The Senate To The Post Office: Money-Saving Measures? No Way!
The Post Office, which is losing $25 million a day, wants to make money-saving reforms and the Senate is determined to block them. From the WSJ op-ed page:
Management wants to close about half of its mail processing centers and some 3,000 unnecessary post offices--letting Wal-Marts or local stores take packages and sell postage stamps. But the Senate bill creates new rules to prevent or delay this.For example, Postal Service managers want to save $2.7 billion by changing mail deliver standards (such as relaxing overnight delivery requirements for some first-class mail), but the Senate bill locks in current standards for three years.
Managers want to renegotiate absurd no-layoff labor contracts to shrink its labor force faster. The Senate bill denies that authority.
Managers want to end Saturday delivery as soon as possible. The Senate bill allows this in two years but only if a federal study certifies there is no viable alternative. Republican Senator Susan Collins of Maine, a cosponsor of the bill, has said she believes ending Saturday delivery will put the mail service in a death spiral. Compared to losing $25 million a day?
...The Senate bill is the result of one of those unholy political alliances of Democrats, who don't dare take on the union lobby, and Republicans who don't want local post offices shut on their watch. The Senate waived five budget points of order that were intended to prevent such fiscal raids. So bleeding Uncle Sam will borrow $34 billion to give to the bleeding Postal Service. Glad to have solved that crisis. Next issue?
...The larger story here is how difficult it is to reform any government operation, even one that everyone admits is broken. In the private economy, a company that loses money every year eventually declares bankruptcy and restructures or dissolves. In government, political constituencies protect a loser as long as Congress can keep soaking taxpayers.







When was the last time that any sector of the federal government cleaned itself up?
Seriously asking. Nothing comes to mind. Business sometimes pull themselves out of a tailspin.
But so far as I know, no government agency has simply been improved... Functions get moved around, departments appear to be dwarfed as surrounding agencies continue to grow...
But broken government never gets any better. They don't have to, and they know it.
Crid [CridComment at gmail] at May 2, 2012 12:12 AM
I'm convinced that government agencies have a mandate to prevent people from doing anything. While that sort of makes sense when it comes to the idea of preventing a government agent from raiding the treasury for her personal use, one can see it doesn't work all that well because the only person with the time to navigate the restrictions is said government agent.
I'm trying to get a 36" inkjet printer fixed. If it was private property, the tech would have shown up instantly, installed the 5V power supply the on-line diagnostics indicate, and we'd be good to go.
Out there on the Federal reservation, I have to file a Statement of Work, fill out a 3-page evaluation on safety hazards in case a crane will be used near a power line, file a service request on a computer system which takes 25 pages of instructions to order safety shoes and be assigned a Service Technical Representative.
Meanwhile - it's an inkjet printer, basically as risky as the one in your house. If it didn't cost over $9500 retail, it would be in the dumpster, and in fact other such printers have been sent out the gate as scrap at auction for the same problem.
Radwaste at May 2, 2012 3:02 AM
Government entities are very good at justifying their own existence and expanding their influence if they can. Am I wrong in thinking that Department of Defense is easiest to change? While the political battles can be acrimonious, military bases do get closed, ships do get retired, Army divisions and fighter wings do get inactivated (though why we still have a bomber base in South Dakota is something I don't understand).
Old RPM Daddy at May 2, 2012 4:52 AM
Old RPM... it sounds like the Post Office WANTS to change.
If what they're concerned about is stores jacking up prices on stamps and shipping, they could put in a legal clause that prevents that, and then the stores could decide whether or not it is worth their while to sell packages within those parameters.
I remember before it became Bank of America, you could get stamps at the BayBank ATM. That was awesome. Why'd they do away with that?
NicoleK at May 2, 2012 6:14 AM
You can get stamps at any wellsfargo ATM. Do these idiots in congress really thuink that NO company would step up and deliver all those billions of pieces of mail, if the post office went away? Of course they would. They'd be lining up to bid it. And many already ahve the infrastructure needed to do so.
momof4 at May 2, 2012 6:21 AM
The reason there's a SAC base in Rapid City, South Dakota can be demonstrated here: http://www.gcmap.com/mapui?P=RAP-SVO
I R A Darth Aggie at May 2, 2012 6:35 AM
I've never understood Saturday delivery. It really messes with the schedules. (And become very apparent when you have the substitute that one day a week and they mess up the mail.)
Incidentally, my local post office is very busy (with a very good staff.) Yet, I've been in others that seem like a ghost town. And others with very poor workers.
If what they're concerned about is stores jacking up prices on stamps... they could put in a legal clause that prevents that...
I believe such a law already exists. Regardless, I rarely use stamps, but when I've bought them at various stores, I've always paid face value.
Joe at May 2, 2012 7:47 AM
I am not sure the post office has really thought this out. It looks to me like they are cutting some of their manage advantages.
This is based on the changes they had proposed a few months ago so things might have changed.
Currently, delivery of my rent payment should be over night but will some times take 2 days (by the official schedule I found on usps.com back when I researched it). After the changes it will take at least 2 days, likely 3 and possibly 4.
This payment just passed I could safely mail on Sat to be sure they got it on tuesday. Under the new plan I would need to mail on last Wednesday to be safe.
The Former Banker at May 2, 2012 8:37 AM
this is the important thing to know with government... if you ask them for help, they tell you how to run things...
The postal service shoulda asked to be taken completely private. Then maybe they could reorganize the way that's needed without as much interference.
SwissArmyD at May 2, 2012 9:47 AM
The USPS could never be taken private. No one would invest in an organization with such a heavy pension liability, such a grossly inefficient operating system, and a wholly outdated business model. Especially when competition exists without those handicaps.
The Post Office is the last buggy whip manufacturer trying to stay alive in the age of automobiles.
All the things the Post Office exists to transmit are increasingly being transmitted via other, more efficient methods.
Private companies like DHL, UPS, and FedEx have already shown they can do the job better and more efficiently. If they were allowed to carry first-class mail, the service level would not suffer (and would probably improve) - albeit at a slightly higher per-envelope rate.
What's more, their package services would serve to subsidize the mail delivery and would insulate the companies from the eventual demise of paper correspondence.
The Post Office's continued inability to deliver packages and priority documents in a timely manner removed it from those fields years ago. It's monopoly on first-class mail is the only thing justifying its existence and taxpayer subusidies are the only thing keeping it alive.
Electronic bill pay, e-commerce, e-mail, texting, Twitter, Facebook, and other modern communication tools are quickly making non-package mail delivery a historical oddity.
Those who still cling to the past and want to post a letter or receive a paper bill are fast becoming the minority and do not autmotically deserve government subsidization for their stubborn refusal to adapt.
Let them pay the unsubsidized freight; the rest of us have g-mail.
Conan the Grammarian at May 2, 2012 10:52 AM
Do these idiots in congress really thuink that NO company would step up and deliver all those billions of pieces of mail, if the post office went away?
***
I think it is more that they think the companies would try to bilk the customers by charging much more, as do UPS and FedEx, and that there won't be a cheap option for poor people anymore.
There's a reason the lines at the post office are longer, and it isn't the lack of a free market option.
I wish your site had cookies that kept my name and email in the little windows.
NicoleK at May 2, 2012 12:23 PM
There are already cheap options for poor people. One's called e-mail. Another's called texting.
Ever seen a poor person in the US who couldn't open an e-mail account or get a cheap phone (T-Mobile gives unlimited texting for $50/month)?
FedEx and UPS would not "bilk" the customer. They would assess the actual expense of getting a letter from Point A to Point B. Volume would keep the cost low as fuel and other costs are apportioned among several pieces of mail going in the same direction. Competition would encourage each carrier to keep costs as low as possible.
The USPS charges a politically-acceptable rate. The actual cost of sending a First Class letter is then subsidized by Third Class Mail (catalogues, flyers, etc.) and the taxpayers.
Conan the Grammarian at May 2, 2012 12:57 PM
My local newspaper managed to find the 'downside' of consolidating the sorting centers. Apparently they moved all of the magazine deliveries to another sorting center so there is an 81 year old woman who hasn't been receiving her weekly magazines on time (if at all). The response from the post office was that it was a new system and there were kinks to be worked out. If it was privately run, they would have found a way to compensate the woman. But with a government agency it is a that is too bad situation, with no real apology.
http://www.stamfordadvocate.com/local/article/Angela-Carella-Signs-of-Postal-Service-troubles-3527856.php
DebbieCT at May 2, 2012 2:19 PM
"The actual cost of sending a First Class letter is then subsidized by Third Class Mail (catalogues, flyers, etc.)..."
Are you sure about this part? By weight, 3rd Class is much cheaper.
Radwaste at May 2, 2012 2:22 PM
It's been far too many years ago - and the sites are long since gone, but I looked into some of the math way back when.
The bulk mail was in no way paying the way.
The USPS was building HUGE multi-billion dollar sorting/store/caching facilities (union scale construction, etc.) that were going to take many, many, many years to recoup, while raising rates dramatically on first class, and barely, if at all, on the bulk stuff.
But the "future" was going to be the bulk mail, the heavy catalogs, the mail order stuff.
At the time I derided their choices - jack up the rates on the bulk stuff, which is going to be sent anyway, if it is. It might not be sent as much, but it was driving the massive costs, and was some $HUGENUM of weight and problems.
The First Class postage, which kept going up, pretty much as a political weapon, wasn't the reason for the increase, but it was a way to make sure people noticed the problem.
Unix-Jedi at May 2, 2012 2:30 PM
According to the USPS Inspector General's October 6, 2011 Postal Service Revenue: Structure, Facts, and Future Possibilities report:
http://www.uspsoig.gov/foia_files/RARC-WP-12-002.pdf
The inspector's report is very interesting reading - it outlines some of the legal and political hurdles the USPS would have to clear in order to become competitive again.
Conan the Grammarian at May 2, 2012 3:20 PM
I'm actually somewhat sympathetic to the Senate's actions, here - especially in rural communities, these post offices are community centers. Elderly people living out in the country would experience hardship having to go to a neighboring town to get mail, send packages to their grandkids, etc.
But of course we can't be throwing away $25 million a day, so why not just put these to-be-closed offices up for sale? Maybe the community could buy it, maybe a few rich people in the community, or maybe some company would step in. As for the pensions - being promised "we're going to confiscate a bunch of other people's money and give it to you" isn't the most morally binding notion ever, esp. when we consider the cost of keeping those corrupt promises.
CB at May 2, 2012 6:07 PM
Conan, poor people have to mail shit, too.
CB, how is, "In lieu of paying you more now, we're going to pay you more later if you do your work a certain amount of years. Oh wait, you've done the work? Too bad, we're not going to pay you" a moral notion?
NicoleK at May 3, 2012 3:18 AM
Conan, FedEx and UPS already DO charge super high prices. That's why there's never a long line there at Christmas (in my experience). They're not going to get cheaper when they don't have the USPS to compete with anymore.
NicoleK at May 3, 2012 3:19 AM
"Private companies like DHL, UPS, and FedEx have already shown they can do the job better and more efficiently. If they were allowed to carry first-class mail, the service level would not suffer (and would probably improve) - albeit at a slightly higher per-envelope rate."
Not true. Besides the fact that DHL is the worse shipping company I've dealt with, all of them went after the high margin cream of the shipping market, to the detriment of the USPS.
The costs of delivering first-class mail--letters--is huge because it is so labor intensive. A single Fedex driver can take care of my entire town and then some, delivering just first-class letters requires dozens of drivers. It doesn't scale.
To put it another way, to send a letter to a town twenty miles south of me would cost 45 cents by USPS, but $16 by Fedex and the letter by USPS would get there faster (to match the delivery speed of USPS would cost me $22. To sent that same letter to my sister on the other side of the country would still cost 45 cents by USPS, but $24 by Fedex.
Joe at May 3, 2012 7:43 AM
Whoa, I missed that doozie.
Conan the Grammarian:
Private companies like DHL, UPS, and FedEx have already shown they can do the job better and more efficiently.
You've never _used_ DHL, have you?
I've pondered for years how they stayed in business - and then watched them go under a couple of times, and the best observation I have is they get mega-huge contracts, with promises of super-low prices undercutting UPS and FedEx, and then spend that while the companies rack up complaints and presumably, eventually sever relations.
It's the only thing I can think of that MIGHT be working.
Those who still cling to the past and want to post a letter or receive a paper bill are fast becoming the minority and do not autmotically deserve government subsidization for their stubborn refusal to adapt.
Let them pay the unsubsidized freight; the rest of us have g-mail.
Stubborn refusal to adapt. Huh.
Well, I guess that's one way of looking at it.
On the other hand, you might want to consider what you'll do when Google decides you don't need access to your email anymore. (Ferinstance)
Or when you get sued for not acknowledging the legal contract they emailed you and paying the bill. Etc.
Not that I'm totally unsympathetic to your views, but on the other hand, there's a lot of problems with a fully privatized model. Not unsolvable, but with some drastic changes, and with some drastic outcries when the company Doesn't Care About Your Problem.
I've seen more customer service recently from USPS than UPS or FedEx, and "FedEx Ground" I suspect is a cunning plan, secretly sponsored by the USPS, to protect themselves.
Unix-Jedi at May 3, 2012 9:18 AM
FedEx and UPS charge higher prices because they're not delivering first class mail. They're in the package and priority mail delivery business.
If they are allowed to get into first class mail delivery business, they're going to get cheaper because they'll still be competing against one another ... and any other company that decides to get into first class mail delivery business.
And because they'll be trying to keep you from deiciding they're so expensive you might as well e-mail that photo to grandma and go through the hassle of talking her through the steps to download it rather than pay their fees and mail her a photo.
Never said they didn't.
Privatized mail delivery will not prevent them from doing so.
Both FedEx and UPS work with e-tailers in the fulfillment end of the business to reduce costs and increase efficiency. There's no reason to think they won't work with businesses in the first class mail business as well.
My bad on that one. DHL is apparently out of the domestic shipping business in the US.
Based on everyone's comments, probably for the better.
Because they're legally barred from delivering first class mail.
The USPS has a legal monopoly on first class mail delivery in the US.
And which organization do you think will have higher labor costs, the heavily unionized USPS or the non-unionized FedEx?
Didn't say it would be a perfect model. Details will still need to be worked out.
However, massive subsidies to sustain an unsustainable government agency in a dying industry is not the solution to the problem.
My uncle refuses to get a computer. He sends handwritten letters.
Love 'em. There's something archaic and tactile about a letter that you just don't get with an e-mail. There's a joy in getting a letter in your mailbox that a ding in your e-mail inbox simply can't equal.
But, it makes it difficult to just drop him a line or send him a picture. Letters have to be planned and require logistics (write it, get a stamp, find a mailbox). E-mail is almost an afterthought.
Conan the Grammarian at May 3, 2012 12:06 PM
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