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Posted by on Dec 26, 2011 in Business, Economy, Politics | 17 comments

The Postal Service Is Financially Going Postal

The U.S. P0stal Service is financially going postal. John Avlon, writing in The Daily Beast, notes that it faces a grave crisis and there si a chance that the Christmas of December 2011 could one day soon be looked back as the Good Old Days — when there was more extensive service than during the rest of the 21st century. In fact, Avlon writes, the Postal Service’s survival could be at stake:

A crowded post office is part of the scenery of the season-–long lines, arms full of packaged presents, spare Christmas decorations hanging under the humming lights.

But the post office as we know it is in peril, bleeding $5 billion a year in losses. The culprit isn’t just the rise of the Internet as an alternative to envelopes and stamps. It’s a series of stifling regulations imposed on the organization by Congress, such as requiring the U.S. Postal Service to fully fund all its future pension obligations outright–a measure that would bankrupt any city, state, or business.

It is a solvable problem, but unless our dysfunctional divided Congress takes action in the New Year, post office closures and reduced hours will be the least of our worries. Without reform, America faces the very real possibility that the USPS will not be able to make its payroll in the summer of 2012.

WARNING FLAG! Anytime a major issue requires a)Congressional decisions, b)level headed Congressional decisions, c) decisions that require lawmakers to put partisan differences aside for a little you just KNOW how that is likely to turn out.So right now we need to adjust out thinking to the fact that in 2011 — as the United States enters another mega partisan election year — the Postal Service will become a big issue where thoughtful reform will likely take back seat to partisan hackery. And some will then quote Seinfeld: “No that there’s anything wrong with that..”

The amount of mail circulated has been in decline since 2006, despite America’s rising population. The USPS has taken proactive steps to cut costs, reducing its workforce by more than 120,000 employees over the past four years and slashing operating expenses by more than $12 billion-–all while reaching 150 million American households and businesses each day and generating almost $1 trillion in economic activity. But the long-term trend is not its friend, and Postmaster General Patrick Donahoe has been fighting for greater flexibility to meet the challenge of change.

“You know that phrase ‘speed kills?’ Well, the lack of speed will kill the Postal Service.” Donahoe stated in a November 21 speech at the National Press Club. “That’s the stark choice: A more flexible business model that allows us to control costs quickly, or very large losses that will ultimately burden the taxpayer.”

To that end, Donahoe has been pushing a plan to consolidate 260 processing centers along with lobbying Congress for a change to its absurd pension funding requirements. Another option would be to reduce the current six-day delivery schedule to five days a week. Donahoe states that the necessary route to fiscal stability would require $20 billion in annual costs cut by 2015.

Shutting large numbers of local post offices would seem to be the least desirable route, especially from a citizens’ perspective. These still serve as touchstones for communities, a place where neighbors gather and in many cases the most direct daily contact they have with their federal government. Changing the funding formula for pensions is the most logical and painless solution. Some union representatives might object, but the stark alternative is a looming GM-style bailout for the U.S. Postal Service.

This is a scenario that the USPS leadership seems determined to avoid. …

The good news is that there is a bipartisan bill–co-sponsored by centrist Senators Joe Lieberman, Tom Carper, Scott Brown, and Susan Collins–that would modernize the U.S. Postal Service and deliver many of the changes that the postmaster general is requesting in terms of cutting operating costs and creating the flexibility to increase revenue.

Uh, oh. What is the first thing that jumps out to you about the bulk of names associated with this bill?

They are all known as more independent members of Congress, or more moderate members of Congress. Since “moderate” is a dirty word in both parties that would suggest this will will not have as easy going as you would think it could — or should — have. Now, if Rush Limbaugh would only endorse it, then it’ll get almost all of the Republican votes.

Known as the 21st Century Postal Service Act, it was proposed in November and received the requisite hearings on the Homeland Security and Government Affairs Committee. But the bill still needs to be given a green light by Senate Majority Leader Harry Reid to go to the Senate floor for a vote.

This should be filed under “No Brainer.”

The problem here?

What evidence has the American public seen in 2011 that Congress has a brain?

Only senators completely in the thrall of unions or those who might cynically see political benefit in the symbolism of the U.S. Postal Service unable to meet payroll in the heat of a presidential election summer would oppose it.

That sounds like the majority of Congress.:

But the pervasive political brinksmanship on Capitol Hill has displayed a repeated ability to screw up a two-car parade. Failure to act could do what rain, sleet, and snow have failed to do–stop the delivery of the mail.

Let’s hope this urgent and worthy effort to save the USPS from insolvency is exempted from the usual polarized paralysis. The citizen reaction to an avoidable post-office crisis would be swift and merciless, pushing congressional approval ratings to new lows. The alternative–reasoning together in a spirit of long-term fiscal responsibility–could restore some faith in Congress while strengthening the core, constitutionally mandated civic institution that is the United States Postal Service.

May I use a word I don’t often use?


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  • The_Ohioan

    They’d better be sure all those Senior Citizens have their SS checks in direct deposit or this could be the proverbial final straw.

    Current workers see the futility of giving any company or government employer loyalty in light of rampant pension defunding. This downward spiral of dis-honest dealing in all aspects of modern life will only accelerate if these trends to betray trust continue.

    It has been speculated that the reason the “Dark Ages” lasted so long was the absence of trust which negated the ability to extend credit for several centuries.

  • The PO needs to be revamp. Daily mail is no longer necessary. I would have all my bills sent to me by email if possible. I get 2 or 3 of my bills by mail since there is no email option. I pay my bills by online checking. Basically the only other mail I get is junk mail. If it weren’t for junk mail, the PO would probably already be broke.

    The PO could cut back to three day delivery and cut its work force in half in less than a year. That would probably save the PO for another 5 years.

  • Allen

    Who pays the military pensions? So it’s the military that is popular now so they get their pensions without question? When did the military ever make a any money? Who pays ALL the government pensions? They don’t seem to be in any trouble.

    Not paying government retirement pensions is a ridiculous exercise for cutting costs. We don’t want to pay pensions, we don’t want to pay social security, we don’t want to pay Medicare and Medicaid. Nothing for the old people but; Go live under a bridge and die you old worthless piece of crap?

    Something tells me the Fedex/UPS/DHL lobby has a hand in this mess right along with the tea party corruption for hire bunch in congress.

  • RP

    Seems like there are multiple reasons the postal service is declining.
    1. Way back a number of years ago, the postal service handled most all deliveries, including packages. There was UPS, but they were about as slow as the postal service and offered a small amount of competition. Along comes FedEx with its next day delivery with a business model that flunked a masters degree thesis, and that began the decline of the post office as parcel post was a major income stream. UPS reacted as they were a private company, while the USPS was governmental and we all know how long it takes the government to change.
    2. The USPS was unionized and any change proposed was instantly blocked by the union. This created roadblocks to anything that reduced cost and increase efficiencies.
    3. Most all companies that are not unionized with pensions written into contracts have coverted pension plans from definied benefit plans to defined contribution plans. This fixed cost to the year the contribution was made and eliminated the unknown cost fluctuations that caused huge unfunded liabilities the USPS is now trying to cover. At least one government agency is doing the right thing and not passing cost onto our kids and grandkids for benefits earned today. But we are also paying for the cost incurred by our parents generation and that is why there is such a huge cash flow and cost to the USPS today. So pay me now or pay me later, but you will pay me!
    4. The USPS is now stuck with the most costly service with the least revenue generating service. FedEx and UPS does not send their trucks over the majority of the country daily, even when no delivery is required like the USPS does. The USPS drives miles daily to get junk mail and other envelops to houses miles into the country. They have their hands tied by congress that requires services that no private company in its right mind would think of providing.

    So this problem rest with three groups. The postal leadership that was slow to react to a changing environment, a union only interested in protecting jobs and benefits and congress that uses the USPS for political means to an end. Now the postal leadership has caught up and wants change, the unions may have seen the light and know the end is coming, one way or the other, but congress. Thats another issue.

  • STinMN

    I wouldn’t miss the USPS if it went away. For the most part they already have in my area.
    1. Saturday delivery rarely occurs, only if there is some “official” looking mail. It is not uncommon for us to not receive a Saturday delivery for several consecutive weekends. Monday deliveries are always very large if the Saturday delivery doesn’t doesn’t occur, so I’m pretty sure they are just skipping them.

    2. Weekday deliveries are pretty much only guaranteed on Mondays – I’ve had Monday deliveries where there was so much mail the carrier threw multiple boxes under the mailbox. Just what you want when the mailbox is 1/4 mile away from your house, on a busy street. (USPS is too lazy to come down our street, instead requiring all 12 residents to go to a common mailbox not at the end of our street, but the end of the connecting street. Seems that they can service the mailboxes on the connecting street but having so many mailboxes at one location is too confusing and difficult that they need to use a “special” carrier to handle it.)

    3. I’m still waiting for 4 Christmas presents to be delivered by USPS, all ordered before Dec. 5. According to the tracking information one has been riding around in the USPS truck for 2 1/2 weeks. Dan, the manager of package delivery at the distribution center that services my area, confirmed that all the packages are in the truck but he “can’t do anything about it being delivered” if the driver doesn’t drop it off. My favorite excuse is that the driver is probably being careful and doesn’t want to drop them off unless there is someone home. The only problem is that there is always someone home. More likely the “special” carrier that services our route is too lazy to actually drive down our street.

    Our complaints to USPS are dismissed as whining, or that we are being too picky. Our congressional rep got involve (only after he figured out that his mailings weren’t reaching us) and was told everything was fixed. Nothing changed. As far as I’m concerned USPS is putting itself out of business.

  • StockBoyLA

    “As far as I’m concerned USPS is putting itself out of business.”

    I agree…. Their delivery sucks. When I moved into my new place the postman hounded me for two weeks until I put my name on the box. He said it was to ensure I would get all my mail.

    Well…. I still get letters for people who moved out years ago. And some of my mail is still returned to sender, “Addressee Unknown”. They often claim to have tried to deliver boxes, letters requiring signatures.. but say I wasn’t home to receive them.. when in fact I had been home all day. Packages from stores clearly labeled “PERISHABLE” are left out to spoil in the heat if I’m gone for a day or two…

    I try to talk to the delivery men and they are mean. However I’ve discovered if I’m persistent they often come around and are polite. I think they like working alone, on their route everyday and don’t want to be bothered by anyone. Their attitude needs to change.

    A friend sent a letter to me from England…. the UK was able to track it and confirmed they passed the letter to the US postal authorities at the beginning of December…. I still haven’t received it.

    The postal employees who work at the counters tend to be better. Not exactly polite, but not outright rude.

    They used to be the only game in town… and could treat their customers anyway they wanted. However with alternate ways of delivering mail, it’s to be expected that their customers will go to someone who has better service.

    The USPS is digging their own grave.

  • Allen

    the Union argument against USPS is stupid because UPS is union also.

    But really, it’s damned easy to make money if you don’t have to pay the people making it for you.

  • SteveK

    My day-to-day life (writing friends / relatives, banking, bill paying, shopping, etc) is all done online though the products I buy are almost always sent by USPS.

    WHY? Because it costs the seller less… and therefore it costs me LESS.

    I have a ‘hobby business’ on eBay however and in December I mailed 45 – 2″ x 3″ x 5″ 3 ounce packages via First Class Mail for $1.75 each AND they all reached their destination in a timely manner.

    So after reading the complaints and the direction the commenters have tried to steer it I have to wonder if any of them actually use the US Mail? My experience tells me that these complaints seem to be nothing more than the figment of rabid right-wing imaginations. (Except for one moderate that doesn’t sound happy with his move south. :o)

    I ship all over the country… My start point is a back water town… Yuma, AZ and often my mail is going to other back water towns BUT this month, with all the Christmas overload, it has not taken more than 4 days for ANY of my packages to get delivered… Usually they’re delivered it two to three days.

    Tahlequah OK; South Milwaukee WI; Dallas, TX; Tempe, AZ; Johnson City TN; Bessemer AL; Kokomo IN; Minot ND; Jacksonville FL; Belleville PA ; Wenatchee WA; El Cajon CA; Raymore MO…

    Here’s a few specifics:


    2011-12-22, 14:01:00, YUMA, AZ 85365
    Dispatched to Sort Facility
    2011-12-22, 18:33:00, YUMA, AZ 85364
    Processed through USPS Sort Facility
    2011-12-24, 20:24:00, OAK CREEK, WI 53154
    Processed through USPS Sort Facility
    2011-12-25, 01:13:00, OAK CREEK, WI 53154

    YUMA, AZ to TEMPE, AZ – 1 DAY

    Dec-21-11, 15:17 PM, TEMPE, AZ 85282
    Dec-21-11, 08:19 AM, TEMPE, AZ 85282
    Dec-21-11, 08:09 AM, TEMPE, AZ 85282
    Arrival at Post Office
    Dec-21-11, 04:19 AM, TEMPE, AZ 85282
    Arrival at Unit
    Dec-21-11, 04:19 AM, TEMPE, AZ 85282
    Dec-20-11, 12:44 PM, YUMA, AZ 85365


    Dec-22-11, 13:58 PM, JOHNSON CITY, TN 37601
    Arrival at Post Office
    Dec-22-11, 08:15 AM, JOHNSON CITY, TN 37601
    Depart USPS Sort Facility
    Dec-22-11, 00:00 AM, KNOXVILLE, TN 37950
    Processed through USPS Sort Facility
    Dec-21-11, 23:29 PM, KNOXVILLE, TN 37950
    Processed through USPS Sort Facility
    Dec-21-11, 01:50 AM, PHOENIX, AZ 85043
    Dispatched to Sort Facility
    Dec-20-11, 17:04 PM, YUMA, AZ 85364
    Dec-20-11, 12:44 PM, YUMA, AZ 85365


    Dec-23-11, 09:59 AM, BESSEMER, AL 35022
    Out for Delivery
    Dec-23-11, 08:29 AM, BESSEMER, AL 35020
    Sorting Complete
    Dec-23-11, 08:19 AM, BESSEMER, AL 35020
    Arrival at Post Office
    Dec-23-11, 04:33 AM, BESSEMER, AL 35020
    Processed through USPS Sort Facility
    Dec-22-11, 13:53 PM, BIRMINGHAM, AL 35222
    Depart USPS Sort Facility
    Dec-22-11, 00:00 AM, PHOENIX, AZ 85043
    Processed through USPS Sort Facility
    Dec-20-11, 07:42 AM, PHOENIX, AZ 85043
    Dispatched to Sort Facility
    Dec-19-11, 16:58 PM, YUMA, AZ 85364
    Dec-19-11, 12:32 PM, YUMA, AZ 85365

    I wasn’t even going to comment but the character assassination of the Post Office regarding their supposed inefficiency (AND the one comment implying the unions are to blame even though they made nothing but concessions the last contract trying to help make the system work) needed to be rebuked.

  • STinMN

    So after reading the complaints and the direction the commenters have tried to steer it I have to wonder if any of them actually use the US Mail? My experience tells me that these complaints seem to be nothing more than the figment of rabid right-wing imaginations.

    I guess my imagination delivered 2 of my 4 missing packages today. When I asked the driver if he happened to have another 2 for us, and he just smiled and walked away. I was going to posts all 4 of the packages tracking info, but since those 2 haven’t been updated for delivery, here are the other 2:

    December 13, 2011 08:15:00 AM Plymouth MN US Out for delivery
    December 13, 2011 03:29:54 AM Fedex Smartpost Brooklyn Park MN US Departure Scan
    December 13, 2011 03:29:00 AM Fedex Smartpost Brooklyn Park MN US In transit to pickup location
    December 12, 2011 10:54:00 AM Fedex Smartpost Brooklyn Park MN US Arrival Scan
    December 9, 2011 05:10:20 PM Fedex Smartpost Martinsburg WV US Departure Scan
    December 9, 2011 05:10:00 PM Fedex Smartpost Martinsburg WV US In transit to pickup location
    December 9, 2011 03:11:00 PM Fedex Smartpost Martinsburg WV US Arrival Scan
    December 9, 2011 05:53:00 AM US Shipment has left seller facility and is in transit

    December 19, 2011 08:17:00 AM Plymouth MN US Out for delivery
    December 18, 2011 04:21:00 AM Plymouth MN US Arrival Scan
    December 16, 2011 01:08:44 AM Fedex Smartpost Brooklyn Park MN US Departure Scan
    December 16, 2011 01:08:00 AM Fedex Smartpost Brooklyn Park MN US In transit to pickup location
    December 15, 2011 06:15:00 PM Fedex Smartpost Brooklyn Park MN US Arrival Scan
    December 14, 2011 10:35:00 PM Hebron KY Departure Scan
    December 14, 2011 05:04:14 PM Hebron KY Arrival Scan
    December 13, 2011 10:53:00 AM US Shipment has left seller facility and is in transit

    And here’s the traking info for a previously delivered package:

    December 5, 2011 10:53:00 AM Plymouth MN US Delivered
    November 21, 2011 08:32:00 AM Plymouth MN US Out for delivery
    November 21, 2011 05:16:00 AM Plymouth MN US Arrival Scan
    November 18, 2011 09:53:00 AM Saint Louis MO US Departure Scan
    November 17, 2011 10:39:00 PM Saint Louis MO US Arrival Scan
    November 19, 2011 — US Shipment has left seller facility and is in transit

    Maybe the carriers hate the FedEx/USPS arrangement and just don’t deliver them, but in any case the USPS is putting itself out of business. The have become my last choice for shipping anything.

  • SteveK

    When I asked the driver if he happened to have another 2 for us, and he just smiled and walked away.

    AND? Are you saying you expect a mail carrier to be able to tell you where your package is? That’s just too funny… your knowledge of how the USPS runs is shall we say minimal.

    The USPS Carrier doesn’t have a computer in his/her truck that’s probably why the costs for mailing a letter between all the services is so radically different.

    A 1 oz letter anywhere in the US costs:

    • 45¢ USPS First Class mail – 2 to 4 day delivery
    • $21.38 by UPS – 2 day delivery
    • $16.30 by FedEx 6-Day delivery

    And of these services only the Post Office delivers “anywhere”.

    Going back to STinMN ‘timeliness’ examples:
    #1 – FedEx – Martinsburg WV to Plymouth MN = 4 days
    #2 – FedEx – Hebron KY to Plymouth MN = 6 days
    #3 – USPS – St. Louis MO to “Out for Delivery” in Plymouth MN = 2 days PLUS 14 days to find someone home to sign for it.

    Sounds to me like the Post Office wins again and had STinMN been available for his “signature required” delivery he’d have had his package in 3 days.

  • SteveK

    In re-reading STinMN’s examples… NONE of the FedEx examples he uses include a delivery date. Hmm?

    As this information is part-and-parcel (pun intended) of all delivery confirmations its omission…

  • STinMN

    Sounds to me like the Post Office wins again and had STinMN been available for his “signature required” delivery he’d have had his package in 3 days.

    You’re making a lot of assumptions SteveK.

    * NONE of the packages have required a signature (they can’t if they use the FedEx Smartpost system,) so there is no reason they couldn’t have been left at the house.

    * Over the last 3 weeks the house has had someone home at virtually all the time. Either myself, my wife, son, or daughter (both back from college) or some guests we had staying with us for 10 days have been home, unless USPS attempted delivery on Sunday morning or evening.

    * I called Dan, the USPS parcel delivery manager at the distribution center that services my area, this afternoon. He got tired of me calling and agreed to meet with me this afternoon. I got there and met him about 5 minutes before my carrier arrived. Once he arrived Dan went into the truck pulled out my 2 other packages, along with about 30 other packages that should have been delivered weeks ago. He wasn’t happy as he had just been proven wrong.

    BTW, here’s the tracking info for one of the packages USPS delivered today:

    December 27, 2011 12:07:00 PM Plymouth MN US Delivered
    December 8, 2011 08:52:00 AM Plymouth MN US Out for delivery
    December 6, 2011 09:00:00 AM Plymouth MN US Arrival Scan
    December 6, 2011 03:43:51 AM Fedex Smartpost Brooklyn Park MN US Departure Scan
    December 6, 2011 03:43:00 AM Fedex Smartpost Brooklyn Park MN US In transit to pickup location
    December 5, 2011 12:31:00 PM Fedex Smartpost Brooklyn Park MN US Arrival Scan
    December 1, 2011 12:56:00 PM US Shipment has left seller facility and is in transit

    In re-reading STinMN’s examples… NONE of the FedEx examples he uses include a delivery date. Hmm?

    As this information is part-and-parcel (pun intended) of all delivery confirmations its omission…

    The delivery date is missing because the package hasn’t been delivered. That isn’t too hard to understand is it?

    And the FedEx Smartpost examples are the packages covered by the delivery agreement that FedEx and USPS have. FedEx gets the packages from the shipper to the appropriate USPS distribution center, USPS gets the package to the end customer.

  • SteveK

    @ STinMN: comment read and I bow to your right wing fear of government.

    However your neighbor Garrison Keillor would probably disagree with your contention that the Post Office is dangerous as would most people that buy stamps.

  • STinMN

    @SteveK: That has to be the first time I’ve been called right wing, except when I played hockey and they needed a slow, big, enforcer type on right wing during a penalty kill. I’m much more to the left (even playing hockey,) but by no means believe more gov’t is always the answer.

  • StockBoyLA

    I fully understand that the USPS does deliver some (and maybe a large percentage) of items on time. However it serves no purpose for anyone to question the truthfulness of stories or the people who provide examples of the misdeeds of the USPS.

    If people expect their comments to be read and considered to be legitimate, then they must provide the same respect to others offering dissenting views.

    People who so quickly dismiss others’ experiences should not expect to have their own opinions considered.

    I offered my own experiences with the post office, but then to be attacked and told that it was doubtful that I even used the post office, makes me question the judgement of the person who dismisses my experiences and puts into question everything he has to say.

  • SteveK

    If the occasional delayed letter is so important to the commenters here that they feel they must condemn the entire United States Postal System that’s fine.

    These folks are more than welcome to stop using the USPS and use UPS and FedEx exclusively.

    Most however would think it foolish to chose to pay between $16 and $21 a letter but what the hell… you have your rights and no one can stop you. 🙂

  • StockBoyLA

    Delayed letters, ruined merchandise, lost items, rudeness, etc. Hardly a minor inconvenience. Good customer service keeps customers. Bad customer service- and bad experiences that the USPS refuses to acknowledge or address is sure to drive customers away. If your bank occasionally refused to give you money in your account and wouldn’t listen to you, would you just suck it up and continue using them?

    As far as being “free” to use other services…. I can’t control the delivery method friends, businesses, etc. use.

    The postal service is in decline because they suck and they have apologists on their side who refuse to understand the frustration that millions of people occasionally face when using the USPS. Clearly there are problems with the USPS. If there was no problem, then why is it suffering and why do people hate them? If it is to survive the USPS needs to address those problems. Claiming the problems do not exist or that problems are minor is like the ostrich sticking its head in the sand and refusing to see – or understand – anything beyond its own meager experience.

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