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USPS Losing Battle Against the E-mail Age
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."
For at least 15 years I've been hearing that various postal services all over the world are "losing battle against e-mail age" while in fact that scary "e-mail age" (or Internet age, as I would call it) should be the best thing they should hope could possible happen. Never before in human history we were buying so many goods from remote locations all over the world to be delivered by ... postal services! And now they want an end to Saturday delivery? They should start Sunday delivery. They missed the opportunity to start the biggest online payment system in the world so they should at least focus on being the best at delivering good bought on the Internet, not being worse still.
The "proliferation of e-mail and online bill-paying services" should have been started by USPS because they already had the infrastructure to do that and the client base. If back in the nineties everyone paying bills at USPS were told that they could do the same faster, cheaper and more conveniently at USPSpal.com then people would do that. The problem is not that the world is not friendly to postal services but that they don't want to change. They missed the train and now they want our help to survive. This has never worked in the long term before.
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The USPS is losing a long, drown-out battle against the impossibility that it's supposed to be both an unsubsidized "private-sector" corporation that's "run like a business", but also is micromanaged by Congress and not permitted to make sane business decisions. They are required to deliver six days a week; have exact stamp prices down to the penny for many services mandated by Congress; are required to provide certain extra-subsidized services, e.g. cheap shipping at "media mail" rates; are not permitted to levy surcharges for delivery to expensive locations (e.g. remote areas); and they even have their pension plan micromanaged by Congress, which is one of the current cash-flow pressures (Congress changed how the pension accounting has to work).
Basically Congress needs to decide if the USPS is going to be a government-mandated service that delivers flat-rate mail to every corner of the country six days a week, and subsidize it accordingly, or if it's going to be a private-sector business that will neither be subsidized nor micromanaged.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
A postal service is simply too important not to have, just like the roads. It is necessary for the smooth running of a country to be able to reliably move physical goods from one point to another in a moderately expedient and cheap fashion. It is so important that the very basic service should be run by the government.
Has the US government done anything to actively sabotage the USPS?
I know that in the UK, the Royal Mail has been sabotaged to the point of being unable to opeate profitably. The Royal Mail has been forced to outsource the only profitable part of mail, which is the bit where you take letters and charge people for the privelige. As a result, there are suite a number of companies who rake in vast amounts of money doing the easy bit. The hard bit is the sorting and delivering which the Royal Mail still has to do and is legally not allowed to charge very much for. In a sane world, the latter part would be funded by the former part. But the government has managed to separate the two so that the Royal Mail simply cannot turn a profit so that it can then be sold off. In general, though mail in the UK is still a profitable venture and the Royal Mail would run itself comfortably if the world was half way sane.
Has the US government done something similar?
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The mail still needs to be moved and processed six (seven?) days a week. Cutting home delivery frequency would save money, but probably a lot less than you think.
Fedex doesn't have a legal mandate to provide service to most addresses 6 days of the week. The comparison isn't particularly useful.
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The problem is (and why I am starting to use epay rather than check+snail mail)... The USPS loses too much stuff
In the four years since I've moved into my current residence, they've lost one mortgage check (eff that, from now on I drop the damn thing off in person), and one electric bill.
That may not seem like a lot, but it is enough for me.
Translation: they aren't losing my service because of competition, rather their own inability to reliably provide their offered service.
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The big problem for the USPS has is that they are required to do whatever Congress says, and prohibited from doing anything else. And, in particular, Congress has its own agenda, so even when the USPS knows what to do, it takes them years to decades to be allowed to make changes. For example, they were recently authorized to change smaller post offices from being dedicated buildings to being a service provided within an existing business - that took YEARS to pass, because congressmen didn't want to lose a "real post office" for their constituents, so the USPS was required by Congress to lose money on hundreds of tiny post offices. And if they need to raise the rates, or streamline operations, they are routinely blocked by Congress, because the voters don't care if the USPS is losing money, but they do care if the rates go up, or if people are laid off. Ideally the Congress should give the USPS more autonomy, to be able to manage itself without Congress imposing political concerns.
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... and you think dropping a check off in person will help?
My (previous) mortgage company deposited my mortgage check... and I have no idea whose account got credited for it, but it wasn't mine.
The check cleared, I marked it as such in my bank book, and the only clue something was wrong was when I went from 0 bill collector calls (since I pay all my bills on time) to 4 in one day all about my mortgage. Even after I opened a case, and they started investigating, AND finally credited me back, they STILL had the hounds calling me.
I had to tell them the next call was going to my attorney before they stopped.
So, even dropping that check off in person won't necessarily help. Mistakes can (and do) happen.
They never did.
But they were always cheaper overall than anything else you listed for physical delivery to the entire country as a whole.
It costs the same to mail a letter anywhere in the US. All the other carriers you listed do not flat rate, and will refuse to deliver to places that aren't profitable.
Everyone in the US can get a letter from the US postal service regardless of where they are. If they've got an address (so any private property and most public parcels) they can get postal drops. But they may not be able to get anything else, including an Internet connection.
The USPS is a socialist service designed to ensure that EVERYONE has SOME form of communication, and reliable communication at that. Nothing else offers that, even if you don't realize it because it doesn't effect you.
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In 2006 Bush and the Republicans put a forward funding mandate on the USPS. That payment is due this year, to the tune of $5.5B -- 5,500,000,000.00. Guess how big the shortfall is expected to be in this "crisis."
It's easy to make government fail, just cut revenues below expenditures, then cut expenditures, then repeat -- sooner or later the food isn't safe, the roads fall apart and Medicare can't be sustained any longer. Unfortunately, one party in the U.S. has embraced this as a "policy" of "governance." The other party is full of messaging fail.
-GiH
For mission critical documents like that, yes, I would probably go with FedEx. (Should be noted, however, that FedEx loses stuff too, despite your faith in them.) However, that's not the market I'm talking about. I'm talking about typical bills, letters, small packages, and so forth, that right now are cheap to send via USPS. Right now you can send letters for 44 cents. If FedEx, UPS, and the like were to take over that segment of the market, you can bet your last dollar it won't stay that cheap (at least not for long.) Before you know it, you'll be paying $2 for a first class - level delivery, because the company MUST continually show increasing profits lest they be sued by their stockholders.
Your assumption that "government bureaucracy" can't get anything done is a poor one. They get things done every day, and usually with a high level of quality, just like private industry. In fact, in some segments of the economy, the government is beating the stuffing out of private industry in terms of efficiency. (See Medicare.) Do those programs have problems (fraud, for example)? Sure. Do private industry programs in the same markets have the same issues (like recission, denial of care, poor/slow reimbursement rates, etc.)? You betcha. The difference is that less money goes into overhead with the government program, because it doesn't have to show a profit.
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