The United States Postal Service is in a heap of trouble- $16 Billion in losses for the year, and thousands of layoffs are likely to occur. To start, what is wrong with the Postal Service, and why is this happening? The Postal Service has huge operating expenses, as it is required to fully fund health care benefits and pension for retirees some 20 years in advance. The Postal Service also has operations in extremely small trafficked areas, and they are losing money by having a post office and employees at that location. Gas and vehicle prices are also growing, along with fewer people using Snail Mail.
Obviously, the Postal Service has a lot problems. It has these problems because it is operating 20 years in the past. What can we do to save the Post Office?
1. Cut down on the benefits of retirees, both healthcare and pensions. Just a nominal decrease would work, as this would provide enough savings to help cover part of these benefits. We must also restructure the retiree system for Postal employees, forcing more employee contributions and fewer retiree benefits. This is a drastic step, but it’s this, or no Snail Mail.
2. Obviously, we can’t just not have mail service in less trafficked areas. But there are post offices in these areas operating under full hours and with full staffing. What if we moved the staffing around, only having one or two employees at these branches, compared to the four or five we already do have? We can also cut back on the hours of the branch.
3. With growing gas and vehicle prices, we can easily cut back on the routes of postal employees. We can do this by offering rural customers a Post Office Box at no charge, and then offering to actually pay the people using these Post Office Boxes. We already pay a few dollars in gas and vehicle maintenance every time deliver to these rural routes, and it would save a lot of money just to pay them to use a P.O. Box.
4. We need to explore new revenue options that would not increase prices for the consumer. Clearly, we must increase the stamp price to keep up with inflation, but we need to figure out if we are maximizing our profits. What if the Postal Service put up advertising in it’s branches, along with advertising on the stamps? What if the Postal Service put advertising on its trucks, and then sold bulk mailing to companies at a rate not by the price of the stamp? This would encourage companies to do more bulk mailers.
The postal service is in loads of trouble, and it will eventually be forced to close to keep up with the times. Just look at UPS or Fedex’s Models, and these companies are thriving. It’s a matter of reforming to the times, which is something the Postal Service must do in order to save itself.
November 18th, 2012 at 9:48 am
The real problem with your analysis Ryan is that you’re looking at this as strictly a business venture with an ultimate goal to maximize profits at all cost. And like most business minded people, you target the only source available to you which are the employees.
An argument that so often gets overlooked is that public sector workers fuel the economy. As a taxpayer, I don’t have a problem with the USPS losing $16 billion a year because it employs more than 8.5 million people and supports almost $1 trillion in economic activity every year. That “economic activity” is key. Cutting benefits and wages will have an adverse effect on the economy.
And I can’t really understand why anti health care people fail to realize that these health care cost will be passed on to others anyway. Someone’s going to have to pick up the tab.
But even getting back to a “profit only” mindset, considering those 8.5 million people make on average $67K a year, and even if they all were married with 2 children, they’d average paying 4K a yr in fed taxes. That’s not a loss by any stretch. And that excludes state and local taxes paid.
November 18th, 2012 at 10:44 am
I think having a post office is one of those essentials of society. I’m not sure how competing mail delivery services might work, but I do think the USPS can take on more free market ideas and prosper.
They should switch from a pension system to a 401K contribution system. That would be a major savings. They should switch to a 5-day per week system, that would help. They also should seek partnerships with private companies to innovate.
One of the enhancements they introduced some years ago that I love is their automated systems. I can go in, skip the line, and get my package set for delivery. I pop the sticker on the box, put the box into the appropriate slot, and I’m done. I love self service systems and this is the way to go. And it takes some of the stress and drudgery off employees, so why not do even more of this. Automate more and then, rather than laying people off, reduce your workforce accordingly by attrition.
November 18th, 2012 at 11:12 am
#4 put advertising on stamps – that’s a neat idea.
I avoid going to the post office. For me it’s just a necessary evil. I agree that we need it, but I don’t use it. Also, I disagree with their hiring practices. Their customer service is usually rude. In NW FL they’re mostly entitled affirmative action types. If they’re sweating the usps’s future and they’re anxious then I’m happy. They deserve trouble.
November 18th, 2012 at 11:31 am
The postal service is a fine example of why governments cannot run long-term projects efficiently. The postal services has been replaced in society by the internet. We don’t need to write letters anymore and we have UPS and FedEx for most of our packages.
The postal service ought to go out of business in our generation. Meanwhile, they ought to downscale considerably by going to once a week delivery. This would happen in any normal business if they were allowed to make decisions on their own, like file for bankruptcy to unload those fat union pensions.
November 19th, 2012 at 4:55 am
The Self-Storage facility where I have rented a locker for the last seven years, just sent me a notice that they will charge me $3. mo to send me a bill ( via snail mail ).
Dump the Post Office Or Else.
Now I get to spend an hour jumping through hoops with a website that refuses to recognize my password.
BTW
For Sale : Playboy Magazine June ‘66 thru Dec ‘12. Cheap.
Approx. Wt: 800lb. Approx. Sz: ‘72 Cadillac
November 19th, 2012 at 7:01 am
Doubt if Ben Franklin would be impressed with our current postal system. His actually delivered the mail faster and cheaper and that was back when your better roadways were made of logs.
We should repeal the Lysander Spooner Law which the gov’t passed to prevent Spooner from delivering the mail with his private company. Once again, this time in the mid-19th Century, he was delivering the mail faster and cheaper than the USPS.