Latest images
RegisterEmail Isn't Killing The Post Office
2 posters
Email Isn't Killing The Post Office
by TexasBlue Sun Dec 11, 2011 7:40 pm
Email Isn't Killing The Post Office
Jeff Jacoby
Boston Globe
Dec. 11, 2011
It's Groundhog Day at the US Postal Service: time once again for the familiar laments about how the agency's financial losses are surging, how demand for its services is plummeting, and how officials have no choice but to close local facilities, raise the price of stamps, and reduce delivery standards.
Last week the Postal Service announced plans to cut $3 billion in costs by slowing down first-class mail service and eliminating about half of the country's 461 mail-processing centers. That would mean an end to next-day delivery of first-class mail. Although that might not seem like much of a threat for something already thought of as "snail mail," the Postal Service has insisted for decades that 95 percent or more of local first-class mail is successfully delivered overnight. When the new standards take effect next spring, two-day delivery will become the new overnight, even for mail that's just traveling down the street.
If all this sounds familiar, you aren't hallucinating.
"In 1990, the Postal Service launched a nationwide plan to intentionally slow down mail delivery," policy analyst James Bovard wrote in his 1994 book, Lost Rights. First-class letters were already taking 20 percent longer to reach their destination than they had in 1969, but Postmaster General Anthony Frank assured Congress that the reduction in delivery standards would "improve our ability to deliver local mail on time." In the weird logic and language of the American postal system, the key to success was to give the public less for its money.
The more things change in Postal World, the more they remain the same. In the 1960s, a stunning 83 percent of the agency's total budget went to wages and benefits. Three decades later, after billions of dollars had been spent on automation, labor costs still accounted for 82 percent of the budget. And in 2011? "Decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office's
costs," The New York Times recently reported. "Labor represents 80 percent of the agency's expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors."
That things have been getting tougher for the Postal Service, nobody disputes. With the ubiquity of e-mail, text-messages, social media, and online bill-paying, the volume of mail entrusted to the post office has been sinking for years. In a study published last year, the Government Accountability Office noted that first-class mail, the Postal Service's most profitable business line, had declined 19 percent from its peak in 2001, and was expected to fall another 37 percent by 2020.
The Internet Age may be wreaking havoc with the post office and its mail-delivery business, but what industry in America isn't going through the same wrenching experience? And not many institutions enjoy the benefits that federal law confers on the Postal Service: It pays no income or property taxes, it's exempt from vehicle licensing requirements and parking fines, and it has the power of eminent domain. Most significant of all, it has a legal monopoly on the delivery of mail: The federal Private Express statutes make it a crime for any private carrier to deliver letters. The only exception is for "extremely urgent" letters, and even those may be delivered by a private company only if it's willing to charge a much higher rate than the Postal Service would have charged.
They don't have a legally binding monopoly, unlike the US Postal Service. Yet they're thriving, while the post office is struggling to stave off bankruptcy.
Yet with all its privileges, the Postal Service is struggling, while UPS and FedEx flourish. Why? Because they have something invaluable that the post office lacks: Competitors.
"We have a business model that is failing," Postmaster General Patrick Donahoe said last week. It's true. But it was true long before e-mail came along. What is killing the post office is the lack of genuine, head-to-head competition that forces vendors to compete for customers by pushing quality up and holding prices down. Only in a government-sheltered monopoly like the Postal Service would labor costs remain as bloated as they have, year in and year out.
More than a decade into the 21st century, there is no reason why mail shouldn't be delivered by multiple enterprises, each one competing for market share and goodwill by providing consumers with a valued service.
In nearly every other area, after all, Americans embrace competition. With competition comes accountability. And only when the Postal Service is accountable -- only when its customers are free to take their business elsewhere – will the endless round of excuses and losses and service reductions finally come to an end.
Jeff Jacoby
Boston Globe
Dec. 11, 2011
It's Groundhog Day at the US Postal Service: time once again for the familiar laments about how the agency's financial losses are surging, how demand for its services is plummeting, and how officials have no choice but to close local facilities, raise the price of stamps, and reduce delivery standards.
Last week the Postal Service announced plans to cut $3 billion in costs by slowing down first-class mail service and eliminating about half of the country's 461 mail-processing centers. That would mean an end to next-day delivery of first-class mail. Although that might not seem like much of a threat for something already thought of as "snail mail," the Postal Service has insisted for decades that 95 percent or more of local first-class mail is successfully delivered overnight. When the new standards take effect next spring, two-day delivery will become the new overnight, even for mail that's just traveling down the street.
If all this sounds familiar, you aren't hallucinating.
"In 1990, the Postal Service launched a nationwide plan to intentionally slow down mail delivery," policy analyst James Bovard wrote in his 1994 book, Lost Rights. First-class letters were already taking 20 percent longer to reach their destination than they had in 1969, but Postmaster General Anthony Frank assured Congress that the reduction in delivery standards would "improve our ability to deliver local mail on time." In the weird logic and language of the American postal system, the key to success was to give the public less for its money.
The more things change in Postal World, the more they remain the same. In the 1960s, a stunning 83 percent of the agency's total budget went to wages and benefits. Three decades later, after billions of dollars had been spent on automation, labor costs still accounted for 82 percent of the budget. And in 2011? "Decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office's
costs," The New York Times recently reported. "Labor represents 80 percent of the agency's expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors."
That things have been getting tougher for the Postal Service, nobody disputes. With the ubiquity of e-mail, text-messages, social media, and online bill-paying, the volume of mail entrusted to the post office has been sinking for years. In a study published last year, the Government Accountability Office noted that first-class mail, the Postal Service's most profitable business line, had declined 19 percent from its peak in 2001, and was expected to fall another 37 percent by 2020.
The Internet Age may be wreaking havoc with the post office and its mail-delivery business, but what industry in America isn't going through the same wrenching experience? And not many institutions enjoy the benefits that federal law confers on the Postal Service: It pays no income or property taxes, it's exempt from vehicle licensing requirements and parking fines, and it has the power of eminent domain. Most significant of all, it has a legal monopoly on the delivery of mail: The federal Private Express statutes make it a crime for any private carrier to deliver letters. The only exception is for "extremely urgent" letters, and even those may be delivered by a private company only if it's willing to charge a much higher rate than the Postal Service would have charged.
They don't have a legally binding monopoly, unlike the US Postal Service. Yet they're thriving, while the post office is struggling to stave off bankruptcy.
Yet with all its privileges, the Postal Service is struggling, while UPS and FedEx flourish. Why? Because they have something invaluable that the post office lacks: Competitors.
"We have a business model that is failing," Postmaster General Patrick Donahoe said last week. It's true. But it was true long before e-mail came along. What is killing the post office is the lack of genuine, head-to-head competition that forces vendors to compete for customers by pushing quality up and holding prices down. Only in a government-sheltered monopoly like the Postal Service would labor costs remain as bloated as they have, year in and year out.
More than a decade into the 21st century, there is no reason why mail shouldn't be delivered by multiple enterprises, each one competing for market share and goodwill by providing consumers with a valued service.
In nearly every other area, after all, Americans embrace competition. With competition comes accountability. And only when the Postal Service is accountable -- only when its customers are free to take their business elsewhere – will the endless round of excuses and losses and service reductions finally come to an end.
TexasBlue
Re: Email Isn't Killing The Post Office
by dblboggie Sun Dec 11, 2011 10:29 pm
What did I say before on this topic?
I said that the lack of competition was the most important missing ingredient with respect to the USPS.
The author is absolutely right about this. Without competition the USPS will never be able to salvage their sinking enterprise.
I said that the lack of competition was the most important missing ingredient with respect to the USPS.
The author is absolutely right about this. Without competition the USPS will never be able to salvage their sinking enterprise.
dblboggie
Re: Email Isn't Killing The Post Office
by TexasBlue Mon Dec 12, 2011 5:09 am
That and labor costs still accounted for 82% of the budget. Definitely a killer.
TexasBlue
Re: Email Isn't Killing The Post Office
by Guest Mon Dec 12, 2011 12:03 pm
dblboggie wrote:What did I say before on this topic?
I said that the lack of competition was the most important missing ingredient with respect to the USPS.
The author is absolutely right about this. Without competition the USPS will never be able to salvage their sinking enterprise.
Wrong.
- Code:
http://www.politifact.com/georgia/statements/2011/nov/11/sanford-bishop/bishop-signs-letter-saying-post-office-faces-big-p/
Bishop signs letter saying post office faces big pension burden
Mostly True
Share this story:
U.S. Postal Service leaders warn dire budget problems might force them to close offices and lay off 220,000 workers to keep from shutting down completely.
But as ugly as the agency’s $9 billion deficit seems, lawmakers could do one simple thing to help stanch the bleeding, the postmaster general argues. Change laws that make the post office pay for retiree benefits years before the bills come due.
Recently, U.S. Rep. Sanford Bishop, an Albany Democrat, signed a letter with 81 other members of Congress that echoed this argument.
"The Postal Service would still have positive net revenue today except for the requirement that it prefund 100% of employee retirement and retirement health costs, a requirement that Congress imposed on it in 2006," it said.
"No other public or private business in America faces this onerous and unnecessary requirement, and Congress could give the Postal Service breathing room to recalibrate its business model simply by repealing this retirement prefunding requirement," it continued.
Our sister site PolitiFact National has already written about whether the post office’s financial losses would be solved by changing pension laws.
What drew PolitiFact Georgia’s attention is the letter’s suggestion that the Postal Service is being singled out unfairly. Is it true that no other public or private business in America must prefund 100 percent of the costs of its retiree pension and health care benefits?
Before we address this question, we should note that the USPS is a unique government organization. It’s a part of the executive branch, but unlike a typical federal employer, it can go belly up.
And unlike with a typical business, Congress can pass laws that directly dictate how the Postal Service spends billions of dollars.
One of these is the Postal Accountability and Enhancement Act of 2006. It requires the Postal Service to do what’s called "prefund" 100 percent of the health benefits for its future retirees. The cost: About $5 billion a year until 2017.
This is how it works. Each year, the federal government estimates how much Postal Service employees earned in pension and health retirement benefits and calculates what the USPS needs to save to pay these bills in the future. By law, the USPS has to store that money in a trust fund.
The federal Office of Personnel Management, which oversees pensions for federal workers, acknowledged in a Feb. 28 study that among federal employers, the retiree health benefit funding rule is unique to the post office.
They also said it’s essential. The USPS could go out of business, sticking the federal government with a bill it cannot pay. This could force the entire federal retiree health program to go broke, the OPM report argued.
Now, let’s look at Bishop’s claim.
Federal employers:
Under the current retirement system, all federal employers, including the Postal Service, must prefund their pension benefits. And as we explained earlier, the USPS does have unique health benefit funding rules.
It’s therefore accurate that under the current retirement system, no federal employer aside from the Postal Service must prefund 100 percent of both its retiree health and pension benefits.
State and local governments:
No federal or state rules require state or local governments to fully fund pension or health benefits, said Keith Brainard, director of research for the National Association of State Retirement Administrators.
None of the experts we interviewed had heard of cities, towns or counties with health prefunding requirements.
Private industry:
By federal law, private companies must fund their pensions fully, and catch up over time if they fall behind. They don’t have to prefund retiree health benefits.
This means there’s no reason to go postal over the claim by Bishop and others that "no other public or private business in America" except for the USPS must fund 100 percent of employee pension and retirement health costs in advance.
By and large, this statement fits the evidence.
As with everything else in the public sector, the republicans just want to turn it all over to the private sector so that they can collect three times what it costs the government to do.
Guest- Guest
Re: Email Isn't Killing The Post Office
by Guest Mon Dec 12, 2011 12:03 pm
TexasBlue wrote:That and labor costs still accounted for 82% of the budget. Definitely a killer.
Show me THAT evidence of their budget and the labor costs, please. I dispute that.
Guest- Guest
Re: Email Isn't Killing The Post Office
by TexasBlue Mon Dec 12, 2011 3:28 pm
Cookie Parker wrote:TexasBlue wrote:That and labor costs still accounted for 82% of the budget. Definitely a killer.
Show me THAT evidence of their budget and the labor costs, please. I dispute that.
http://www.gpo.gov/fdsys/pkg/CREC-1996-06-06/html/CREC-1996-06-06-pt1-PgE1023-4.htm
http://www.newser.com/story/127736/usps-teeters-on-brink-of-default.html
http://www.theatlantic.com/politics/archive/2011/05/can-progressives-fix-the-us-postal-service/239669/
http://finance.yahoo.com/blogs/daily-ticker/now-u-postal-belly-153600714.html
TexasBlue
Re: Email Isn't Killing The Post Office
by dblboggie Mon Dec 12, 2011 6:22 pm
TexasBlue wrote:That and labor costs still accounted for 82% of the budget. Definitely a killer.
And we can thank government unions for that insane level of labor costs!
IMHO government unions are criminal enterprises!
dblboggie
Permissions in this forum:
You cannot reply to topics in this forum