Post Office Change by Congress Will Stamp Out USPS!

The United States Postal Service announced recently that it is going postal on itself (to use a fading expression from the days when postal workers shot people (or themselves) because their jobs drove them mad). Well, the USPS didn’t actually use that term, but the Postmaster General, Patrick Donahoe, is certainly doing his best to kill the US Mail with his plan for change.

US mail change rings certain death knell for the Postal Service

When you CLAIM your problem is that you’ve lost 29% of your first-class business due to email competing for your services, you don’t reform the postal service by reducing both quality and convenience of first-class mail for all your customers. While the U.S. Postal Service has an annual deficit of $5.1 billion to adjust for, it will never succeed by changing the postal service in ways that assure its services become much worse!

Nevertheless, Donahoe’s announced solution was that the post office is going to increase mail delivery time from one-day to three days (one-third the present quality) and greatly reduce the number of offices they have by 3,700 (increase customer inconvenience), and eliminate Saturday delivery. (The latter we can handle, as we never used to have it anyway, and many private competitors don’t offer it either.) Apparently, the Postmaster General scratched his hollow head and said, “Fewer people are using our services. Let’s get real crappy and see if we can get rid of the rest of them.” Perhaps his new retirement plan is to get rid of the rest of his customers so he can have a going-out-of business sale and then go fishing.

Think of what this slower service will do to time-sensitive materials like news publications and mail-order prescriptions to towns too small to have a pharmacy (and soon too small to have a post office) or to those Netflix movies that will now take 2-3 times longer to reach you, meaning you’ll get fewer a month. There are still many transactions that cannot be completed online, even though the transaction begins online, and there always will be. As a matter of fact, the whole argument that mail volume is down due to the internet and not the economy is highly questionable. Amazon and Netflix alone have added huge volume over the past decade. Things purchased online do not get to your home on a wire. Have you noticed that your bulk male has gone down any in recent years?

Vermont would lose 15 post offices and a major processing center, closures that Sen. Bernard Sanders (I) said would result in “irreparable” changes to mail service in his rural state.

“If you slow mail delivery . . . you’re laying the groundwork for the destruction of the Postal Service as we know it,” he said in an interview. Sanders is one of 20 senators who signed a letter to Senate leaders last week urging a moratorium on closings. (The Washington Post)

Which moratorium has for now been accepted, and that buys us time to seriously debate the garbage arguments that are being thrown at us.

One has to wonder if Post Master General, Patrick Donahue, truly fails to see how much more business he’ll lose by making these changes, thus creating an ever-widening spiral of necessary cuts to become profitable again … or is he playing to subversive interests in the government that gave him his job in the first place? He seems to be intentionally killing the postal service. Why is he offering only cuts, instead of suggesting rate increases? These facts cause one to wonder if he is just a henchman installed by those in congress who want to see all mail privatized. (O.K., to be fair, he has asked for a one-penny hike in rates, too, but that’s joke worth less than my two cents worth.)

Who is really killing the US mail?

Which party do you suppose is behind the cuts-only approach to balancing the post office’s budget? One hint before clicking the link above is that it was during the Bush years that congress mandated universal retirement health-care funding by the USPS be PRE-funded for the next seventy-five years! There is no other institution or business in the U.S. that has to pre-fund UNIVERSAL HEALTHCARE for its retirees for the next seventy-five years! Not even congress! The act gave the postal service ten years to accumulate that money, which means that every year the U.S. post office has to cough up $5.5 billion to fund the healthcare of future retirees.

Oh, that’s about the same amount as the U.S. Postal Service’s current annual deficit? Hmm. I wonder how that coincidence adds up? Is the situation starting to reek of engineered failure?

Moreover, two studies have indicated that the post office’s retirement pension fund is overfunded by 50-70 billion dollars. Congress could have just transferred the surplus in the retirement pension fund over to the retirement healthcare fund, keeping the post office in the black, but it chose not to.

Still don’t think all of this is planned obsolescence? Then, lets look at one of congress’s other areas of insanely rigid control. The post office has been bleeding for a few years now, and everyone in government has just sat and watched it bleed. In fact, they’ve made it bleed without mercy. The very fact that the post office has accumulated $14 billion in total debt says that congress has knowingly waited far too long to correct the problem, letting it build, apparently by intention, toward catachlysm. You cannot miss seeing $14 billion in debt accumulate throughout the Great Recession.

Starting to get the feeling that congress is designing the post office for failure? Keep in mind that the mail service is tightly regulated by congress while, at the same time, mandated by congress to operate without taxpayer support. That is an impossible combination to work out when congress is the one that sets all postal rates, which it sets significantly lower than all of the post office’s competitors and obviously not based on the post office’s actual costs of operations or it wouldn’t be in the red.

With that in mind, I’d like you to take notice of how congress plays the crony to Wall Street and other big business with a massive corporate handout here. Ask yourself one simple question: How much of your mail is junk mail? Maybe seventy percent of your mail is junk mail. It comes with the same delivery service as all other first-class mail, but travels at a much lower price! Who benefits? Do YOU want all that junk mail that you subsidize? Most of us would be glad to see ALL of that mail disappear.

Congress has mandated these low bulk-mail rates to help major corporations. If the mail is unprofitable it is because 70% of the mail delivered is bulk mail that must be sent at obviously unprofitable rates if the mail is not breaking even and junk mail accounts for 70% of it.

One would almost think that some party in congress is trying to break the back of the U.S. Postal Service by making it the slave of Wall Street. Perhaps they’d like to see it privatized. Maybe they have corporate cronies who would like to deliver billions of additional packages and other corporate cronies who benefit from unbelievably low bulk mail rates. Don’t you suppose there’s a little lobbying on those bulk mail rates while no lobbying on your first-class single-item rates?

Who else but congress could create such a contrived crisis? It is clearly either crisis by design or crisis by extreme lack of intelligence. The answers to this artificial crisis are so simple congress could set the post office on a solid footing for decades to come in a one-hour session:

One post office change needs to come in how it makes change

The making of change is one of the changes that needs to happen in the post-office-congress equation. Have you ever wondered, as I have, why congress is so penny-pinching with the post office that it raises postage rates for first-class mail to 44 cents, instead of 45 cents or 50 cents?

How many of us would really cringe if the stamp machine did not give us back that useless one-cent stamp in change when we  put in 45 cents because the machine won’t accept our pennies? What is the penny stamp good for? Oh, sure, you can save it for the next time congress ups your postage by a single penny to accompany all the stamps you bought that are now insufficient; but, by the time that happens, you have either lost all your penny stamps, or humidity has glued them to the bottom of your drawer. Or you could stick it on the forehead of your congressman to signify how much his thoughts are worth.

For decades congress has mandated that millions of times a day, the post office wastes time making change in mere pennies and penny stamps because the congress-post-office relationship crimps the postal service in these bizarre ways that private companies never have to deal with. Things don’t have to be this way, but congress makes certain they are. How many private companies would pick prices like forty-four cents, instead of fifty cents? If the post office is not profitable, it is clearly congress that has made sure the postal service makes no cents when it consistently gives the post office lower rates than requested. So, the stupidity here is clearly not in the postal service but in congress for micromanaging the post office down to its last cent. What congress needs to change is itself.

This could only be by accident if congress is dumber than a postage stamp. While that is not improbable, I suspect congress is trying to privatize the post office by crowding it toward inevitable failure, but would we really be better served if the USPS were ended and private companies took over?

USPS v UPS, FedEx and other competitors

USPS rates are generally lower than its competitors. Some argue its service is worse, but how can you provide equal service at lower rates? You’re forced to be the econo-miser. If one were to actually buy the notion that private companies are more efficient, then it is would be impossible for the USPS to provide the same quality service as private companies for less money; but that congressional mandate is only a tiny part of the problem that congress creates for the post office.

I won’t even agree that USPS service is worse than UPS (United Parcel Service) or FedEx provide. I think it’s service is VASTLY BETTER than all of its competitors. If you think otherwise, consider the following points:

• Does UPS or FedEx come by every house in your town everyday of the workweek plus Saturdays just to see IF you have mail to deliver?
• Does UPS or FedEx come to get your packages whether you remember to take the extra time to call them or not?
• Can you just set the package outside hour front door in a government protected box, or do you have to sign for its shipment in person, requiring you be home on THEIR schedule?
• Does UPS or FedEx have numerous service outlets scattered all over your town in order to make themselves as convenient as possible?
• Does UPS or FedEx agree to deliver to any remote part of the United States, no matter how unprofitable the run is, just to make sure that delivery is available to all U.S. citizens in order to keep us well-connected as a nation?
• Would UPS or FedEx deliver standard letters overseas to Hawaii or fly them by bush pilot into little villages of Alaska for the same price that they take them across town so that all parts of our nation get the same basic service at the same price to keep one area of the U.S. from having an economic disadvantage over others?
• Does UPS or FedEx run its own law-enforcement agency equivalent to postal inspectors to make sure your mailbox is safe from theft? Mailboxes all over cities are unlocked because the US postal service has doggedly gone after anyone who misuses a simple mailbox just so you can feel your checks are reasonably safe from theft in the mail.
• Does UPS or FedEx pursue its own customers for mail fraud, too?
• While this very day UPS reports, “Heavy snow in parts of Colorado, Kansas, New Mexico, Oklahoma, and Texas is causing unavoidable service delays due to hazardous road conditions in the affected areas,” USPS has to deliver through rain, sleet, hail or snow.
• How much would UPS or FedEx raise their rates if they had to provide all of the above under a congressional mandate?
• Do any of those services really deliver packages in any better shape than the USPS has been doing?
• Consider that the US post office process 78 billion pieces of first-class mail a year. In fact, it delivers HALF of ALL THE MAIL IN THE WORLD!

About the only thing I can say in favor of the private delivery companies is that their overnight mail is more consistently and truly “overnight” than the USPS; but it also costs more, and they don’t have all the mandates above to take care of at the same time. With all of those additional serviced, I’d say the USPS is the greatest bargain on earth compared to its competitors. So, let’s check the rates.

While the United States Postal Service gladly puts a link to its rates on the home page of its website, you cannot find such a link at this time on the United Parcel Service home page. I guess they want to keep that information until the end of the transaction because it is not so attractive. They certainly provide worse service by making it harder to figure out:

First, you have to enter your zip code, then download a chart that gives everyone else’s zip code, then open that in Excel in order to figure out the zone for each destination based on your location. Oh, but guess what, they conveniently left the Hawaii zip codes off the main chart because they’re special, so that you have to look elsewhere to find what it will cost to mail to Hawaii. Then that chart does not have any of the rates for the zones, so you have to go back to the website and enter the zone information into their calculator. Sheesh, I practically died of Alzheimer’s and an aneurism before figuring out what it cost to send a one-pound package to Hawaii via UPS.

And the price difference between USPS and UPS? Next-day air by UPS from my location on the west coast was $53 to Hawaii. Well, that depended on what island I sent it to. Some other islands were $55 — the reason for having a special section on the chart just for Hawaii. It’s special in that it gets special higher rates. My cost for the same one-pound package by USPS? Same flat rate anywhere in the country of $18.30 if I can fit it into a flat-rate envelope. If it’s a larger box, the same one-pound package would cost me $31.60 to any island. It took me less than a minute to figure both options on the USPS site because it gives a simple little chart with seven zones based on mileage alone for express mail.

I guess that’s why USPS gets the extra “S.” It really is special in that it offers the same rates to Hawaii that I pay to mail anywhere else in the U.S. Now, that’s special. At double the price, is it any wonder that UPS has a slight edge in getting overnight mail to its destination actually overnight? You do the math. Now, you might think I cheated by picking UPS’s most expensive U.S. destination, but the fact is that the ONLY place where UPS overnight is cheaper than the USPS is if I send a package to someone else within my own zone. Even then it is only cheaper if I am unable to use the United States Postal Service’s flat-rate envelope.

So, that’s what you’ll get if you privatize the United States post office. In fact, you’ll get worse because UPS and FedEx rates are held low by the fact that they currently have to compete with the vastly more efficient United States Postal Service. If you lose the post office, think of all you’ll be missing that you now take for granted before it’s too late. And then think of how much MORE you’ll be paying for what you do get.

The post-office-congress solution is a revolution against congress

While everyone switching to email is great for saving trees and increasing efficiency it is also a completely simple problem for the congress and the post office to resolve.

First part of a simple solution: get congress out of the mail carriers’ hair and off their backs. Let the post office set its own rates — while maintaining the congressional mandates above for rate equality and services. Obviously, the USPS will have to price at a competitive level. Let TRUE market principles govern, rather than price control. Continue with a mandate that they not make a profit, but set rates that maintain a balanced budget.

Start by increasing bulk mail rates. These cheap rates are nothing more than corporate welfare from the poor and middle class to the rich. Increasing the rate to balance the postal budget, would greatly reduce the amount of junk mail being sent, conserving trees and petroleum, while making the mail that is delivered far more profitable. Then the post office could cut its budget by reducing the number of mail carriers without reducing the number of convenient outlets it offers because every carrier could handle a larger route if bulk mail dropped by half.

While I cannot be certain of the price points that will balance best here — rectifying the price increase with the reduction in volume that it will cause — I am certain there is a price point that will actually decrease the amount of mail delivered — thereby cutting costs for labor, fuel, processing machinery, etc. a great deal — and actually increase revenue. Right now U.S. mail is an absurd bargain compared to its private-sector competition. First-class rates for non-bulk mail could stay right where they are, and the bulk of us would no longer be subsidizing big business.

Bulk-mail rates not withstanding, I say raise first-class postage to fifty cents a letter right away. That’s a bargain compared to most national mail services. Forget the Faustian bargain currently being proposed of raising the rate to only forty-five cents. One penny when they’re bleeding red ink everywhere? Let’s move into an age where we can put quarters in stamp machines and not get five one-cent stamps in change or a nickle. How many of us are really going to care that we’re not getting those five pennies back each time we mail a letter? Most of us probably just put them in a jar and give them to the grandkids anyway. Think of the labor wasted each day just in counting pennies!

In the event of a shutdown due to bankruptcy, private companies such as FedEx and UPS could handle a small portion of the material the post office moves, but they do not go everywhere. No business has shown interest in delivering letters everywhere in the country for a set rate of 44 cents or 45 cents for a first-class letter. (Huffington Post)

Do you suppose congress can restrain itself from permanently wrecking the venerable U.S. Postal Service, first begun by Ben Franklin and older than the U.S. constitution? Instead of going for these quick and obvious solutions, they will make sure it is damaged at their hands one more time. They will require it to do the many things that no private service does at rates that no private service will touch and insist that this can happen because they’ve required it to happen, creating postal traumatic stress.

Classic denial of reality.

 

Articles for reference:

U.S. Postal Service Faces Bankruptcy, Plans Cuts To Slow Delivery Of First Class Mail

Postal Service reports massive $5 billion loss

Postal Service to delay closures

Postal Workers: The Last Union

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December 20, 2011 @ 4:34 pm

Uncategorized

congress, united states postal service