The Check Is In The Mail

Most here have heard about the insolvency of the USPS and its need for a federal bailout by the end of the month. What’s interesting about the USPS and its inability to compete and thrive is that it is plagued by those same symptoms that makes most government programs stodgy and un workable, namely , inefficiency, bloat, unable to compete in the market place, antiquated business model and equipment, and union protected workers who are in no fear of consequences for poor work production. This is not to say that all postal workers are deadbeats, but it does foster an environment where, unlike the private sector, there is no incentive or motivation to excel, no reward for individual achievement.

In the past that federal safety net has allowed the USPS to keep doing that they’re doing regardless of the losses piling up, but in the next few weeks, somebody will blink:

Facing a projected $6.4 billion loss this year, the United States Postal Service may be forced to shut down this month if Congress doesn’t take action.

A cushy relationship with the postal workers unions and flailing efforts to stem customer migration to the Internet have pushed the Postal Service to the brink of insolvency. The NYT reports that the agency will be unable to make to make its $5.5 billion payment to its employee healthcare plan by the Sept. 30 deadline.

The two factors that weigh the heaviest and are guaranteeing the USPS to fail are these:

Eighty percent of the Postal Service’s annual budget goes toward employee salaries and benefits.

We don’t need to look for the union label here. When your competitors do not have your overhead and can provide the same service cheaper, you are in trouble. Although no one is asking the USPS to run itself like a business and make a profit, to break even would be nice, can’t do it when you are not allowed to trim your staff or pay them what the market demands.

Despite the agency’s economic woes, the 250,000-member American Postal Workers Union negotiated a cushy labor deal with the USPS in March.

Here is the house that fell on you. Who ever it was on the government’s side that signed off on this little extortion package, images of a woodshed come to mind.
We have talked about unions before and how it is their job to get the best deal possible for it’s members, but this assumes that the other side will at least put up a fight and negotiate, this was no negotiation, it was a mugging. The annual raise provision was insulting given that many government workers are taking pay cuts in an attempt to keep their job, but this “no layoff” clause, holy smokes, who would buy off on such nonsense?

Given the illustrious history of the postal service who’s very existence is authorized in The Constitution (Article I, Section 8, Clause 7) and how I still use it from time to time (monthly bills paid online but unusual stuff like a doctor bill) I don’t wish the demise the USPS. But neither can I continence endless year after year bailouts to prop up an entity that would have gone tits up years ago if left to free market survival. Closing some branches and eliminating Saturday service, is a nice first step. Allow the government to break the union contract and terminate 20% of the work force like it wants to do. Re negotiate salaries and benefits. Other union members are shouldering a bigger portion of their retirement and medical coverage costs, you guys can to. No more bailouts for poorly run government agencies, what happened to that era of austerity I heard about?

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  1. Hal_10000

    USPS is as much a victim as anything. Congress won’t let them raise rates to the level they need to function, won’t let them cut services and won’t let them close post offices in small towns. They’re the Fannie Mae of mail.

    End their monopoly to allow competition and allow them to make the decisions they need to profit. If rural mail service is that important, subsidize it honestly rather than pretending this is a business.

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  2. TxAg94

    Just got my mail. Same as 4 days out of 6, approximately: all junk. One way of saving some additional bucks might be to allow residents to “opt-out” of items not directly addressed to them. Most days that would allow the postal employee to drive right on by. This is not unlike email spam, in my opinion.

    Unfortunately I think rural America is still one of the segments that depends on mail delivery more than the rest of us. Yes, an awful lot of them are wired with internet access. But a great many are plain old farmers and/or poorer people who still get a lot of mail. I have nothing to base that assumption on, just a feeling. They are also the ones for whom delivery costs the most.

    I am in favor of a rate increase since I mail very little and it is absurdly low. I have been pleased with the flat rate box offerings and use it as often as I can. It is usually much cheaper than the same delivery by UPS or FedEx. I would like to see them get some realistic box shapes, though.

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  3. Poosh

    pfff, we call our version the Royal Mail… sadly it’s pretty shoddy, and does not entail a unit of armed knights taking your mail to and fro, as the name might imply.

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  4. Mississippi Yankee

    We get almost no junk mail here in this small Mississippi town (town pop. 2100 though postal area much larger) maybe a flyer from “Fred’s Dollar Store” once a month.

    What we do have (until this week) was a postman that drove a little right hand drive postal truck. He would stop and do 4 or 5 houses then move on up the street or next block. But yesterday and today, I noticed, a full sized GMC pick up truck stopped, the mailman got out of the passenger side (while driver sat idling) delivered the same 4 houses as always, got back in the cab and moved on up the street.

    WTF? Are two full time employees and a full sized truck somehow more cost effective that what we already had? BTW little postal truck still parked, as always, beside Post Office.

    If rural mail service is that important, subsidize it honestly rather than pretending this is a business.

    Hal, postal service is covered under the constitution, star gazing, not so much. Be careful what you wish for, cuts will have to come from somewhere pal.

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  5. Miguelito

    One way of saving some additional bucks might be to allow residents to “opt-out” of items not directly addressed to them.

    I don’t think that would help, and would actually make things worse. It’s my understanding (possibly wrong, but I’m sure I heard/read this somewhere) that the bulk mail is really the bulk of the income they do get.

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  6. AlexInCT

    You are correct sir. The USPS these days makes most of its money from the mail most of us would prefer not to get. Most people don’t write letters that need to be mailed by snail mail anymore thanks to Al Gore’s invention.

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  7. TxAg94

    Then why are we fighting to keep the mail service? If they rarely deliver anything me need or want then we’re hanging onto it for nostalgia. Instead of killing it off from small towns let’s find a way to eliminate it from large cities. Keep it where it’s needed, if that’s small, rural communities.

    The few things I get by mail that I need I’m sure I can find a way to get that electronically.

    I do think the package delivery could be salvaged in some way and be a valuable alternative to UPS/FedEx. Then again, maybe it’s so attractive to me cost-wise because their losing money to deliver my package cheaper than UPS/FedEx.

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  8. Mook

    USPS offers a lavish pension plan. If I’m not mistaken, postal inspectors, at least in the not too distant past, were able to retire young in their late 40’s with pension benefits starting the day they retire. When they reach SS age, many/most of them get SS in addition to their USPS pension. Regular postal workers used to be able to retire after 25 years with pension benefits no matter what their age. If there are changes to that plan, they’ve occurred only recently.

    When considering pension benefits, I’ll bet foot-dragging USPS workers are paid considerably more than FedEx workers who hustle their asses off.

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