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The U.S. Postal Service Nears Collapse (USPS)


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The U.S. Postal Service Nears Collapse (USPS)

  #41 (permalink)
 
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 sptrader 
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The best solution is to privatize the post office.. Split it up between UPS and FEX-Ex or equivalent..
The Government produces NOTHING, it is an EXPENSE... Just like a family budget, when times are tough, you CUT expenses.
80% of Government could be eliminated and no-one would notice the difference, except we would have a balanced budget and a much better economy....
As Ronald Reagan once said : Government isn't the solution, Government is the PROBLEM...

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  #42 (permalink)
 RM99 
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sptrader View Post
The best solution is to privatize the post office.. Split it up between UPS and FEX-Ex or equivalent..
The Government produces NOTHING, it is an EXPENSE... Just like a family budget, when times are tough, you CUT expenses.
80% of Government could be eliminated and no-one would notice the difference, except we would have a balanced budget and a much better economy....
As Ronald Reagan once said : Government isn't the solution, Government is the PROBLEM...

Although that's one solution, I think a better solution would be to simply remove the monkey from their back. I was fairly impressed with the leadership of the Post Office when watching their testimony on CSPAN at a Congressional hearing. Their problem is simply that they cannot make the tough choices they need to make in order to remain viable with a changing marketplace.

I do see a very small need to have the Post Office remain public for catastrophes and disasters....mail is a very vital function in our society and I'd just want to make sure that by privatising it, we wouldn't be losing that crucial capability in times of national or local crisis. Perhaps the private sector can and would still operate during those times, but we'd need to make sure of it.

The biggest detriment of the Post Office is the union. The USPS knows what it needs to do to remain solvent and viable, they simply cannot.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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  #43 (permalink)
 
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At the end of this month, the U.S. Postal Service takes another step toward insolvency.

On Sunday, the service is required by law to pay the federal government $5.6 billion to fund health care benefits for retirees. But it won't do it, because it doesn't have the money. It will be the second time that the service has defaulted on a payment, the first occurring on Aug. 1.

For the time being, the default means little. "This default will have no effect on the processing or delivery of mail, and employees and suppliers will continue to be paid," said David Partenheimer, a spokesman for the Postal Service.
But if Congress does nothing, come next spring, the Postal Service will truly start running out of cash. That means the agency may not have enough to pay mail carriers and subcontractors, which could mean drastic cuts to the mail delivery system -- postal service Armageddon.

The financial crunch is due to a law passed in 2007 that only Congress can fix. Congress ordered the prefunding of retiree benefits, as a way of easing federal deficits. Neither of the bills moving through Congress completely undo that mandate -- they just prolong or delay it.

But unions, in particular, blame Congress and the prefunding mandate for the default, which they call "bogus" and "manufactured." They want Congress to repeal the mandate.

"This 'default' is not a crisis. The Postal Service already has set aside $45 billion for future retiree health benefits -- more than any other organization in America and enough to pay for decades of future retiree healthcare," said National Association of Letter Carriers President Fredric Rolando. "The payment in question results from an unnecessary congressional mandate -- an obligation not required of any other company or agency in the country."

Congress has made it clear that it won't help the Postal Service until after the Nov. 6 elections, at the earliest.
And, since some of the policy prescriptions are controversial, such as an end to Saturday mail delivery service, postal legislation may not happen until a new Congress takes over in January,

The Senate passed a bill to help the postal service earlier this year. But the House has yet to consider a measure drafted by Rep. Darrell Issa, a California Republican, that has only gone through a committee and greatly differs from the Senate version.

"Come Sept. 30, the Postal Service will be forced to default again -- further eroding confidence in its future and in Congress' ability to provide it with the reforms it needs to save itself," said Tom Carper, a Delaware Democrat who is one of the authors of the Senate bill. He urged the House to pass a bill to "help achieve our shared goal of preserving the Postal Service for future generations."

In a possible sign of cooperation to come, Issa sent a letter to President Obama earlier this month, asking him to consider certain key provisions to help the Postal Service. They including some provisions in the Senate bill, such as temporary relief from the mandate to prepay retiree benefits.

After the default, the Postal Service will be paying close attention to cash coming in from the mail due to the campaign election cycle. The service might run out of cash by mid-October for a few days or weeks before the holiday mail delivery rush picks up, according to an August report by the agency's Office of Inspector General.

The Postal Service has a back-up plan to make sure mail gets delivered on time in the event of a cash crunch, including skipping part of a $1.4 billion payment due to the Department of Labor to fund workers' compensation benefits. So far, the Postal Service is expected to make that payment, Partenheimer said.

Postal Service to default again - Yahoo! Finance

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  #44 (permalink)
 
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CNN reporting that the U.S. Postal Service will end Saturday delivery of first-class mail starting in August.

To me, this is a terrible decision. Saturday delivery is one of the only advantages USPS has. It should have eliminated a couple of weekday deliveries instead.

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  #45 (permalink)
 
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Source: Postal Service seeks to end Saturday mail delivery - Yahoo! News

AP is reporting that they will still deliver packages on Saturday, but not mail. Good grief.

Just change to delivering three days a week instead of six... Mon/Wed/Fri, done. Who really can't wait an extra day to receive junk mail, which is the only thing that is ever in my mailbox.

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  #46 (permalink)
Pedro40
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What several people don't understand (aka facts):

1. The USPS is a service, not a for profit organization. When was the last time somebody cried that the US military (also a service) didn't make money? I am sure they cost us trillions, not billions.

2. The USPS has certain obligations (retirement funds) that no other government entity has. Without that payment they would be fine.

3. If you privatize delivery, little places like Nowhere, Nebraska would never get mail or it would cost $15 instead of under 50 cents...

4. Junkmail substitizes the USPS, just like advertisements on free websites. Sure, nobody likes it, but it is still a fact.

Personally I am fine with delivery on every other day (a nice 40% cut in employment), but Mr. Bezos from Amazon would get a heart attack. They have just built huge distribution centers with the idea of next day delivery. Also NFLX DVD users could get a hissy fit. The point is, that several big companies still depend on cheap and reliable everyday mail delivery.

So could the postal service get a haircut and still provide a service quite effectively? Sure. But let's not hold them to standards what we don't expect from other entities....

And private companies can lose a few billions quarterly, there is no insurance against market forces and bad management...

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UPS, FedEx, DHL are available to Amazon when customers are in a hurry.

USPS's specialty is not speed -- but reach, in my opinion. Like your Nowhere, Nebraska example. If someone in Nowhere, Nebraska can't wait the extra day for USPS to deliver, they have several other choices.

USPS should stop trying to complete where they aren't competitive, and just scale back the operations and be good and efficient at where they have an advantage -- reach.

As far as Amazon's distribution centers, the majority of Amazon delivers are via UPS not via USPS so I don't think it would make too big of a difference. And UPS already has "Ground" (cheap) service with a 1-day delivery time if it's within the same zone.

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  #48 (permalink)
Pedro40
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Big Mike View Post
USPS's specialty is not speed -- but reach, in my opinion. Like your Nowhere, Nebraska example. If someone in Nowhere, Nebraska can't wait the extra day for USPS to deliver, they have several other choices.

Reach and price. Amazon has razor thin profit margins. If shipping goes up, they simply can't compete anymore. I use them a lot and I can wait a few days, so I think Bezos puring money into distro centers was a huge mistake, but time will tell...

I think the cheapest letter price for Fedex was $5+, somebody correct me if I am wrong. That is quite an increase from the forever stamp...

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Pedro40 View Post
I think the cheapest letter price for Fedex was $5+, somebody correct me if I am wrong. That is quite an increase from the forever stamp...

But Amazon isn't mailing letters. To mail a Priority Mail package it's around $5.50 with USPS if it fits in one of their envelopes. Media mail is cheaper, but to my knowledge Amazon doesn't use media mail.

Anything larger than what fits into an envelope, Amazon will ship it via UPS almost always in my experience. Thankfully, too, because my postal carrier is so lazy she tries to cram everything in the mailbox instead of putting it on my porch.

Mike

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  #50 (permalink)
Pedro40
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Here are some more facts:

"Since 1971, the postal service has not taken a dime from taxpayers. All of its operations — including the remarkable convenience of 32,000 local post offices — are paid for by peddling stamps and other products.

The privatizers squawk that USPS has gone some $13 billion in the hole during the past four years — a private corporation would go broke with that record! (Actually, private corporations tend to go to Washington rather than go broke, getting taxpayer bailouts to cover their losses.) The Postal Service is NOT broke. Indeed, in those four years of loudly deplored "losses," the service actually produced a $700 million operational profit (despite the worst economy since the Great Depression)."

The Truth About the U.S. Postal Service by Jim Hightower on Creators.com - A Syndicate Of Talent

"In 2006, the Bush White House and Congress whacked the post office with the Postal Accountability and Enhancement Act — an incredible piece of ugliness requiring the agency to PRE-PAY the health care benefits not only of current employees, but also of all employees who'll retire during the next 75 years. Yes, that includes employees who're not yet born!"

"This politically motivated mandate is costing the Postal Service $5.5 billion a year — money taken right out of postage revenue that could be going to services. That's the real source of the "financial crisis" squeezing America's post offices.

In addition, due to a 40-year-old accounting error, the federal Office of Personnel Management has overcharged the post office by as much as $80 billion for payments into the Civil Service Retirement System. "

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