E-Commerce's Biggest Obstacle May Be Slow Postal Services (thestreet.com)

Long-time Slashdot reader rudy_wayne writes: J.C. Penney CEO Marvin Ellison recently said that e-commerce companies' biggest challenge is that they are all expanding their businesses and pushing for faster delivery, but UPS, Fedex and especially the United States Postal Service aren't able to keep up, at least not at same cost that exists today, because they're not increasing their delivery capacity at the same rate e-commerce is growing, He said this will cause a supply and demand issue "that's going to be apparent here pretty soon."

Comments

Capacity or Cost?

[Drethon]

For a long time the US postal service has been losing money, they posted a 5.6 billion loss in 2016. I think they would be more than happy to grow their service but can they grow in a way that is profitable for the USPS that doesn't cost more than e-commerce is willing to pay?

Re:Capacity or Cost?

[Nidi62]

For a long time the US postal service has been losing money, they posted a 5.6 billion loss in 2016. I think they would be more than happy to grow their service but can they grow in a way that is profitable for the USPS that doesn't cost more than e-commerce is willing to pay?

Well, once they have their pension fully funded for the next 3 generations as legally mandated by Congress they will probably have enough money to expand capacity. Of course, growth=more workers=more pension, so they would probably have to fund that as well which would slow their growth.

Re:Capacity or Cost?

[zenasprime]

They are incompetent dickbags who do their best to only hire the dumbest people on the planet. Their autorouting system is so pathetic that it creates routing loops that can only be broken by deliberate human intervention. Their hours are garbage that robs the nation of productivity by expecting people to run their errands at the same time that their employer expects them to work. They suffer no penalties for failure, and there is no accountability. Every single package is scanned and the data handed to the government as part of the spying-on-citizens program.

It's like you've never actually had a package delivery attempt by FedEx or UPS. lol

Re:Capacity or Cost?

[Anonymous Coward]

The USPS depends on a certain percentage of spam to exist.

That's the fallacy that is killing the Post Office. Every day they deliver billions of pieces of junk mail at a loss. It's like the old joke, "we lose money on every sale but we make it up with volume". Except the Post Office doesn't get the joke.

A truck full of junk mail, at 13 cents a piece, uses the same amount of fuel, and the driver gets paid the same wages, as a truck full of first class mail at 49 cents a piece. End the subsidy for junk mail. The volume of mail will go way down, the Postal Service would need fewer people, trucks, etc., and there would be an enormous savings of time and money because the Postal Service would be in the business of delivering only the mail that people actually want, rather than truck loads of crap that nobody asked for.

They most likely still wouldn't be profitable, but, they would be much better and more efficient than they are today.

They also wouldn't exist without the deal to take small packages from UPS and FedEx. Without a federally-granted monopoly on delivering to your mailbox, the USPS would have gone away already,

Private companies want nothing to do with mail delivery. Delivering mail to *EVERY* address, from the biggest cities to the most remote rural areas, is very difficult, maybe impossible, to do profitably *AND* at a reasonable cost.

But that's OK. Your local police and fire departments don't generate any profit either and nobody is clamoring to shut them down. They just need to be run reasonably with a minimum of waste and inefficiency.

Re:Capacity or Cost?

[Anonymous Coward]

I would like this rule extended to the entire government, as we are sitting on a liability time bomb

I would like this rule extended to private corporations.

Re:Capacity or Cost?

[Wycliffe]

I would like this rule extended to the entire government, as we are sitting on a liability time bomb

I would like this rule extended to private corporations.

I agree completely. Unfunded pensions are a ponzi scheme that should have never been allowed. Whether it is Social Security, police officers, a car manufacturer, etc... promising to pay retirement out of future revenue is a disaster waiting to happen. Places like Detroit show what happens when your population shrinks and you no longer have the tax base to support your future obligations. Same with private corporations. They can go out of business, downsize, etc... and if their profit or workforce shrinks, there is no way they can fund those future obligations. At the very least, future obligations need to be on the book as debt owed so that if they go bankrupt, the retirees have equal footing to other creditors. I live in Missouri, and our public school teachers have a fully funded pension. My grandma actually gets raises when they have too much money in their pension fund. If school teachers can do it then other government and private businesses should be able to do it too.

Re:Capacity or Cost?

[Geoffrey.landis]

In short, no. The USPS depends on a certain percentage of spam to exist. They also wouldn't exist without the deal to take small packages from UPS and FedEx. Without a federally-granted monopoly on delivering to your mailbox, the USPS would have gone away already, and good riddance.

You just told me that the USPS delivers to people to whom UPS and FedEx don't deliver.

I think that's a valuable service, actually.

Basically, your post says that UPS and FedEx take their profit by delivering to the easy customers, and they use the post office to deliver to the hard ones.

Re:Capacity or Cost?

[Hardhead_7]

The main problem with the USPS is that Congress has them operating as a semi-business, semi-public service. That is to say, Congress has told them "act like a business, and turn a profit." But they won't let the Post Office do the most basic of business-like things: set prices.

They can't raise stamp prices, they have draconian rules imposed on them about pension funding, etc. Now, I'm not against Congress artificially keeping stamp prices low - we can view that as a public service similar to roads (we don't expect the Highway Department to turn a profit). But we need to pick one or the other - either is a "government business" and needs to run like one or a public service where we expect a loss for public good. Asking for both gets us dysfunction. It's amazing the USPS is as good as it is, all things considered.

Re:Capacity or Cost?

[Wycliffe]

> Unfunded pensions are a ponzi scheme that should have never been allowed.
I think there's a middle ground between fully funded and unfunded. Or maybe companies should be forced to buy "pension insurance." :)
Or maybe it's just something we should have the government do (ie, Social Security).

Social Security is no better. It's also unfunded. It pays out benefits using current revenue. I see no benefits of an unfunded pension. What are the benefits of an unfunded pensions? It's an unlisted IOU (aka liability) for whoever is promising it. It's a way to promise to pay someone more without actually paying them. A fulled funded pension also has the advantage that a person would have the option of taking the extra cash instead of the pension. The only advantage an unfunded pension has is the hope that future revenue is greater than current revenue. This is a horrible assumption that likely only holds true 50% of the time at best.

Re:Capacity or Cost?

[140Mandak262Jamuna]

Yes, there is a Pension Benefit Guarantee Corporation. Companies must buy the policy for defined benefit plans. It maxes out at some 45K a year. Some airline pilots pensions are in the range of 145K.

The problem is, use the rosy projections on good years to show their pension obligations are "overfunded" and withdraw the cash, distribute it as bonus among the top executives. Then on the next year when the returns are lower, they feign ignorance, "omg, it is underfunded, so you pensioners are dragging the company down. we cant fund it. We will go bankrupt and you lose it all. So accept these lower terms". They have been raiding pension funds, built up over 40 years. From 1950 to 1990. They raided them all through the 90s. And converted all the defined benefit plans to defined contribution plans. Except government, there are very few defined benefit plans exist in usa today.

Re:Abolish the USPS

[CanadianMacFan]

Because the private couriers have never had bad employees. /s

Re:You know how many of them can solve that?

[hackertourist]

The whole point of e-commerce is to not have to go to the bloody store!

reinventing Social Security [Re:Capacity or Cost?]

[Geoffrey.landis]

However, what this says is maybe benefits should not be part of your job at all so that companies don't have to deal with this stuff and we can deal with it at a societal level where that is cheaper and more effective.

Hmm-- interesting idea. We could have a government-mandated plan that provides some sort of minimum benefits, which everybody pays into as part of their job, and that could be like a "safety net" applying to all employees, so they're not destitute even if their savings get drained and their company goes bankrupt. And then, companies could also offer benefits beyond this minimum, a "retirement plan," if you will, so people who worked for that company would have an income that's more than that safety-net minimum when they retire. A two-layer plan. The minimum plan would just be be security, be part of the overall social structure.

Say, we could even call it that: "social security." Good name!

"Esp the USPS"

[whitroth]

Right. Who first was semi-privatized (and Founding Father Ben Franklin, first Postmaster, is spinning in his grave), and then the GOP doesn't want to fund it well enough that they've been cutting back hours and delivery. Same as Amtrak.

The GOP: Government doesn't work... because we make *SURE* it doesn't.

Doesn't have to be this way

[tgrigsby]

The USPS could build out the necessary infrastructure and at a lower cost than Fedex and UPS, if the GOP would just stop trying to kill them off. And let's be honest, it's Fedex and UPS lobbyists providing the incentive to pass crap legislation like this. Their entire drive is to hamstring the USPS, because they can't compete long term against a non-profit government agency like that unless they can buy legislation forces the USPS prices up and limits the services that can be provided.