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It’s Time to Cancel the Postal Service

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With 650,000 employees, most of whom cannot even be laid off, much less fired, the United States Postal Service (USPS), the federal government's quasi-private, semi-government stepchild, is the largest federal bureaucracy in the land, eclipsing even the 611,000 civilian employees of the Department of Defense, and one of its most expensive and inefficient.

Begun in 1639, when the General Court of Massachusetts designated a tavern as the official drop-off location for overseas mail, the delivery of mail in the Colonies did not become organized until October 1774, when William Goddard, Philadelphia printer and publisher of the Pennsylvania Chronicle, frustrated with the inability of the British-run Royal Post to deliver his paper in a timely fashion, presented his plan for a Constitutional Post to the Continental Congress. The Continental Congress, however, took no action until after the Colonials won the battle of Lexington and Concord, in April of 1775. Goddard's plan was promoted heavily by Benjamin Franklin, until, on July 26, 1775, the Continental Congress appointed Franklin the first Postmaster General, almost a year before the Declaration of Independence was written, and the United States Post Office (USPO) was born.

From its birth in the late eighteenth century, through the nineteenth and well into the twentieth century, the USPO led a storied, if somewhat checkered, existence. In its heyday it adopted the motto, first uttered by Herodotus in ancient Greece: "Neither snow, nor rain, not heat, nor gloom of night shall stay these couriers from the swift completion of their appointed rounds." Renowned worldwide during that period as among the world's most secure and efficient postal services, the USPO began to falter badly at the midpoint of the nineteenth century, despite its monopoly status, established by the Postal Act of 1792.

Complaints of poor, slow service mounted, and the Post Office monopoly began to be challenged by the likes of Henry Wells, founder of Wells-Fargo, and the fabled Pony Express. The USPO's reputation had declined by 1853 to the point where the Los Angeles Star editorialized:

Can someone tell us what has become of the U.S. mail for this section of the world? Some four weeks has passed since it arrived here. The mail rider comes and goes regularly enough, but the mail bags do not. One time he says the mail is landed in San Diego; another time there was so much of it the donkey could not bring it, and he sent it to San Pedro on the steamer–which carried it to San Francisco. Thus, it goes wandering up and down the ocean.

In 1845, Congress passed additional legislation tightening the monopoly laws and establishing greater penalties for private carriers, but the private services continued to flourish, emboldened by the success of the Pony Express, which was founded in 1860. So good was the Pony Express service that even the Post Office began to contract it to carry the government mail.

Government mail service remained erratic well into the twentieth century, and worsened, even as the government tightened its monopoly on mail delivery. Subsidies, begun in the 1800s, escalated, but service continued to decline, exacerbated by the postal unions' ever-growing stranglehold on the Post Office's operations.

As service continued to deteriorate, private carriers flourished. United Parcel Service (UPS), founded in 1907 as the American Messenger Company by a Seattle teenager, James E. (“Jim”) Casey, did so well that its success prompted the Post Office to go into the parcel delivery service itself. In 1912, rural Congressmen, catering to their constituents' desire to have less expensive parcel delivery to go along with the subsidized Rural Free Delivery (RFD) established in 1896, provided the Post Office with yet more subsidies to begin Parcel Post service.

In 1971, in the face of mounting losses and growing competition during the 1960s, Congress "privatized" the US Post Office; established the United States Postal Service (USPS) as a semi-private, government-owned corporation in a vain attempt to reorganize the Post Office and stem the hemorrhaging of taxpayer funds. It didn't work. With very few exceptions, the USPS, has continued to post losses most years since its inception, even as postal rate hikes and cutbacks in service have become nearly annual events.

With the growing presence of private carriers threatening its very existence, the Postal Service began aggressively to attack competitors in the courts, sometimes to the point of ridiculousness:

In 1976 in New York, a pack of Cub Scouts tried to raise money by delivering Christmas cards: Postal Service lawyers ordered them to stop, and threatened the ten-year-olds with a $76,500 fine. A New York Times editorial regretted that the Postal Service's carriers were not as fast as its lawyers.

In yet another vain attempt to compete with the growing roster of private carriers, the Postal Service hit on the not-so-brilliant idea in 1974 of establishing so-called Bulk Mail Centers to expedite the handling of parcels. The result, after spending $1 billion (back when a billion was real money)? The Washington Post, June 11, 1974 edition noted,

The General Accounting Office (GAO) reported that a parcel "mailed the 103 miles from Pensacola to Panama City, Florida, will travel 1536 miles through New Orleans, Memphis, and Jacksonville." A billion dollars was spent to slow down parcel delivery.

Hard on the heels of a $2.8 billion loss in 2008, the Postal Service is projected to lose more than $7 billion of the taxpayers' money in 2009. These enormous losses occurred despite massive infusions of cash from the federal government. According to the USPS 2005 Annual Report, the Service received $3 billion each year in 2003, 2004, and 2005, listed as "Capital Contributions of US Government," yet the Postal Service claims they have received no "subsidies" since 1982. In his annual Statement to the Finance Subcommittee of the Senate Committee on Homeland Security and Governmental Affairs in January 2009, Postmaster General/CEO John E. Potter claimed,

The economic premise of our system, envisioned by the Postal Reorganization Act of 1970, had long been that ever-growing mail volume would produce the revenue necessary to support a mail processing and delivery network that must expand to serve up to two million additional homes and businesses each year. For more than three decades, that business model contributed to the development of a self-supporting postal system, one that satisfied the statutory mandate that it break even over time, and one that has not received an operational subsidy since 1982.

In the same address, Potter admitted that the Service is being crippled by its labor costs, which are literally out of control. The Postal Service pays 80 cents of every dollar of revenue in employee salaries and benefits. This is in sharp contrast to the less than 50 cents paid by both FedEx and UPS. In his address to the Senators, Postmaster Potter indicated that almost 10% of all revenue is swallowed up just in paying for retiree health benefits alone; a payment that, "in 2008 amounted to $7.4 billion – $1.8 billion paid to the Office of Personnel Management for current retirees, and $5.6 billion deposited into the Postal Service Retiree Health Benefit Fund to prefund future premium payments. This cost is expected to be even higher in 2009," according to Potter.

With its costs spiraling out of control, the Service is also experiencing a precipitous drop in its volume, particularly in First Class mail, which is rapidly being replaced by email, instant messaging, and even social networking sites such as Twitter and Facebook.  Online billing and bill payment have nearly eradicated household bill payments by mail, traditionally the mainstay of First Class, the Service's fiercely protected monopoly. For decades now, first UPS and later FedEx and others, have steadily eaten into the Postal Service parcel market by providing faster, more secure and more reliable service than the Service can provide. Private carriers have also chipped away at Standard class, the so-called "junk mail" market segment.

In a very real sense, the Postal Service is a victim of its labor unions. Its two largest, the American Postal Workers Union (APWU), with more than 330,000 members, and the National Association of Letter Carriers (NALC), with more than 300,000 active and retired members, have together sapped the Postal Service of its vitality for decades. According to the Wall Street Journal, Postal workers

…have among the best wages and benefits in all of American life.

Most employees have no-layoff clauses, the starting salaries are about 25% to 30% higher than for comparably skilled private workers, and the fringe benefits are so expensive that the Government Accountability Office says $500 million a year could be saved merely by bringing health benefits into line with those of other federal workers.

Caught between the rock of rapidly escalating costs and the hard place of dwindling demand, there is no evident solution for the Postal Service to rebound and restore its viability. Rather than prolong the agony, and the continued hemorrhaging of taxpayer money, Congress should end the Postal Service's remaining monopoly, open the carriage of First and Standard classes of mail to competitive bids from private carriers, and take steps to begin the task of shrinking the Postal Service to a size more in line with the realities of today's mail communications market.

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About Clavos

Raised in Mexico by American parents, Clavos is proudly bi-cultural, and considers both Spanish and English as his native languages. A lifelong boating enthusiast, Clavos lives aboard his ancient trawler, Second Act, in Coconut Grove, Florida and enjoys cruising the Bahamas and Florida Keys from that base. When not dealing with the never-ending maintenance issues inherent in ancient trawlers, Clavos sells yachts to finance his boat habit, but his real love (after boating, of course) is writing and editing; a craft he has practiced at Blogcritics since 2006.
  • http://www.maskedmoviesnobs.com El Bicho

    Great article due to its balance of history, analysis, and solution. Hope it gets implemented.

  • http://ruvysroost.blogspot.com Ruvy

    I’m sending this article off to my father-in-law, a former letter carrier. I’m curious to see what he has to say. Notice I didn’t pay air-mail or postage to send this message to you. Unless Aksimet deems it as spam, it will arrive in your box in just seconds

  • http://joannehuspek.wordpress.com Joanne Huspek

    I worked there for 12 years and there’s the governmental corruption aspect to consider as part of the “cost of doing business.” I couldn’t stand it. In addition, the Postal Service’s handling of EEO complaints (I had a couple myself) is sadly lacking. However, when you consider the Postal Service also has it’s own police force separate from state and local jurisdictions (the Inspection Service), it’s no wonder all these complaints are swept under the rug.

    As for the unions, they’ve always been in bed with management trading one grievance for another.

    If they go away, I won’t miss it. Right now it sometimes takes days to get a letter across the state. We once mailed paychecks to Kalamazoo and the employees received them two weeks later without explanation of where the letters were for two weeks. (Sunning in St. Tropez maybe?) I could have walked them there faster.

  • http://theugliestamerican.blogspot.com Andy Marsh

    It seems to me that there was a time when unions had their place in our country, I’m not sure that’s the case any more…

    Nice article Clavos, great history lesson too. Thanks!

  • http://mizbviewsfromthetower Jeanne Browne

    I’ve long been a “supporter” of the USPS, because I don’t cotton to the idea of online bill-paying and depend on the delivery of magazines, as well as certain clothing catalogs to make comfortable, orderly choices about how to keep clothes on my back (their websites generally suck). And I’ve always felt that hikes in First Class postage notwithstanding, the USPS was a good and practical and necessary deal for all Americans, especially those of us who are not entirely proficient in and/or comfortable with living/functioning in the cyberworld. However, your excellent description of US Postal history, as well as your sensible proposed solutions, give me much food for thought. I still believe the public needs and deserves a low-cost way to distribute hard-copy communications, from bills to greeting cards, to love letters, etc. But you’ve convinced me that the USPS as currently structured, operated and funded needs both radical improvement and legal competition.

  • Deborah King

    As an employee, I must point out that the USPS does not recieve any funding from the government (NO TAX DOLLARS). We work hard for our money and have a huge responsibility to our customers, many of whom rely totally on our delivery system.

  • Clavos

    Not so, Deborah. In the article, I linked to the USPS’ own financial statement for 2007, which clearly indicates payments from the goverment each of the three preceding years in the amount of $3 billion each. There are also several links which clearly spell out that the USPS has been receiving massive amounts of goverent funding for years.

  • Mark

    …sounds like a bunch. I wonder what that breaks down to per item delivered.

  • Clavos

    Don’t know Mark, but it wasn’t enough, they’re going to lose $7B this FY.

  • Clavos

    Correction to comment #7:

    Year linked is 2005, not 2007.

  • STM

    Mate, if it wasn’t for the US postal service working in close co-operation with Australia Post, who knows where your titfer would be now??

  • Greg Barbrick

    BS

    BS! Give it over to private services and you open the door for evil Bush-ites to crank the prices with no competition. Why did we go through $5 dollar a gallon gas? Was there some actual reason for this profit taking? Zero.

    Sorry, say what you will about Obama. Listen to the Repubs say we are headed into socialism. Bush’s vision ripped this country apart. Don’t even start with something we all trust.

    What’s next? The public library system should go?

  • STM

    Clav, I was able to track said titfer by computer on its journey across the Pacific and then once it got to LA, across the US to Miami.

    At any given time, I could log on and see where it was (or I suspect, where it last was on various legs of its journey as there was no GPS tracker involved).

    I was worried that because Australia Post was involved, it might go the circuitous route via New Zealand, Perth, the Maldives, Johannesburg, Singapore, Buenos Aires, and Port of Spain, but no … they did it properly.

  • Glenn Contrarian

    Clavos – another victim of “if the government does it, it must be done wrong”

    FYI for all, for the VOLUME of mail that is processed, the USPS is by far the MOST EFFICIENT mail service on the planet. No other post service – public or private – comes close.

    Why do no private companies come close? Easy. UPS and FedEx know better than to try to compete with the USPS because they can’t come close to offering the same level of VOLUME-based service for the same price. Give a private company the ball, and I promise you’ll see first-class stamps go to $1.00 each in no time.

    Secondly – and MORE importantly – USPS personnel are paid well. YES, there are those in the USPS who are corrupt, just as within any other human organization, but when the rank and file (and not just the CEO’s) are paid well, AND a sense of patriotic duty is encouraged (“neither rain nor snow…”), one finds a LOT less corruption.

    But if the rank and file are paid significantly less, you WILL see a lot more corruption…as time spent in any third-world country will prove.

    Clavos, you and the other conservatives are victims of the Big Lie, that government is somehow inherently bad and wrong and corrupt. You assume that the lack of a ‘profit motive’ somehow takes away the motivation to do a job well and efficiently. YES, we have to hold our government accountable…but to turn over the function of an agency that is SO central to American business…that would be foolish.

    Last point – American government agencies have the TRADITION of being non-partisan (excepting the Bush administration’s effort to politicize the DOJ, GAO, and others). If you privatize the USPS, you open the doors to partisanship of what is the most important logistical process to great majority of American small businesses.

    Clavos, government’s DUTY is not only to protect the people, but to also enable the safety, surety, and ease of commerce…and such is best done by a NONpartisan agency. Privatization allows partisanship…and no one in their right mind would want something so central to American life as the Post Office to become involved in partisan politics, and partisan business.

  • Clavos

    FYI for all, for the VOLUME of mail that is processed, the USPS is by far the MOST EFFICIENT mail service on the planet.

    A volume which is plummeting in response to the distinct deterioration of service over the past couple of decades. I think that among others, the British and Aussies would dispute your claim as to the efficiency of the USPS vis-a-vis their own services. And they would be right. An organization which receives billions of dollars a year in subsidies and still manages to lose $7 billion in one fiscal year year is anything but efficient, as I demonstrated in the article.

    Secondly – and MORE importantly – USPS personnel are paid well.

    They are not paid well, they are overpaid — as much as 25-30 percent above market rates in their respective job classifications. Again, proved in the article: FedEx and UPS both do a better job than the USPS, spending only fifty cents of each dollar of revenue on labor costs, contrasted with USPS’ eighty cents of each dollar of revenue.

    Clavos, you and the other conservatives are victims of the Big Lie, that government is somehow inherently bad and wrong and corrupt.

    It’s not a “Big Lie” when it’s happening on a daily basis. In addition to the USPS, a shining example of how poorly the government handles our money is Medicare; another is DoD. One has only to look at what we pay for items purchased by the government to see this. You’re the victim of the Big Lie, Glenn — the lie that the government is benevolent and looks out for us.

    You assume that the lack of a ‘profit motive’ somehow takes away the motivation to do a job well and efficiently.

    No. I know that government work rules (especially in the USPS, I worked there, remember?) do NOT hold government employees accountable and engender a myriad of bad attitudes and work habits. The stranglehold the government unions have on various departments is a crime — a crime against the taxpayers, which is exactly why I wrote the article and will continue, with every resource I can muster, to fight for the downsizing of this, the largest and most wasteful of all the government’s wasteful entities.

    but to turn over the function of an agency that is SO central to American business…

    No longer. The private carriers are now handling the bulk of business parcel delivery; email and faxes handle an ever-growing portion of letter mail, online billing and bill-paying are taken a further toll on the bulk of First Class, and FedEx gets the overnight, especially since the USPS service is not guaranteed overnight, yet costs the same. “When it absolutely, positively has to be there”…it goes FedEx.

    If you privatize the USPS, you open the doors to partisanship of what is the most important logistical process to great majority of American small businesses.

    What a canard! What’s “partisan” about FedEx? Microsoft? Ford? And so on — ad infinitum.

  • http://thingsalongtheway.blogspot.com/ Cindy

    government is somehow inherently bad and wrong and corrupt

    Well, it is. The only justification that is possible for people who delude themselves into believing they actually support liberty and individual freedom, is some phony social contract everyone is supposed to have agreed to (without their actual consent!)–a phony social contract based on a shallow, antiquated (therefore uninformed), and misguided speculation about human nature.

    The BIG lie is that somehow the other side of this coin–free market Capitalism–is the real solution or is any different.

    Most people are content to pace their cell, arguing back and forth about which one of these two choices are best–that is what they are taught to do. But a few manage to get free of that cultural straitjacket. And when you are free of that and looking at the argument from outside the argument–it’s like standing outside the loony bin and looking in.

  • PresterJohn

    Pure ideo crap …. postal service is one of the most efficient ‘n cost effective of our gov’t …. and no, I don’t work for it or any member of my family.

  • Clavos

    “postal service is one of the most efficient ‘n cost effective of our gov’t”

    As evidenced by the billions of dollars in losses despite the billions in subsidies, both of which are throughly documented in the article?

  • Glenn Contrarian

    Clavos –

    You know what taxes are? They’re the cost of living and doing business in the country charging the taxes.

    Tell you what – how about taking away ALL of the tax breaks that FedEx and UPS get nationwide, and THEN see how much more ‘efficient’ they really are…because tax breaks are in reality simply another form of government subsidy.

    Also, FedEx and UPS did wonderfully for so many years with small packages, BUT if you’ll actually do some UNBIASED research, you’ll find there’s really two sides to the story. Here’s a discussion between businesspeople about whether USPS or UPS is better…and the conclusions are fairly obvious. Better yet, here’s what Consumer Reports said in their comparison of the overnight shipping services of FedEx, UPS, and the USPS:

    “The Postal Service was the least expensive by far for local and long-distance deliveries. For letter-size envelopes, such as the ones it gave us for sending the books, it charges a flat rate of $16.50. (Flat rates for slower delivery are lower.) The other shippers base prices on weight and distance traveled. UPS charged $62.87 to send our book next-day to Oregon and $29.55 to Manhattan. FedEx charged $54.57 and $27.48, respectively.

    …Asked how the Postal Service, an independent part of the U.S. government’s executive branch, can deliver overnight shipping for less, a spokeswoman, Yvonne Yoerger, said: “We have an infrastructure in place and letter carriers everywhere. We’re simply adding package delivery to a network that already exists.”

    I used to work at the Post Office too, Clavos. If you had a bad experience where you worked, it’s more likely because of the local management than because of some kind of systemic problem…or perhaps you yourself had a problem, because you’re not working there anymore. That’s not an insinuation, but one possibility among many that has led to your opinion.

    But in any case, in 2008 the USPS moved 203 BILLION pieces of mail…so answer me this one question, Clavos: why hasn’t FedEx and UPS moved into the first-class mail business? There’s NO law preventing them from doing so (with the exception of delivering to military bases)…so why haven’t they done it, if they can do it better/cheaper/more profitably than the Post Office?

    I’ll tell you why – they’re not dumb, and they know the business better than you.

    They knew they could make money on package delivery, so that’s why they moved into that part of the postal business…but they KNOW they don’t have a prayer of competing with the USPS when it comes to first-class and advertising (junk) mail.

    You want to trust the market so much…so why don’t you trust their decisions to not fight a battle they know they’d lose? They KNOW they cannot process first-class mail half as cheaply as the USPS.

    They DO know the business better than you.

    And is ‘government inefficiency’ the only reason why the USPS is losing money? Not at all – two bigger reasons are (1) the current recession which has bit deeply into ALL aspects of the shipping and mailing industry, and (2) the continuing growth of e-mail. It’s well known that what really keeps the USPS afloat is junk mail…and when the volume of junk mail goes way down (didja notice how you get FAR fewer credit offers in the mail now?), the USPS loses billions.

    That’s a direct result of the economic meltdown, Clavos – and not at all due to your claim of ‘government inefficiency’.

    And one more thing: you claim the USPS workers are overpaid, so how about comparing the salaries of their managerial and executive branches from the district level and above? Who truly is getting paid FAR more?

    You know better than to answer that question, because you KNOW that in the private sector, the executives NORMALLY get paid thirty, forty or more times more than the base workers, yet when it comes to the government, even the most powerful guy on the planet – the POTUS – doesn’t get paid more than fifteen or twenty times the pay of the lowest level worker.

    Even in the military, the Joint Chiefs of Staff get paid less than ten times the rawest recruit.

    Clavos, it’s said that no one works in the government to get rich – and that’s a true saying. If ‘getting rich’ is your goal, then by all means go into the private sector. But if ‘getting rich’ is NOT that important to you, but having a steady job that pays the bills IS important to you, then working for the Post Office isn’t bad at all.

    You see, Clavos, ‘getting rich’ might be important to you, and the ‘profit motive’ might be important to you, but it’s NOT that important to many people – myself included. Doing my job well and taking care of the people was ALWAYS more important to me than the ‘profit motive’.

    I’ll never be rich – but having lots of money was never that important to me. That’s probably why I understand most government workers better than you – because I know there’s things that are more important than money.

  • Clavos

    why hasn’t FedEx and UPS moved into the first-class mail business? There’s NO law preventing them from doing so…

    Not quite, Glenn:

    18 USC Sec. 1694:

    “Sec. 1694. Carriage of matter out of mail over post routes

    Whoever, having charge or control of any conveyance operating by
    land, air, or water, which regularly performs trips at stated periods on
    any post route, or from one place to another between which the mail is
    regularly carried, carries, otherwise than in the mail, any letters or
    packets, except such as relate to some part of the cargo of such
    conveyance, or to the current business of the carrier, or to some
    article carried at the same time by the same conveyance, shall, except
    as otherwise provided by law, be fined under this title.”

    And 39 CFR Sec. 601:

    “Sec. 601. Letters carried out of the mail

    (a) A letter may be carried out of the mails when–
    (1) it is enclosed in an envelope;
    (2) the amount of postage which would have been charged on the
    letter if it had been sent by mail is paid by stamps, or postage
    meter stamps, on the envelope;
    (3) the envelope is properly addressed;
    (4) the envelope is so sealed that the letter cannot be taken
    from it without defacing the envelope;
    (5) any stamps on the envelope are canceled in ink by the
    sender; and
    (6) the date of the letter, of its transmission or receipt by
    the carrier is endorsed on the envelope in ink.

    (b) The Postal Service may suspend the operation of any part of this
    section upon any mail route where the public interest requires the
    suspension.

    (Pub. L. 91-375, Aug. 12, 1970, 84 Stat. 727; Pub. L. 109-435, title V,
    Sec. 503(a), Dec. 20, 2006, 120 Stat. 3234.)”

    Sec. 601 was published in 1970, when the old Post Office was reorganized into the USPS, but the USPS soon found out that Sec. 601 did not adequately protect their monopoly on First Class, which had been in effect since 1790, so they asked for, and received an amendment, the latest version of which, published in 2006 (as noted above) decrees:

    ” Pub. L. 109-435, title V, Sec. 503, Dec. 20, 2006, 120 Stat.
    3234, provided that, effective on the date the regulations
    promulgated under section 3633 of this title, as amended, take
    effect, this section is amended by striking subsection (b) and
    inserting the following:

    “(b) A letter may also be carried out of the mails when–
    “(1) the amount paid for the private carriage of the letter is
    at least the amount equal to 6 times the rate then currently charged
    for the 1st ounce of a single-piece first class letter;
    “(2) the letter weighs at least 12\1/2\ ounces;
    or
    “(3) such carriage is within the scope of services described by
    regulations of the United States Postal Service (including, in
    particular, sections 310.1 and 320.2-320.8 of title 39 of the Code
    of Federal Regulations, as in effect on July 1, 2005) that purport
    to permit private carriage by suspension of the operation of this
    section (as then in effect).

    “(c) Any regulations necessary to carry out this section shall be
    promulgated by the Postal Regulatory Commission.”

    Effective Date of 2006 Amendment

    Pub. L. 109-435, title V, Sec. 503(b), Dec. 20, 2006, 120 Stat.
    3235, provided that: “This section [amending this section] shall take
    effect on the date as of which the regulations promulgated under section
    3633 of title 39, United States Code (as amended by section 202) take
    effect.”

    Which, of course, by imposing a noncompetitive rate and weight restriction on the private carriers (highlighted in bold above), ensured the continuation of the Postal Service’s 220 year monopoly on First Class mail.

    The rest of your rant either ignores documented facts from impartial sources presented in the article (…and when the volume of junk mail goes way down…). Documented in the article. The reason? Standard mail, as it’s denoted by the USPS, is not First Class, and increasingly IS being carried by the private carriers, the real reason for the decrease, not the recession, because the decrease in this and all mail previously carried exclusively by the Service has been going on for many years before the present slowdown.

    The rest of your rant imputes words and thoughts never expressed in the article You see, Clavos, ‘getting rich’ might be important to you, and the ‘profit motive’ might be important to you, but it’s NOT that important to many people – myself included.), and/or are irrelevant (If you had a bad experience where you worked, it’s more likely because of the local management than because of some kind of systemic problem) or insulting (or perhaps you yourself had a problem, because you’re not working there anymore.), and thus not worth responding to.

    Read the article, with comprehension, Glenn before you rant and make a fool of yourself.

  • C. C. D.

    If you think that UPS and FedEx can do a better job delivering the mail then you’d better be ready to pay much, much higher prices. For several years now UPS and FedEx (and DHL before they bit the dust)
    have been paying the post office to deliver many packages EVERY day to the “last mile”. They drop off the packages at the post office and the PO takes it to the delivery point. They can PAY the post office to finish carrying it to it’s destination cheaper than they can deliver it themselves. Do you really think they would pay the competition to deliver packages if they could do the job themselves and still make a profit?

  • Joel

    Postal SERVICE!! It is a service to the American people, by law the Postal Service is not supposed to be a money making enterprise. UPS and FEDEX could never furnish door to door delivery as the USPS. They would only deliver what was profitable for them. Goodbye delivery to the projects, and rural areas, and when you want to send that Birthday card to your niece Muffy, with the 50.00 check in it, you are going to pay 1.50 cents and I bet it arrives empty. I sat in my 110 degree truck last week delivering Social Security checks, Birthday cards and packages, insurance bills ect. I read articles like yours telling me how my job is inefficient and that i am overpaid. I would like for you to come ride with me one day and see what I do, just one day! I would love to make comparable wages to the UPS and FEDEX people. A carrier 25 years in service,UPS and FEDEX,makes 9000.00 more dollars than me per year. In the late 80s and mid 90s the government routinely took money from the USPS for government use and never paid us back, can you find that anywhere? Finally I noticed in one of your links that you can apply for Postal jobs, do they pay you to advertize on your anti Postal column?

  • Clavos

    by law the Postal Service is not supposed to be a money making enterprise.

    Absolutely untrue. The whole reason for the reorganization in 1971 was the amount of money it was losing; it was hoped that, as a semi-private enterprise, it would do better. It didn’t, it did much worse — to the point now that it’s a significant drag on the economy as a whole, with ever worse SERVICE.

    UPS and FEDEX could never furnish door to door delivery as the USPS.

    And the Post master General has already proposed that the USPS stop doing so, and in fact, in newer suburban subdivisions they stopped doing so years ago, they only deliver to centrally located “cluster” mailboxes. Residents must walk or drive to get their maiil.

    I would like for you to come ride with me one day and see what I do…

    I already have — I’m a former letter carrier.

    I would love to make comparable wages to the UPS and FEDEX people.

    You make more — 25-30 percent more in equal job wirth equal seniority.

    A carrier 25 years in service,UPS and FEDEX,makes 9000.00 more dollars than me per year.

    Not true. See the link in the article.

    READ the article.

  • Joel

    No residents do not walk or drive, the boxes are always configured within walking distance of their homes unless the area is on a contract route, you should know this if you were a city letter carrier

  • Clavos

    For several years now UPS and FedEx (and DHL before they bit the dust)
    have been paying the post office to deliver many packages EVERY day to the “last mile”.”

    Actually, it’s the other way around.

    See this USPS Press Release about the deal.

    Some excerpts:

    The U.S. Postal Service and FedEx Express have formed a business alliance based on air transportation and retail business agreements. Under this alliance, the Postal Service will buy space on FedEx airplanes to transport Express Mail, Priority Mail and First-Class Mail and FedEx will locate overnight service collection boxes at post offices nationwide.

    ***

    The Postal Service will pay FedEx approximately $6.3 billion over seven years for shared access to the FedEx national air transportation network. With more than 650 aircraft, FedEx is one of the largest airlines in the world. This agreement will provide one integrated national air transportation network for the Postal Service. The transportation agreement will begin in August 2001.

    ***

    The retail agreement gives FedEx the opportunity to place FedEx self-service collection boxes on postal property. This non-exclusive business concept will be open to any company that offers overnight package service with a national reach.

  • Clavos

    No residents do not walk or drive, the boxes are always configured within walking distance of their homes…

    WTF??? Did I not say they could walk?

  • Joel

    Your article does not give proof of the 25-30% pay difference. Following the link does not offer proof of this either, only states it, I know that the UPS man that shares an area with me makes 9000.00 more dollars per year than I and he only has 21 years in service, so maybe instead of just throwing statements out there, offer a legitimate pay scale of each service I would love to see it. I would also like to know how much stock you own in UPS or FEDEX?

  • Clavos

    Benefits, Joel, benefits. Yours are far more generous than the FedEx employees’ and have to be paid by the USPS (to the tune of nearly half their labor costs), even if you don’t see that in your take home pay.

    No stock, Joel, but I am a taxpayer, and as far as I’m concerned, the USPS is costing me too much for the substandard (and ever deteriorating), erratic and unreliable service it provides — which it now wants to reduce even further by halting Saturday delivery, and eventually (if it gets its way) delivery altogether.

    It’s a dinosaur, which this year will steal $7 billion (in addition to subsidies) out of the American people’s pockets

  • Joel

    Post your proof!!! Show us what benefits Postal Service employees receive that UPS and FEDEX employees dont? The Postal Service will never stop home delivery, if you WERE a carrier you would know that the service revolves around FREE home delivery. It is the service. If critics as yourself get their way and the USPS is closed down as we know it, do you think it would be fair to ask the taxpayers to absorb all the costs that are associated with retirees? At least by operating they are paying most of the cost of the retirees, and maybe, just maybe you may receive decent service sometime! If the USPS is closed and you want to mail that birthday card to your neice Muffy, tell the people at the UPS or FEDEX office you drive the card too, that you only want to pay 44 cents to mail it! After the clerk finishes laughing dig deep in your pocket for the postage you are going to have to pay. Why dont you do an article on how the Government has the Postal Service hog-tied and won’t allow them to make decisions that could turn it around and be a success!

  • Joel

    You are misleading and innacurate in your response to CCD. Daily, I deliver packages that were originally mailed by UPS or FEDEX. You pay them 15.00 to mail it, they bring it to us pay 10.00 and keep the difference. I deliver it. USPS did sign an agreement with FEDEX to use their air fleet, but USPS does not use FEDEX or UPS to DELIVER packages. The agreement was signed because the USPS was payibg more to commercial airlines to dispatch mail. I dont remember the figures but they saved millions by piggybacking with FEDEX air.

  • Clavos

    if you WERE a carrier you would know that the service revolves around FREE home delivery.

    Except, it’s not free, it’s costing us billions.

    do you think it would be fair to ask the taxpayers to absorb all the costs that are associated with retirees?

    We already are.

    At least by operating they are paying most of the cost of the retirees, and maybe, just maybe you may receive decent service sometime!

    Actually, they’re not. As I’ve pointed out repeatedly, both in the article and in the comments, the USPS is losing billions, on top of receiving billions in taxpayers’ money in the form of subsidies For us taxpayers it’s a lose-lose situation: costly, with increasingly bad service.

  • Clavos

    You are misleading and innacurate in your response to CCD.

    My response to CCD quoted and linked to a Press Release from the USPS announcing and describing the relationship.

    If you find it “misleading and inaccurate,” take it up with your bosses.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    You might consider, Clavos, making a separate submission of your article to USPS, if only to see the kind of feedback it would generate.

    Where are our BC top honchos? It would surely serve their site to have your article more widely publicized. Anybody there in the marketing department that’s listening?

  • Clavos

    Actually it was already posted on the home page promo slot the day it was published, Roger, but thanks for suggesting it.

  • Dan

    “According to the USPS 2005 Annual Report, the Service received $3 billion each year in 2003, 2004, and 2005, listed as “Capital Contributions of US Government,” yet the Postal Service claims they have received no “subsidies” since 1982″

    Both statements are true. Here’s why:

    The USPS is mandated by Federal Government to give hiring preferences to veterans. The military service time is rolled into the retirement benefits and pay schedules of the veteran employees and the government picks up the additional burden it places on the USPS by the 3 billion “subsidy”.

    Thats it. No bailout is involved. If the USPS loses money, the regulators get together and decide on a appropriate rate increase. In 2003 The USPS made a 3.8 billion profit. No increases were sought. That is how a non profit quasi government operation is supposed to work.

    The price of a first-class stamp has risen slower than inflation: from 25 cents in 1988 to 44 cents today. That’s pretty good.

    In comment #22, CCD pointed out that UPS, Fed Ex, and DHL are some of the Postal Services more lucrative customers. What does that say about the ability of private companies ability to undercut the USPSs rates?

    Notice too, that the workforce has declined steadily in recent years. This is more due to increased automation than declining mail volume. A lot of would be profits have been placed in innovation. Actual point deliveries are up with the population.

    Finally, although the USPS has been hit hard with a downturn in the economy, and recent fuel price increases, most all of the 7 billion estimated “loss” for 2009 is because of a 2006 Congressional overhaul that requires the USPS to pre-fund $55 billion over 10 years to create a reserve fund to cover retirees’ long-term health care benefits. Most other Federal employees do not have their long-term health care benefits covered ahead of time.

    But then they are supported by tax payer dollars, and the USPS is not.

    It’s hard to understand why the other side of the issue isn’t told to the extent that the misinformation is. I’m usually for privatization, but in this instance I think the USPS does a good job.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Interesting comment, Dan. I applaud you on your fair-mindedness.

  • Dan

    Thanks roger. I think Clavos is usually on target, but like I said, the other side of this issue doesn’t usually get much attention. So there is a lot of public sentiment against the USPS being well run.

  • C. C. D.

    The reason the post office pays someone else to send mail on airplanes is because the post office is not ALLOWED to own airplanes!! So, they HAVE to pay somebody for that part. And, the post office DOES deliver for those services the “last mile” to many delivery points. Just go to a post office and watch them drive up and haul in packages for the post office to continue delivering! I am recently retired from the post office so I absolutely know this for a fact. I worked in a level 18 (not one of the bigger offices) and UPS stopped EVERY day and a semi-truck from FedEx stopped every other day. The post office then delivered the package to the person it was going to—THAT’s the LAST mile.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, the kind of info you dug out (and analyzed it for us) takes some doing. I suppose it’s easy to miss.

  • Clavos

    No bailout is involved

    Never said there was a “bailout,” Dan. A bailout is not the same as a subsidy. And what the Service uses the subsidy for is immaterial. The fact is, it cannot survive without periodic substantial cash infusions from the government.

    In comment #22, CCD pointed out that UPS, Fed Ex, and DHL are some of the Postal Services more lucrative customers. What does that say about the ability of private companies ability to undercut the USPSs rates?

    Except that, as I pointed out upthread, the fact is, as the press release from the USPS indicates, the relationship is the other way around: the USPS is the client of FedEx, not vice versa.

    Notice too, that the workforce has declined steadily in recent years. This is more due to increased automation than declining mail volume.

    As the Postmaster General points out in his address to the Senate subcommittee (which I also linked in the article), the decrease in employment has been engineered by attrition because the Service is overstaffed, and he intends to reduce it further; not only to reduce their labor costs, but also because demand for their services is down substantially, for all the reasons I outlined in the article, with sources.

    Finally, although the USPS has been hit hard with a downturn in the economy…

    It has, but it has been failing and losing money for nearly a half century, not just the last couple of years.

    most all of the 7 billion estimated “loss” for 2009 is because of a 2006 Congressional overhaul that requires the USPS to pre-fund $55 billion over 10 years to create a reserve fund to cover retirees’ long-term health care benefits.

    Exactly one of my main points: USPS employees are overpaid compared to comparable jobs in industry, and this is the main source of their financial woes. Their unions are much too strong for the good of the Service.

    But then they are supported by tax payer dollars, and the USPS is not.

    As I demonstrated in the article and various comments, that’s a myth. We taxpayers are paying through the nose for an increasingly anachronistic and inefficient service.

  • C. C. D.

    “In comment #22, CCD pointed out that UPS, Fed Ex, and DHL are some of the Postal Services more lucrative customers. What does that say about the ability of private companies ability to undercut the USPSs rates?”
    Clavos,
    I did not say that they were the USPS’s most lucrative customers. I said it was cheaper for them to pay the USPS to deliver the last mile than they could do it. If there is so much waste and the postal employees are so over-paid, then why is it cheaper for FedEx/UPS to pay the post office for that last mile instead of delivering it themselves. In YOUR previous comment, you said the post office didn’t deliver the last mile. Your comment was
    “Actually, it’s the other way around.”
    So, are you now conceeding that you were wrong about that? Ever think you might be wrong about some of your other ideas?

  • Clavos

    I did not say that they were the USPS’s most lucrative customers. I said it was cheaper for them to pay the USPS to deliver the last mile than they could do it. If there is so much waste and the postal employees are so over-paid, then why is it cheaper for FedEx/UPS to pay the post office for that last mile instead of delivering it themselves. In YOUR previous comment, you said the post office didn’t deliver the last mile. Your comment was
    “Actually, it’s the other way around.”

    You’ve missed the point again, CCD. FedEx doesn’t pay the USPS at all. FedEx carries its own “last mile.” The USPS pays FedEx to carry the mail for it on its aircraft.

    Read the press release.

  • C. C. D.

    Clavos,
    You need to read the statements, even your own, more closely. I did NOT say that
    YOU said FedEx and USP were the most lucrative customers of the USPS. I said you were attributing the statement to ME and I did NOT say that.
    I also have never denied that the USPS uses FedEx to move mail by air. If you will read your OWN link, you will see that they starting using FedEx, as opposed to using several other aircarriers, in order to save money.
    You can say “FedEx carries it’s own last mile” (your quote) all you want but that is NOT true. (No matter how many times you say it) I helped unload those FedEx semi’s several days a week for YEARS and then sent the packages out with USPS carriers to delivery them to their FINAL destination, which is the LAST MILE. They probably DO deliver MOST of their packages the last mile. But, the ones they don’t consider cost effective are left with the USPS going the LAST MILE. There were other post office employees who posted on here that tried to tell you they delivered FedEx packages. THEY know what they are talking about because they DID deliver those FedEx and UPS packages. Doesn’t matter how many times you deny it—-they (USPS employees) ARE deliverying packages that UPS/FedEx don’t want to.
    Like I stated previously, go to a post office and watch FedEx and USP trucks unload for the USPS to deliver that “last mile”. Guess what–they are PAYING the post office to do this.

  • Clavos

    Those packages are the ones that the USPS paid FedEx and UPS to carry on their own arcraft.

    What you’re carrying in your truck is the USPS mail flown by the commercial carriers.

    One more time: Read the freakin’ press release.

    The relationship is USPS pays FedDEx and UPS for services rendered, not the other way around.

    And the bottom line is you (the USPS) are costing me and all the other taxpayers way too much money for slow, unreliable service, which worsens every year.

    End of story.

  • Dan

    “Never said there was a “bailout,” Dan. A bailout is not the same as a subsidy. And what the Service uses the subsidy for is immaterial. The fact is, it cannot survive without periodic substantial cash infusions from the government.”

    You were suggesting that the subsidy was used like a bailout due to inefficiency. As I pointed out, the Government puts an undue burden on the Postal Service to pick up the cost of increased pay for military service of veteran employees. It is a fair adjustment that has nothing to do with USPS losing money. The government pays the subsidy even when USPS is profitable.

    ” the decrease in employment has been engineered by attrition because the Service is overstaffed, and he intends to reduce it further; not only to reduce their labor costs, but also because demand for their services is down substantially, for all the reasons I outlined in the article, with sources”

    That is true for only recently because of the economic downturn. If you look at the employment rate over the last decade, it has steadily declined. This happens through attrition as well, but the cause is increased efficiency. Another benefit is postage rates have gone up less than inflation.

    “It has, but it has been failing and losing money for nearly a half century, not just the last couple of years.”

    In 2003 the profit was 3.8 billion. There are other profitable years, and some that are losses. In good years the USPS banks money, then in bad years they use the banked money. When the surplus is gone, and they lose money, they increase rates. It’s not hard to understand. That is the nature of a non-profit. They are not meant to make money, but they haven’t required any taxpayer money for 27 years. Unless you want to pretend that the government should not be responsible for placing the veterans service benefits on USPS.

    “Exactly one of my main points: USPS employees are overpaid compared to comparable jobs in industry, and this is the main source of their financial woes. Their unions are much too strong for the good of the Service.”

    Your judgement that USPS personel are overpaid wasn’t my point at all. My point was that in 2006 Congress inacted a law forcing USPS to pre-fund a surplus account for future employees retirement health care costs. The USPS was doing well then, and they didn’t think it would be a problem. But the economy went south, and now pre-funding the surplus account appears as a loss.

    “As I demonstrated in the article and various comments, that’s a myth. We taxpayers are paying through the nose for an increasingly anachronistic and inefficient service.”

    Only when you pay postage. As I have demonstrated.

    You and CCD are both right. The USPS pays for air service regionally, and they deliver packages for the privates locally.

  • Clavos

    You were suggesting that the subsidy was used like a bailout due to inefficiency.

    No, I was suggesting that the Postal Service cannot operate without subsidies, which is why they get them, yet they still lose money.

    And I also gave a number of reasons why they lose money in the article; chief among them is the fact that they pay (salary and benefits) 25-30% more than comparable jobs in industry. That’s not because of their having to pay veteran’s higher pay, it’s because of the onerous work rules and pay scales imposed on them (which is management’s fault) by their unions.

    If you look at the employment rate over the last decade, it has steadily declined.

    Exactly, long before the recession, and only by attrition, because the unions have made those jobs fire-proof. Management has been trying to reduce total employment for over a decade.

    It’s all in the PG’s address.

    My point was that in 2006 Congress inacted a law forcing USPS to pre-fund a surplus account for future employees retirement health care costs.

    Which wouldn’t be onerous were it not for the excessively generous benefits negotiated by the unions. (Again, management let it happen — the onus is on them)

    They are not meant to make money, but they haven’t required any taxpayer money for 27 years.

    Sorry, Dan, but that’s just not true. It’s in their financial statements. Call it what you like, but they get money every year from the feds, and the feds don’t have any money of their own, it’s all OURS, the taxpayers.

    You’re just regurgitating the USPS bullshit story.

  • C. C. D.

    Clavos,
    You aren’t even reading the posts or maybe you are and just want to argue. First you say FedEx delivers it’s own last mile and now you say the post office does it but only for packages that they’ve already paid FedEx to move. So, is the post office paying USP to bring packages to them to be delivered? Same way with points others have made. You start with one theory and when someone proves you wrong you change your view and go off on something else. I don’t know about the others but I’ve had enough of your nonsense. I worked for the post office for over 28 years and I know what the facts are. How you can assume to know more than the people who have made a career with the post office is beyond belief. Don’t bother responding for my benfit—it’s obvious you have some personal agenda to bad mouth the USPS.

  • Clavos

    I haven’t changed a thing, Joel, I was simply responding to your point about the FedEx trucks dropping loads at the post office: those are the freight FedEx has carried for the USPS, so they should be delivered by the USPS, because it’s their mail.

    I didn’t make this up, it’s in the USPS press release, and in several of the other links in the article.

    FedEx carries and delivers its own, and also carries the USPS shipments, which it delivers back to USPS at the destination post offices — that’s what I’ve said all along — you apparently have a problem with reading comprehension, or you would have understood it long ago.

    And yes, I have a very personal agenda — USPS is wasting my money, I want the waste stopped.

  • Glenn Contrarian

    Clavos –

    Joel should understand that Postal workers DO make 15-20% more than their counterparts in FedEx and UPS – I’ll agree with you on that one. That does NOT mean, however, that they are overpaid, because the Postal workers have a greater level of TRUST than do those in UPS and FedEx. After all, do you really want someone earning barely more than minimum wage to be responsible for delivering your Social Security check?

    Do you? Really? I don’t – because the less someone makes, the more likely that someone is to engage in theft. You came from Mexico, so you should know that better than I do.

    But the main point of this reply is this: the USPS made a profit in 2004, 2005, and 2006. Yes, these were the first years that the USPS made a profit since its reorganization in ’71, but the USPS had nonetheless finally become profitable…

    …and where did the profits go? Largely to pay on escrow for the debt they’d accumulated since they stopped receiving government subsidies in ’83.

    BUT they were finally able to begin paying off escrow.

    THEN the recession hit…and because the USPS (along with 28 out of 30 Dow Jones Industrials) began losing billions, oh, it’s time to scrap the USPS, put it out to pasture, put it out of the anti-union crowd’s misery.

    The USPS will do just fine, thank you, and a year or two after we get out of this recession they’ll return to profitability…because the changes they’d made to become profitable haven’t gone away, and during the recession they’ve cut even more fat and made yet more changes to improve efficiency.

    So that’s my prediction – when we’re slogging through another election cycle in 2012, you and I will discuss how USPS returned to profitability in 2011…and perhaps even in 2010. You’ll still bitterly claim how terrible the USPS is, but they’ll still be making a profit.

    How about it? Wanna make a prediction that you and I can argue about in 2012?

  • Clavos

    Joel should understand that Postal workers DO make 15-20% more than their counterparts in FedEx and UPS – I’ll agree with you on that one. That does NOT mean, however, that they are overpaid, because the Postal workers have a greater level of TRUST than do those in UPS and FedEx. After all, do you really want someone earning barely more than minimum wage to be responsible for delivering your Social Security check?

    If they’re working for FedEx or UPS, they’re making more than “barely more than minimum wage,” FedEx and UPS are also both a more reliable and more secure means of shipping valuables than the USPS has ever been, much less now. Every day, they both carry literally millions and millions of dollars worth of valuables, including such easily fenced items as diamonds.

    I don’t get a Social Security check, but if I did, and had a choice where the security of that check were a concern, I would choose either of the two commercial carriers first. In my business dealings, I have shipped valuables (and had them shipped to me) worth far more than a SS check for years via both carriers and never lost a thing.

    Stop with the strawman, Glenn.

    since they stopped receiving government subsidies in ’83.

    Contrary to popular belief, telling a lie over and over doesn’t make it true, Glenn. The Postal Service hasn’t stopped receiving subsidies yet. Look at their statements.

  • Dan

    Clavos is being a dining room table.

    most of this folly is cleared up if you understand that the Post Office aims to break even. If they lose 1 billion one year and profit 2 billion the next, they came closer to their goal in the losing year.

    To say that they finally became profitable in 2003, does not mean they were losing money until then. Rather, it means that they became too efficient. Instead of rolling back their rates even further under the inflationary curve, Congress decided they should bank the surplus. Now that banking a surplus has became an official expenditure, and the economic downturn has wiped out the surplus, a surplus that isn’t realized shows up on the ledger as a loss.

    The 3 billion subsidy that shows up every year regardless if they win or lose is just compensation for the burden the government places on the USPS for continuance of veterans careers in federal service.

    Claiming that ones tax dollars are subsidizing the USPS on that basis, would be like claiming I am susidizing Clavos with my tax dollars when he gets a income tax refund. In both cases an undue burden was placed on USPS and Clavos, and an adjustment was made.

    HERE is what CCD is talking about. UPS dumps thousands of its parcels to be delivered by USPS. By taking advantage of a special bulk rate UPS can middle the difference between USPS and UPS’s regular rates and the lower volume rate USPS offers. It is a pretty clever strategy because it steals regular rate customers from USPS, takes a profit, then makes USPS deliver the package at the reduced rate.

  • Clavos

    If they lose 1 billion one year and profit 2 billion the next, they came closer to their goal in the losing year.

    Except that’s not what has happened; they’ve lost far more than they’ve regained for more than two decades.

    To say that they finally became profitable in 2003, does not mean they were losing money until then.

    No, but their record does. Here’s a recent NPR article detailing the fact that they’ve lost money 11 of the last 12 quarters.

    Here’s a timeline of articles dating back to 2000 which indicate losses most years since then, including $1.7B in 2001, $1.5B in 2002, accompanied by a 4.5% drop in mail volume, this sentence from an article dated April 7, 2000: “No less important is the fact that the Postal Service receives what amounts to a government created subsidy that express carriers do not receive,” and much more — You can dig it up for yourself, I found that much in less than 5 minutes on Google.

    The 3 billion subsidy that shows up every year regardless if they win or lose is just compensation for the burden the government places on the USPS for continuance of veterans careers in federal service.

    Semantics. It’s a subsidy paid with tax dollars, the government doesn’t have money of its own, it all comes from us.

    Claiming that ones tax dollars are subsidizing the USPS on that basis, would be like claiming I am susidizing Clavos with my tax dollars when he gets a income tax refund

    Bad analogy Dan. A tax refund is by definition my money being returned to me The subsidies are my money (and yours and every other taxpayers’) being given to the postal service — see the difference?

    Here’s a detailed analysis by the Cato Institute which spells out the detailed history of Postal Service missteps and boondoggles for all of the 1980s. One tidbit: “Mail service in the United States is getting slower, more expensive, and less reliable. First-class mail moves 15 percent slower than it did in 1969. The cost of first-class postage is rising twice as fast as inflation. According to the U.S. Postal Service’s own figures, postal worker productivity has declined during the 1980s.”

    HERE is what CCD is talking about. UPS dumps thousands of its parcels to be delivered by USPS.

    Interesting article, thanks for posting it. It reinforces my point about the stupidity and bad management of the Postal Service, and its overall inefficiency.

    Here’s the USPS’ own Financial History Summary, covering the years from 1997 to 2001. It indicates two pertinent details:

    1. Ending balance losses for every one of those years, even though three of those years had modest operational surpluses, and

    2. A $3 billion subsidy from the government (listed as “Capital contributions of the U.S. government”) every single one of those years.

    It’s late, and I’m tired, so that’s it for now, but there’s a ton more of proof of the inefficiency and huge losses of the Postal Service going back a long, long time.

    I didn’t make this all up; it’s the truth and on record.

  • http://handyfilm.blogspot.com handyguy

    Clavos makes some good points, although I think his solutions are extreme. Lots of people complain about the postal service, but there would be a major outcry if it were dismantled — there is a big reservoir of affection for it. As a kid, I loved getting mail; I think a lot of baby boomers share that residual excitement when opening the mailbox every day.

    Plus, what about Netflix!?

    The main shortcoming of this article is the limited amount of credit Clavos is willing to give Postmaster General Potter for his [thankless] task. From the NY Times:

    He has overseen productivity gains and, according to a poll conducted by Rasmussen Reports, a rise in customer satisfaction. Between 2001 and 2006, he even eliminated the Postal Service’s $11.3 billion debt. That year, 2006, was also when demand for mail service peaked, with 210 billion pieces delivered.

    But the last few years have been brutal. The Postal Service lost more than $5 billion in 2007, and another $2.4 billion in 2008. And, of course, it is on track to lose that whopping $7 billion in the current fiscal year.

    The basic problem is that Potter seems unwilling to ask for more radical steps than cutting Saturday delivery and closing a few post offices — and Congress is highly hostile towards even those stopgap measures. The hostility comes from rural districts, where some post offices serve as few as 200 people yet remain open.

  • Clavos

    handy,

    The remedies I suggest at the end of the article do not constitute “dismantling.” A radical reorganization and substantial downsizing (by at least 50% of the current work force), including a possible partnership (more extensive than the existing ones) with one or more of the commercial carriers, much greater integration of automation, etc., yes.

    But I am not advocating the complete dismantling of the Postal Service.

  • Dan

    “…dating back to 2000 which indicate losses most years since then, including $1.7B in 2001, $1.5B in 2002″

    How about more complete data from years 1991 to 2006 (in billions): -1.5,-0.5,-1.8,0.9,+1.8,+1.6,
    +1.3,+0.6,+0.4,-0.2,-1.7,-1.5,+3.9,+3.1,+1.4,+0.9.

    Looks like a net positive to me. Your cherry picked years of 01 and 02 were followed by +3.9 in 2003. That’s how a non profit is supposed to work. Ups and downs.

    “Bad analogy Dan. A tax refund is by definition my money being returned to me”

    And USPS has their money returned to them. They would not pay veterans at accelerated salary and retirement schedules without being mandated to do so by government.

    Alas, the limitations of the internet preclude me the ability to present a comprehensive hand puppet tutorial on the subject.

    “Interesting article, thanks for posting it. It reinforces my point about the stupidity and bad management of the Postal Service, and its overall inefficiency.”

    Except it contradicts your point that the private carriers aren’t mailing their unprofitable delivery sectors through the USPS.

    “But the last few years have been brutal. The Postal Service lost more than $5 billion in 2007, and another $2.4 billion in 2008. And, of course, it is on track to lose that whopping $7 billion in the current fiscal year.”

    That is because, as I’ve already said, in 2006 the board of governers looked at all that profit (see above) that had been accumulating and decided to pre-fund 55 billion over 10 years into a surplus account for future, (not present) costs of retirement health care. If they decide, as the PMG is urging, to delay banking the surplus, (or what in previous years has been a surplus) then presto-chango the USPS is almost in the black. More likely though they’ll raise rates, which they can still do and remain competitive because they have been under the inflationary curve for some time now.

  • pborgos

    Great idea let’s do away with half a million more jobs. These USPS employees don’t help move the economy, don’t pay taxes, so what do we need them for?

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Great point, pborgos. Just what the doctor ordered in times such as these.

  • fysj

    650,000 of the laziest, slow as a turtle with no feet employees. i say make them get a real job! with their express mail that takes 6 1/2 weeks to deliver

  • fysj

    and they want to run healthcare?

  • Joel

    In response to Glenn, August 29th post, I think you are correct, Clavos was one of the few fired from the Post Office, he still carries a chip on his shoulder!

  • OG

    Clavos, it’s been 14 days since your last post on this subject. What’s up?

    Clavos, your continued misconceptions and resentment PLUS the rebuttal to your false argument is located within the comments to the article: “The Tea-Bagging Cracker at the Post Office”.

    As I said: “If you try to keep an open-mind I believe that you can realize some of your false accusations and constant generalizations are based on false assumptions. Keep in mind that the USPS is not supposed to make a profit, can incur a deficit due to fluctuating economic conditions, has not received taxpayer subsidies since 1982 (NOT ONE CENT), provides decent wages and benefits to working people, does deliver non-profitable UPS and FedEX packages (LAST MILE), is burdened by a $5 billion yearly payment to prefund its retiree benefits and has over-payed $75 billion to the government. I guarantee you that USPS will survive these economic times and engage in alternative revenue generating efforts and still be the most trusted government agency.

    And it is one of the most efficient and least expensive postal services in the world – independent of tax-payers’ money.”

    “Clavos, the $3 billion you claim as proof that you are paying my salary for my “sinecure” job was for the most part a financial transfer of assets from the USPOD (constituting the initial investment capital) to the USPS in 1971 ($1.7 billion) plus annual payments for public service costs between 1972-1982 ($1.3 billion). It is repeated on every yearly financial statement. The link to the USPS 2009 Annual Report you provided explains this (p. 68). Personally, I truly hope that USPS will return this money when it regains its financial viability, not because it has to, but only to protect itself and its employees from perpetual false misconceptions and crude/illegitimate insinuations.

    However, this transfer of capital is a legitimate act since USPS is a public service branch of government which “shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress and supported by the people.” [39 U. S. C. & 101 (a)]

    Besides, the Postal Reorganization Act of 1970 entitles the USPS to receive $460 million per year from the federal government as reimbursements to its public service costs (a small fraction of the total incurred cost). Since 1982 USPS chose not to request this payment – thereby saving the taxpayers $12.5+ billion dollars this far, while continuing to operate self-sufficiently and independently of taxpayers’ money ever since. For more info on this visit USPS SP Ch. 3 Sect. D, p. 64

    Obviously, your attack on the Postal Service (and postal workers) revolves on the idea that you rather have no legal government and pay no taxes. But we do (and we will) Clavos (and perhaps Joanne too). Not only is the $3 billion transfer a legitimate act, but it also does not lead to the claim that you are paying my salary through your tax obligations nor does it imply that the USPS is “hemorrhaging [your] money“. The deficit is borrowed and repaid by USPS – thereby giving it economic flexibility bringing it closer to its goal of breaking-even over time, while also maintaining universal service and offering less expensive postage rates to the American people.

    But who knows Clavos?! One day you may overthrow the Government and become vvery rich. ‘Perhaps’ your first thing on the agenda will be to fire me (or @ me, depending on your ultimate political views at that time). Until then, I’ll continue to (also) work sincerely for my salary and benefits without your direct financial contribution. Just like you do, right Clavos?

    You have thus been re-refuted, sir! (… and ma’am!)”

    Have a nice day!
    OG

  • OG

    I’m still open!

    OG

  • Larry

    Clavos- It is better to remain silent and seem uneducated than to open your mouth and remove all doubt. When you get ALL your facts from Republican news sources, your information is sure to be incorrect. Here is a quick lesson on why the post office is losing so much money. And no, it is not because of the internet!
    But I know “your type” You will twist it until it fits YOUR agenda.

  • OG

    Yes, reading different sources of informaion is better for the American democracy principle! Thank you Larry.

    OG

  • http://www.usps.com/communications/newsroom/2010/pr10_090.htm Michael

    “PORTLAND, OR — In his annual state of the business address to the mailing industry, Postmaster General John E. Potter today stressed that long-term sustainability for the Postal Service will be achieved through fundamental change.

    “The Postal Service must have the ability to manage its business, and to adapt quickly to the needs of our customers and the marketplace,” said Potter. “And our business model must change to reflect the reality of a volatile economy and a communications marketplace that has been undergoing a transformation as profound as anything that has ever come before.”

    Despite cutting spending by $3 billion in 2010, the Postal Service continues to seek meaningful change for greater control over business decisions, including delivery frequency, pricing and products, public policy and workforce flexibility.”

    “Postmaster General Cites Need for Change As Losses Mount

    Postmaster General John Potter stressed that long-term sustainability for the U.S. Postal Service—which is facing projected losses of $7 billion this year—will be achieved only if USPS can significantly change the way it does business.

    In his annual state of the business address to the mailing industry on Sept. 15, Potter highlighted the massive $3 billion in spending reductions he has overseen this year at USPS. Potter cited a number of fiscal achievements during Fiscal Year 2010, including cutting work hours by 17 percent, increasing Total Factor Productivity by 20 percent and working with the smallest workforce in 10 years—a reduction of about 100,000 employees over the last three years, mostly through attrition or retirement.”