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USPS Losing Battle Against the E-mail Age

Posted by Soulskill on from the think-of-the-circulars dept.

An anonymous reader writes "An article in the NY Times explains how the United States Postal Service is in dire financial straits, and will need emergency action from Congress to forestall a shutdown later this year. Postmaster General Patrick Donahoe said simply, 'If Congress doesn't act, we will default.' Labor agreements prohibiting layoffs are preventing one avenue for reducing costs, and laws forbidding postage rates from surpassing inflation rates keep income down. On top of that, the proliferation of e-mail and online bill-paying services have contributed to a 22% reduction in snail-mail volume since 2006. They're currently hoping for legislation that would relax their economic requirements and considering an end to Saturday delivery."

6 of 734 comments (clear)

  1. an engineered crisis by Anonymous Coward · · Score: 5, Informative

    Strange that /. is missing the real crux of the problem; a bad 2006 law:

    >In 2006, Congress passed a law requiring the Postal Service to wholly pre-fund its retirement health package – that is, cover the health care costs of future retirees, in advance, at 100%.

    most organizations are allowed to fund retirement and pension funds in a graduated manner that provides funding at the time of need rather than decades in advance. Its almost like this crisis has been engineered...

    Source:
    http://news.blogs.cnn.com/2011/08/18/is-benefits-law-dragging-down-the-postal-service/

    1. Re:an engineered crisis by Chowderbags · · Score: 4, Informative

      This really is the single largest problem that the USPS has. They basically have to pre-fund 75 years of retirement benefits and they were only given 10 years to do it. There is no other business or government agency that has to do anything even remotely similar to that and without that their financial situation would be impeccable.

  2. Re:Battle? by halowolf · · Score: 4, Informative

    Well the USPS should come to Australia and see what Australia Post is doing. They saw the writing on the wall, and took steps to adapt to the internet age and keep themselves relevant by doing all they can to get themselves into the delivery chain for the influx of packages being sent to compensate for the decline in letters et all. Plus they offer so many services (government and private) to get people into their stores.

    The only real problem is that this can lead to a little more junk mail as businesses pay Australia Post to deliver their junk instead of private contractors.

  3. Re:It's true by devotedlhasa · · Score: 5, Informative

    Congress and the Bush Administration passed the 2006 PAEA law which forced the USPS to submit over $5 billion a year in trust fund payments. This trust fund serves the purpose of transferring federal deficit to the USPS and artificially lowering the government's accumulated debt. This is really a story about bad government policy and not about how technology is replacing the need for a post office.

  4. Re:Do your part! Snail-mail your comments! by hedwards · · Score: 5, Informative

    In cases like that you send a registered letter to the agency requesting proof that you owe the debt. That will stop them dead in their tracks, especially given that lately even legitimate mortgage debt often can't be proven to be owed to the party wanting to collect.

  5. Another Bush Presidency casuality by Frankie70 · · Score: 4, Informative

    The real reason for USPS problems is not e-mail or online bill pay. The real reason is the Postal Act of 2006 which requires USPS to pre-fund 80% of future retiree health-care obligations by 2016. This costs USPS 5.5 billion $ per year. If not for this, USPS would have shown a 600 Million $ profit over the last 4 years.

    None of the USPS competitors (or for that matter any other company) has this burden. It's very likely this was lobbied for by USPS competitors - No lobbyist left behind.