was through fedex. USPS will need to cut back, that is obvious. Just the sign of the times. I support removing sat service for one thing.

 

[WhoWee]

Their union agreement was extended through 2015 back in May 2011.http://www.washingtonpost.com/blogs...ntract-ratified/2011/05/12/AFrpFNyG_blog.html

Now a large payment is due to retirees.
http://www.csmonitor.com/USA/2011/0...seeks-reprieve-from-Congress-to-avert-default

"In a Senate hearing that once again rang an alarm bell on the dire straits the US Postal Service is in, US Postmaster General Patrick Donahoe said the institution is on “the brink of default.” He also told Congress that without legislation by Sept. 30, the Postal Service would default on a mandated $5.5 billion retiree health benefit payment due this month.

Mr. Donahoe told Congress that unless lawmakers enact emergency measures, the Postal Service (USPS) could shut down entirely this winter and completely run out of money to pay salaries and contractors by August or September of next year"

***

My question - with deficits of almost $9Billion - why did they extend the union agreement prior to evaluating the system?

http://www.pri.org/stories/politics-society/government/will-the-postal-service-shut-down5780.html
""The Postal Service is running out of money," according to Steven Greenhouse, labor and workplace correspondent for The New York Times. "It's operating at a deficit of $9 billion which is a whole lot of money." Unless Congress takes emergency action soon to save the Postal Service, officials say they could run out of cash by the end of this year, or next year.

A large part of the problem is that the Postal Service simply hasn't been able to adapt to competition from the internet, Greenhouse reports. Instead of sending letters, people send emails. Instead of receiving magazines and newspapers through the mail, people have starting reading more online.

"Mail volume has plunged in recent years by 20 to 25 percent," Greenhouse told PRI's The Takeaway, and postal revenues have gone down at the same time. The Postal Service, according to Greenhouse, is "having a hard time cutting its cost as fast as its volume and revenue drop."

Now, Postal officials are trying to cut costs by as much as $20 billion or 30 percent in the next four or five years. One of the proposals is to end Saturday mail service throughout the United States, but some have strenuously objected to that. Congresswoman Susan Collins from Maine brought up the fact that ending Saturday service could seriously hurt rural Americans."
****

How can ANYONE expect Congress to fix this mess?

 

[Pengwuino]

Huh? The post office? What do they do?

 

[Vanadium 50]

USPS is required to pre-fund the retirement accounts, like a business, and unlike most other governmental bodies. Additionally, the USPS has a no-layoff contract, and to reach the staffing levels they would like to be at today for the volume of mail carried, they need something like 12 years worth of attrition.

One proposal is to relax the first restriction, and allow the USPS to continue to operate, drawing down the pension surplus. The other proposal is to end the no-layoff provision and reduce the letter carrier/letter ratio to where it was 2 or 3 years ago.

As you might imagine, each proposal has its advocates.

 

[phinds]

First Class mail used to subsidize other forms but doesn't any more AND the P.O has to keep open lots of small rural P.O.s that would NEVER be tolerated by a totally for-profit corporation.

At the very least they're going to have to drop Sat deliveries and possibly another day as well, and they are going to have to close lots of small P.O.s

I hear folks pissing and moaning all the time about how poor the services is but I think that's total BS. For 44 cents you can stick an envelope on your front porch and have it show up all the way across the country in a couple of days.

I've mailed something like 800 packages over the last several years, and had hundreds more mailed to me, and not ONE of them has gotten lost. Even during Katrina, when one of my outgoing boxes seemed to have gotten lost, it showed up (28 days after I mailed it)

It's a shame the PO is going the way of the dodo bird, but they just don't have a viable business model in today's world. I can't see that ANYBODY is going to fix the systemic problems other than by reducing service. I hope they can hang on.

 

[WhoWee]

Maybe they should sell all of the new delivery vehicles and let the carriers use tricycles?
Here's a nice electric "hybrid" - for $1,000.
http://www.toptoysplus.com/E-Wheels-EW-54-LA-Trike-Red-p/bg-ew-54-la_red.htm

They could save about $1,500 (per vehicle) the first year on the maintenance alone.
http://www.gao.gov/products/GAO-11-671T

 

[Ivan Seeking]

Huh? The post office? What do they do?

They deliver DVDs for Netflix. Duh!

End the individual home delivery and go to community mailboxes as is done in apartment buildings. This has been done for some time in newer neighborhoods and business complexes. In my sister's neighborhood, each block has its own delivery point. Each community mailbox station could displace fifteen to thirty individual home deliveries.

Exemptions could be made for the disabled and other hardship cases.

Then, farm out the neighborhood station deliveries to UPS.

 

[Evo]

They deliver DVDs for Netflix. Duh!

End the individual home delivery and go to community mailboxes as is done in apartment buildings. This has been done for some time in newer neighborhoods and business complexes. In my sister's neighborhood, each block has its own delivery point. Each community mailbox station could displace fifteen to thirty individual home deliveries.

Exemptions could be made for the disabled and other hardship cases.

Then, farm out the neighborhood station deliveries to UPS.

It's amazing that so many parts of the country still have door to door delivery.

That's a luxury we can can no longer afford. Heck where I live now, the mailboxes are next to the manager's office (4 blocks from me).

 

[Pengwuino]

They deliver DVDs for Netflix. Duh!

End the individual home delivery and go to community mailboxes as is done in apartment buildings. This has been done for some time in newer neighborhoods and business complexes. In my sister's neighborhood, each block has its own delivery point. Each community mailbox station could displace fifteen to thirty individual home deliveries.

Exemptions could be made for the disabled and other hardship cases.

Then, farm out the neighborhood station deliveries to UPS.

OH the Netflix Guy! :D

It's amazing that so many parts of the country still have door to door delivery.

That's a luxury we can can no longer afford. Heck where I live now, the mailboxes are next to the manager's office (4 blocks from me).

Seriously, how long did we figure this was going to keep up? We should just cut USPS loose to operate like a real business. At the least it'll accelerate everyones move to on-line banking and bill paying and reduce the paper waste. I mean, in the world of the internet and fax machines, do we seriously need to physically send 90% of things 2000 miles so someone can read it?

 

[mege]

They deliver DVDs for Netflix. Duh!
End the individual home delivery and go to community mailboxes as is done in apartment buildings. This has been done for some time in newer neighborhoods and business complexes. In my sister's neighborhood, each block has its own delivery point. Each community mailbox station could displace fifteen to thirty individual home deliveries.

Exemptions could be made for the disabled and other hardship cases.

Then, farm out the neighborhood station deliveries to UPS.

http://seekingalpha.com/article/205559-how-u-s-postal-service-s-struggles-could-impact-netflix I wonder how much they've been helping to keep the USPS relevant for many? Also, I wonder how much the decline of Netflix due to the recent pricing changes will affect the USPS?

 

[ParticleGrl]

It's amazing that so many parts of the country still have door to door delivery.

That's a luxury we can can no longer afford.

You are saying the richest country in the world can't afford a postal system? Really? Who can afford such a "luxury?"

Netflix is 1.3% of the USPS first class mail. I wonder how much they've been helping to keep the USPS relevant for many? Also, I wonder how much the decline of Netflix due to the recent pricing changes will affect the USPS?

I'd say at most it could effect about 1.3% of the post offices first-class mail revenue?

 

[DoggerDan]

Huh? The post office? What do they do?

You're required to file all your posts with them for their approval before posting. Costs about $0.45 each, and if you don't, they're worse than the IRS chasing you down to collect back payments, penalties, and interest on everything.

The delay isn't long, only about 3 to 10 business days.

OH the Netflix Guy! :D

Same here. I get about five things a year in the mail that I need, want, and expect to receive in the mail, not counting Netflix Blu-rays. I get at least two of those a week, and I'm loving it.

Seriously, how long did we figure this was going to keep up? We should just cut USPS loose to operate like a real business. At the least it'll accelerate everyones move to on-line banking and bill paying and reduce the paper waste. I mean, in the world of the internet and fax machines, do we seriously need to physically send 90% of things 2000 miles so someone can read it?

I'm amazed at how much junk mail keeps being sent by US Mail. They comprise 90% of the mail I receive, either by volume or weight. If the USPS is hurting, there's your culprit. Charge 'em what it actually costs to deliver all that crap. I'm willing to bet half of that crap would go away, and businesses would realize it didn't do much for their business anyway.

 

[OmCheeto]

Does anyone remember the Canada Post strike?

http://www.csmonitor.com/World/Americas/2011/0623/Canada-Post-strike-Residents-ask-if-they-really-need-a-postman"

...
“If I get my mail, I get my mail, but if I really have to do something I go on the Internet,” says Janina, a bank teller.
...

About the only thing the USPS delivers to my house anymore is paper to be recycled. Which for me is ok, since I have a wood-stove, and I think I heat my home for about a month in the winter from what I collect in the big box in the corner during the summer.

 

[DoggerDan]

I had a thought: Reduce delivery days to one of the following options:

1. Mon and Wed
2. Mon and Thu
3. Tue and Thu
4. Tue and Fri
5. Wed and Fri

By spreading these out evenly, it would reduce the miles USPS has to travel by more than 50%, as well as the time they spend traveling those routes.

As for objections on the volume, simply cancel advertising/business, and bulk rates on mail. That would force most folks to drop the tree-burning waste.

 

[KingNothing]

I would be completely unopposed to a more central mail system whereby they just deliver it to the post office location. Then people can go and pick up their mail.

 

[Vanadium 50]

The problem is not that the Post Office has too much to do - and therefore must curtail deliveries - but too little. The mail volume, and thus revenue, have fallen, but payrolls have not, and cannot.

As far as picking up one's mail at the post office, I would be opposed to it. There are at least four post offices closer to me than "mine". In the town I am living in now, the post office on the east side of town delivers mail to folks on the west side, and vice versa. So it's inconvenient for everyone.

 

[WhoWee]

The problem is not that the Post Office has too much to do - and therefore must curtail deliveries - but too little. The mail volume, and thus revenue, have fallen, but payrolls have not, and cannot.

The new union contract INCREASES payroll by 3.5%, allows a 30 hour week to be considered "full time", and guarantees 40 to 44 hours per week to some. This agreement was ratified in May 2011 and extends until 2015. How can a Government entity losing over $8Billion per year (that owes a $5Billion benefits payment) be allowed to enter into such an agreement without Congressional approval in advance? The hands of reformers are tied before the discussion begins.

 

[Vanadium 50]

It's nice work if you can get it.

 

[WhoWee]

Perhaps the (general delivery - junk mail) home delivery should be outsourced to the local newspaper carriers - they work cheap? It would keep them afloat and allow the USPS to greatly reduce staffing - perhaps use the same people to sort mail 3 days per week and deliver 2 days per week.

 

[Borek]

If not for the fact that thread subject clearly states "US" I would think we are talking about Polish Post. Surprisingly similar problems.

 

[turbo]

USPS should move aggressively to close all the tiny satellite POs and consolidate services to larger offices. In one town near here (Fairfield), there are tiny PO locations, each with a postmaster, serving the villages of Hinckley, Shawmut, and Fairfield Center, all of which are located in Fairfield. The last closure in that town was about 30 years ago when the PO serving the village of Larone was shut down. 4 offices in one town is a bit much.

 

[jtbell]

First, many of the mail-sorting centers need to be consolidated. The sorting and distribution infrastructure was designed and built during the days of much higher mail volumes, and is running far under capacity now. (These are separate from the retail post offices where you go to buy stamps, etc.)

Second, residential deliveries could be reduced to three days per week, in two shifts. Half of all homes would be served on Monday, Wednesday and Friday, and the other half on Tuesday, Thursday and Saturday. This would cut the number of residential mail carriers in half. The carriers who are still working would work the same number of days, but serve different routes on alternate days.

Business deliveries could still run six days per week, either by assigning certain carriers to daily business-only runs, or by putting each business on two (alternate-day) delivery routes.

Third, postage rates should rise significantly. Our standard letter rate is cheaper than in most other countries, at least the industrialized ones. In next-door Canada, the standard domestic letter rate is CAD 0.59, which is almost exactly the same in USD, and about 1/3 higher than our own letter rate of USD 0.44.

perhaps use the same people to sort mail 3 days per week and deliver 2 days per week.

All (or almost all) sorting is now done in large Processing and Distribution Centers (P&DC) that are separate from the local post offices that the carriers are based at. For example, I think the P&DC in Greenville SC serves all of upstate SC except maybe the area just over the state line from Charlotte NC.

From http://en.wikipedia.org/wiki/United_States_Postal_Service#Sorting_and_delivery_process

At the destination P&DC, mail is once again read by a DBCS [Delivery Bar Code System] which sorts the items into their local destinations, including grouping them by individual mail carrier.

At the carrier route level, 95% of letters arrive pre-sorted;[80] the remaining mail must be sorted by hand.

(emphasis added by me)

So, very little sorting actually occurs at local post offices.

 

[WhoWee]

USPS should move aggressively to close all the tiny satellite POs and consolidate services to larger offices. In one town near here (Fairfield), there are tiny PO locations, each with a postmaster, serving the villages of Hinckley, Shawmut, and Fairfield Center, all of which are located in Fairfield. The last closure in that town was about 30 years ago when the PO serving the village of Larone was shut down. 4 offices in one town is a bit much.

One of the major considerations will be real estate - owned or leased (and specific terms). We have 3 post offices within a 10 minute drive. One is located in a commercial storefront and the other 2 are the tiny satellites you've described. One could assume the storefront costs more to operate than the satellites - but perhaps the satellite locations could be sold at a fair market value rate? It might be reasonable to use some of those units as self serve/pick up locations?

 

[mheslep]

USPS carries mostly junk mail now. Less than 10% of the load is home to home, 'real' mail. It has become obsolete. Go to one day a week delivery now, and then later kill it off.

 

[Greg Bernhardt]

USPS carries mostly junk mail now. Less than 10% of the load is home to home, 'real' mail. It has become obsolete. Go to one day a week delivery now, and then later kill it off.

True, I check my mailbox once a week and throw 90% of it away.

 

[jtbell]

Most of our mail consists of:

• Solicitations for donations (charity, political, etc.)
• Solicitations from credit-card companies
• Solicitations from Dish, DirecTV, Charter cable and AT&T
• Solicitations from auto insurance companies

We still get some useful stuff:

• Financial statements (credit cards, banks, medical bills, etc.)
• Magazines (yes, we still read printed magazines)
• Christmas cards etc.
• Small packages of DVDs, etc. (OK, these could have gone via UPS or FedEx)

I do most of my banking, credit cards and investments online, but I still like to get printed statements as a backup in case I get locked out of online access to an account because of a screwup in their security procedures. A couple of years ago, one of my credit cards refused to let me log in, even after two or three sessions with a customer service rep over the phone. I've been paying that one by mail ever since. Nothing suspicious ever showed up on my statement, so it wasn't a matter of someone hacking into my account.

 

[Vanadium 50]

and allow the USPS to greatly reduce staffing

That's what I keep trying to tell you. The USPS is not allowed to reduce staffing, except by attrition. They have to pay their staff whether they have work for them or not. So all these great ideas on how to improve efficiency won't do beans.

Expenditures are (approximately) fixed, and revenue is falling. That's why the USPS is in trouble.

 

[turbo]

Most of our mail consists of:

• Solicitations for donations (charity, political, etc.)
• Solicitations from credit-card companies
• Solicitations from Dish, DirecTV, Charter cable and AT&T
• Solicitations from auto insurance companies

Same here, though I should add that once a week we get a bulk-mailed packet containing identical flyers from two local Associated Grocers-affiliated stores, flyers from two chain supermarkets and usually flyers from WalMart, JC Penny, etc. When those bulk-mailings come out, my niece (who is our rural letter-carrier) generally runs late on her route because she has to stop at every single mailbox, not just the ones that are receiving real mail or have the flag up to indicate outgoing mail. Those flyers are useless to my wife and me, other than alerting us to a sale on food products that we usually buy anyway. I can't burn them in my wood stove because they are printed on coated paper, which burns poorly and leaves lots of ash in the stove. About once a month, I take a very large leaf bag of such useless paper to the town's recycle center. What a waste!

 

[daveb]

That's what I keep trying to tell you. The USPS is not allowed to reduce staffing, except by attrition. They have to pay their staff whether they have work for them or not. So all these great ideas on how to improve efficiency won't do beans.

Not only that, but Congress is the only entity that can authorize the closing of postal offices (according to an NPR report I heard on the way into work this morning).

 

[jtbell]

The USPS is not allowed to reduce staffing, except by attrition.

I agree, something has to be done about that. A "no layoff" contract is workable only if there is enough attrition that it can be used to adjust staffing downwards when necessary. The USPS is clearly not in that position. I suspect the solution will probably have the USPS declaring bankruptcy so it can tear up its contracts and reorganize as a new, reduced-size entity. I don't know how its legal status (neither a government agency, nor completely private) would influence this.

 

[WhoWee]

That's what I keep trying to tell you. The USPS is not allowed to reduce staffing, except by attrition. They have to pay their staff whether they have work for them or not. So all these great ideas on how to improve efficiency won't do beans.

Expenditures are (approximately) fixed, and revenue is falling. That's why the USPS is in trouble.

I understand the ramifications of the new union contract - extended until 2015. It's hard to believe the negotiations were considered in "good faith" - given the financial condition of the USPS and the need for supplemental funding. The last time I checked, the Postmaster General (or whomever signed off) didn't have the authority to obligate the US Government to borrow money.

 

[mheslep]

True, I check my mailbox once a week and throw 90% of it away.

Yes that's not just my guess, that's a published statistic somewhere, GAO or USPS.

 

[WhoWee]

I just met my mailman at the curb. He was wearing a (not a uniform) grey t-shirt and jeans - was talking on a Blue Tooth headset. He drives a regular mail delivery vehicle - but I'm on a rural route - must be a different dress code?

He handed me 4 pieces of mail - 2 of the 4 pieces belonged to other people (2 other people that lived on 2 different streets) - neither of their house numbers matched mine.

 

[russ_watters]

So...across political and international lines, it kinda sounds like everyone agrees with the idea that the USPS should function basically like a business. Ie, it should be fully self-funded, including actually funding its pension program. Am I seeing that right?