The US Postal Service's Business Model Is Outdated. Is It Time To Wind It Down Or Privatize It?

from the please-mail-me-a-buggy-whip dept

Just recently, we discussed whether or not ceasing Saturday delivery was a good idea for the USPS. John Potter, the US Postmaster General, recently said that the postal service’s business model is as outdated as the newspaper industry’s. Potter said:

“Twenty years ago we would laugh at the notion that a newspaper would ever embrace the idea that maybe the channel of the future is electronic and that you may have to change your business model,”

Sure, similarities between the industries definitely exist. Craigslist is a much cheaper and more efficient marketplace for local goods than the classifieds section in the newspaper ever was, and email is a much cheaper and more efficient means of communication than snail mail. That said, whereas for the newspaper industry, delivering a daily, physical newspaper to households may actually be an endangered business, the business itself of delivering physical items to households is still very much in demand. After all, with so much shopping happening online nowadays, someone still has to deliver the goods (until replicators, a la Star Trek, are perfected). In fact, for over a decade now, we’ve been talking about this opportunity to optimize the “last mile,” and as of yet, nobody has really even come close to solving this problem.

That said, the USPS is a government institution, and even though it does not take any tax funding to run, an attempt to attack this opportunity may best be mounted by the private sector (like UPS and FedEx), especially when you consider the USPS’s projected $238 billion shortfall for the upcoming decade. So, since it’s not a private business, the best solution for the USPS may be to simply accept its diminishing role in the daily lives of Americans, and focus on continuing to run as efficiently as possible for as long as it remains useful. That said, the other solution may be to remove the government-mandated monopoly and privatize the USPS, and then let that private entity decide whether or not to invest in the business. Either way, it seems silly to ask taxpayers to invest anything further in the USPS since so many alternatives exist already. We should definitely all be appreciative of the part that the Postal Service has played in the foundation of our country, but what else can be done?

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Companies: fedex, ups, usps

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Comments on “The US Postal Service's Business Model Is Outdated. Is It Time To Wind It Down Or Privatize It?”

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Anonymous Coward says:

Re: Universal Delivery

Universal delivery is a myth for much of the US. I lived in a small community, next door to our post office and didn’t have local delivery. This was not an issue for me as the walk next door was about what it would have been to the mail box. Many of the 400 other residents in the community that the post office served, had to stop in at their convenience to get their mail. The last mile is already left to the “customer” in many parts.

Nastybutler77 (profile) says:

Re: Re: Universal Delivery

“Universal Delivery” doesn’t mean to your doorstep, it means to your community. If privatized, the mail won’t make it to Adak, AK (Google map it) or other very small, very isolated communities. Are the 400 residents of your community really that inconvenienced by haveing to go to the post office? At least they don’t have to drive (or fly) to the nearest city.

Nastybutler77 (profile) says:

Re: Re: Re:2 Universal Delivery

“What is stopping all the small, rural and remote communities from getting together and creating a postal co-operative?”

In a word, “cost.” Flying a plane round trip from Anchorage to Adak (2400 miles) to deliver a handful of letters and packages to the roughly 300 people there would be cost prohibitive in the extreme. Say they form a cooperative and split the cost, it’s still going to cost them a boatload. Even if the plane makes several stops at other communities along the way, it’s still to expensive to do the way the postal service does it now.

The only way to make it work would be to cut back to only one or two deliveries per month.

As for FedEx, go to their website and see what it costs to deliver a 1 lb. box to Adak. Then tell me that’s something you’d want to do on a regular basis.

As for food and other goods, that’s all brought in by barge which isn’t exactly the fastest means of delivery.

Bulk Mail Tech says:

Re: I sned in on another site..

There is a reason that your Bulk Business Mail is so much less than First Class Mail. It is presented to the USPS already sorted and, in the case of major mailers, in the walk sequence of the carrier route.

So all of that mail may hev to only be processed on one machine, one time. Your letter, on the other hand, must pass through at least 4 different machines to arrive at the same sort level that the major mailers have already done.

In short, they do half of the processing BEFORE the USPS even sees the mail, so they only pay half the price. Simple economics.

Falindraun (profile) says:

Here are some ways for the USPS to save money, raise the price of stamps and packages, close post offices that are too close together or not used enough, stop saturday delivery.

Here are some reasons why none of those things will ever happen. First who wants to be the senator to have a post office close in his or her district. Second there are at least 4 different commities that have oversight over the USPS and all of those senators are progressive communist bastards that all believe that government is to provide free services to all, which could not be further from what the actual role of the government is.

Haywood (profile) says:

Re: Re: Re: union

Not to mention the fact the lack of motivation while they are working. I’m not attacking the troops, the carriers work hard. They have been time studied until the don’t have time to pick their noses. Go inside some post offices and it is another story, people just up and go on break with 20 people in line, clusters of management shooting the breeze.

mycroftt (profile) says:

Re: Re: Re: Re:

USPS retirement already IS 30 years “like every where else.” There are two pension plans Civil Service Retirement System for those hired before 1984 and Federal Employees Retirement System for those hired after. To qualify for retirement you need 30 years service and age 55 years for CSRS. FERS is a bit more complicated because it isn’t a fixed-benefit pension but is more like a 401-k where the benefit is determined by the contribution.

Unforgiven (profile) says:

Re: Re: Re: Re:

You need to get a clue, there is no retirement from the post office at 20 years. You’re also uninformed on military retirement, since the military retirement system has also changed in the last 20 years. Retiring at 20 years used to mean 50% retirement pay, it’s now something like 40% and would take retiring at 30 years to earn up to 50%, but don’t hold me to that. I’m just informing you that you’re obviously ignorant of the retirement benefits that the federal workers, postal workers and military actually receive.
And to the person wanting to break the unions, consider this. If postal management followed the contract and treated their employees with dignity, there would not be a union. If all major employers had throughout history treated their employees with dignity, respect and a fair wage, there would never have been unions. So instead of railing against unions, maybe you need to work toward a system that makes them unnecessary.

Michael Long (profile) says:

Re: Re: Re:2 Re:Unions

Unions once solved major imbalances in worker rights and workplace safety.

Today, like most organizations, they exist primarily to perpetuate their own power. Rather than working with management to solve problems, they’re forced to demand more and more and more. More money, more benefits, more time off, and so on, all to justify their own existence and the dues members pay.

The auto unions killed Detroit, a clear case of killing the goose that laid the golden eggs.

How is it that Toyota or Honda can build a profitable plant here in the US making cars with US labor… and we can’t?

Anonymous Coward says:

Re: Re:

“…and all of those senators are progressive communist bastards that all believe that government is to provide free services to all, which could not be further from what the actual role of the government is.” i realize that was sarcasm but the role of the govt is to keep order and run things

hegemon13 says:

Re: Re: Re:

“…i realize that was sarcasm but the role of the govt is to keep order and run things.”

And “run things”? I don’t think so. The fact that you think this is the role of government is a terrifying sign of the times.

The role of government is protect life, property, and freedom. I do believe that part of that role means ensuring a system of free-flowing communication nationwide. The question is, does it need to be physical mail anymore? If so, does it need to be government-run anymore, or can we allow private industry to take over the role with “last-mile” regulations?

Vincent Clement says:

Re: Re:

Privatize the postal outlets. In Canada, the majority of Canada Post outlets are private operations. My city has a population of 210,000 and there are only two corporate postal outlets (and one of them will likely close down in near future). The remaining postal outlets are located within stores such as Shoppers Drug Mart or Rexall Drugs and are operated by those chains.

ECA (profile) says:


“which could not be further from what the actual role of the government is”

ANd, should i ask, what is your OPINION of How the gov should be run?

the USA gov is given the power to PROTECT the people. ANY way they see fit.
NOT the corps.
And what is funny about this country? is that EVERY major advancement has Been done by the USA gov. NOT THE CORPS.
The continental rail, was BACKED by the gov. Then those that had money in the railways, PULLED out the money and let it stagnate..
The CORPS didnt build the bridges..
NOR did they build MOST of the Electric power. the Dams and nuke plants were built buy the GOV..
They werent going to place FIBER, until the gov gave them the money to DO IT..
The gov should go back and PULL ALL MONEY from the corps, BUILD what is needed, then SELL IT BACK to the corps, or keep it and MAKE MONEY off it. Including along the freeways and remote areas that CELL corps WONT GO.
I would LOVE the gov to start its OWN grocery/retail COMPETE with the corps. IF the corps WANT IT, they can BUY IT..
Only problem is the Gov sells things at PENNIES ON THE DOLLAR..ask army surplus..

Ima Fish (profile) says:

Wind It Down Or Privatize It?

One simple change in federal law could solve this problems Under the current law only the USPS can place mail and packages in your mail box. Fed Ex and UPS cannot.

That law is the biggest impediment to competition and innovation in mail delivery. Revoke the law, let everyone compete in the mail delivery process, and we’ll all benefit in the long run.

mycroftt (profile) says:

Re: Re:

No thanks. I would prefer not to have more hands in my mailbox where First-Class Mail contains personal information like credit card and bank account numbers and maybe even Social no-Security Number. UPS and FedEx have no problem at all delivering my parcels (most of which won’t fit into the mailbox) to my front porch. Besides, there is nothing that prevents you from erecting another delivery box for other carriers – just don’t get one that says US Mail on it.

Ima Fish (profile) says:

Re: Re: Re:

I don’t know if you realize this, but there is simply no security when it comes to mail boxes. Currently anyone, even if they work for FedEx or UPS can open and steal your mail. This law was not intended and does nothing to stop anyone from stealing your mail or your identity.

The purpose of this law is to prop up the USPS. Sure, UPS and FedEx does a great job with your packages, because currently it’s essentially illegal to for it deliver first class mail. Why not also allow the UPS and FedEx do a “great job” delivering first class mail? Do you have any reason to think they’d do a worse job than the USPS?

And why should we erect a separate mail box? That makes no ficken sense. Let’s make an asinine law for the sole purpose of protecting an inefficient service, and lets make it even less efficient by making everyone in the country install yet another mail box. I’ve never met you before, but I can tell you’ve never run a business. Your ideas are the opposite of efficiency.

mycroftt (profile) says:

Re: Re: Re: Re:

I realize quite well the low level of security in a mailbox and I don’t want to lower it any more by having those UPS and FedEx people, who you state can steal my mail, putting heir hands in it. If you open it up to use by anyone, every Tom, Dick, and Harry will be cramming stuff in there. As I said, no thanks. It is a terrible idea fraught with problems and offers no advantage whatsoever.

Ryan says:

Re: Re: Re:2 Re:

Those UPS and Fedex people can already put their hands in your mailbox and steal your mail, and I’m sure the penalty for the latter is greater. So how exactly does it decrease security to allow them to place mail in your mailbox? Either way, stealing your mail would be illegal. You seem to be sticking your head in the sand and ignoring this point for whatever reason.

Additionally, the advantage is that we could open up first-class mail to competition without having to double our mailboxes, which is just about the dumbest idea I’ve ever heard. Private carriers can and do operate much more efficiently and more effectively than the USPS, and they do so without a $250 billion debt that will otherwise have to be subsidized.

mycroftt (profile) says:

Re: Re: Re:3 Re:

Opening up First-Class Mail to competition is an issue outside the scope of the previous dialogue. I agree 100% that, if the other carriers were authorized to carry First-Class, then they should have access to the mailbox too. This hasn’t happened yet so I don’t want them in there. UPS and FedEx are not the problem anyway – they are honest professional delivery firms who would not be likely to tamper with oter materials. If you open up the mailbox you are going to have kids on bicycles going in there several times a day delivering fliers and helping themselves to whatever they want. It was Ima Fish who mistakenly believed that only UPS and FedEx would be in your mailbox.

Rya says:

Re: Re: Re:4 Re:

Opening up First-Class Mail to competition is an issue outside the scope of the previous dialogue.

If you privatize the USPS, there is no more government mail service. Not sure how you do that and not end the government monopoly on first-class mail, unless we’re just gonna make it illegal to send letters.

If you open up the mailbox you are going to have kids on bicycles going in there several times a day delivering fliers and helping themselves to whatever they want.

Again…kids can already do that! It’s illegal for them to take mail or to break in either way, and I’m guessing very few kids are discouraged from sticking fliers into unlocked mailboxes because it’s illegal but rather because they don’t really have any desire to. Whatever problems there might be, I’m sure that a solution would be quite easy compared to the larger issue of lack of competition and the USPS’ debt.

mycroftt (profile) says:

Re: Re: Re:5 Re:

Please stop being deliberately obtuse – it is unbecoming and makes you appear clueless when you are not so. Of course people can go in your mailbox and steal stuff – the point is that having more people going in there increases the chance that someone will actually take something. The more people go in there, the more likely a crime of opportunity will occur. You might want to do a little research on that debt issue there. The government owes USPS $75 billion – not the other way around.

mycroftt (profile) says:

Re: Re: Re: Re:

In response to your question about whether I have any reqson to think UPS and FedEx wouldn’t do a good job with First-Class Mail: No, I don’t think they would do a bad job. They are the class of the parcel delivery industry and I assume they would do well delivering First-Class too. The problem withyour proposal is that they don’t want to get into the First-Class Mail business. It would require an enormous capital investment and there would very likely not be any appreciable return. First-Class Mail is the portion of the mail market that is drying up and nobody in their right mind would invest billions to get into a dying market. You might as well invest in building a buggy whip factory.

Ryan says:

Re: Re: Re:2 Re:

Then there’s absolutely no reason whatsoever not to open it up and end the USPS’ monopoly, is there? If nobody decides to offer it, then we’re not out a thing.

But I highly doubt that’s true at all. Both UPS and Fedex have expressed their interest in that business before and most of the overhead is already established for parcel delivery. And there’s no reason why a single entity would have to operate wire-to-wire; there may well be many companies operating segments, for instance specializing in local delivery. This is another reason why thinking that rural areas wouldn’t get any delivery is a red herring, because if there is a demand for it, somebody will spring up to meet it. It may be more expensive, but then it should because it’s more expensive to deliver mail to the boondocks than to downtown.

mycroftt (profile) says:

Re: Re: Re:3 Re:

The only reason of which I am aware that it might (note “might”) be a bad idea to open up First-Class to the other carriers is they will skim the profitable areas and not deliver to the unprofitable areas. This means that it will either cost several dollars to mail a letter to those areas (essentially every address not in or near an urban center) or the government will have to subsidize USPS to serve those areas. Subsidizing USPS is not something that Congress wants to do and paying more taxes to subsidize a service that currently needs no subsidy is not something that I want to do. This isn’t just hypothetical either – it is based on what is happening today. USPS currently carries millions of parcels “the last mile” for UPS, FedEx, and others because their delivery networks do not extend into unprofitable areas. USPS goes there because of the combination of the universal service requirement and the legal monopoly on First-Class Mail that was devised to ensure that the above scenario does not happen.

mycroftt (profile) says:

Re: Re: Re: Re:

Read Domestic Mail Manual (DMM) 508.3.1 below. The DMM is incorporated by reference in Title 39 of the Code of Federal Regulations, so it is federal regulatory law. There’s a $300 fine for putting aything in a mailbox that doesn’t have postage on it. If you like your UPS guy you might want to warn him that he could get in trouble for putting stuff in your mailbox. The USPS carrier is also authorized to seize any material that doesn’t have postage and bring it to his postmaster but I doubt that happens very often.

3.1 Basic Information for Customer Mail Receptacles
3.1.1 Authorized Depository
Except as excluded by 3.1.2, every letterbox or other receptacle intended or used for the receipt or delivery of mail on any city delivery route, rural delivery route, highway contract route, or other mail route is designated an authorized depository for mail within the meaning of 18 USC 1702, 1705, 1708, and 1725.

3.1.2 Exclusions
Door slots and nonlockable bins or troughs used with apartment house mailboxes are not letterboxes within the meaning of 18 USC 1725 and are not private mail receptacles for the standards for mailable matter not bearing postage found in or on private mail receptacles. The post or other support is not part of the receptacle.

3.1.3 Use for Mail
Except under 3.2.11, Newspaper Receptacle, the receptacles described in 3.1.1 may be used only for matter bearing postage. Other than as permitted by 3.2.10, Delivery of Unstamped Newspapers, or 3.2.11, no part of a mail receptacle may be used to deliver any matter not bearing postage, including items or matter placed upon, supported by, attached to, hung from, or inserted into a mail receptacle. Any mailable matter not bearing postage and found as described above is subject to the same postage as would be paid if it were carried by mail.

Anonymous Coward says:

Re: Re:

If the USPS goes private you won’t have a mailbox for anyone to put anything in. You will be going to the corner or across town to get your mail because Private industry will not deliver mail to every house like the USPS does. Be careful what you wish for. UPS and Fedex pick their market. Anything to rural offices is delivered by the USPS.

davidclark (profile) says:

Re: The Mail

You people think privitization and ‘free enterprize’ just solves everything. It doesn’t. Frankly, I use FedEX for next day pouches and UPS to return cores- which are ALREADY broken. UPS counter service sucks and price ain’t everything.
If the sanctity of competetion is so damn important, look at your underwear,TV, computer, our car – and the American jobs that somebody lost for the sake of Free Trade. I’ll run my Ford truck against your riceburner anyday.
And don’t blame it on the unions either – UPS is union, and FedEx is headed that way. Try to complain about service sometime and see where that gets you.

Small Business Advisory (profile) says:

Last mile done better

Here’s my 2 cents.
Make post office work 24 hours, 7 days a week. Schedule parcel deliveries several times a day, so that if a package comes into relay station at 4:54pm it is actually relayed and moved on to the next station as soon as it is processed. Deliver it it the destination at 9pm or 10pm or even 11pm (see: this post). I’ve seen lines of dozens of people picking up packages at UPS store at 10pm – so give commercial services run for their money. Make Saturday and Sunday deliveries, when UPS and FedEx are asleep. Give me something that has more value than other commercial services. Small businesses work on weekends, they could use it. Lawyers, accountants, geeks and gadget freaks, heck – even regular boring people like me who actually work the same hours UPS is open – we all would appreciate the service that’s there for us.

tsinark says:

That would be OK as long as you let the USPS cherry pick the customers they would like to provide with service. I’m sure if they eliminate all the deliveries and retail units that are not cost effective they would have a brighter future. All or none or pick and choose, you can’t have it both ways. If a private company came in and picked the areas that were profitable eventually the other areas would be the only thing left for the USPS. How do think that will work?

Anonymous Coward says:

Post Office Not Outdated

Contrary to what everyone seems to think, USPS is not in the slightest outdated. In fact, it is one of the more efficient ways to ship things. FedEx, UPS, et. al offer nowhere near the same realm of services as does the USPS. I can’t ship something with FedEx for less than $5, while with USPS I get free nationwide shipping with their flat-rate parcels. Similarly, snail mail has many of its uses. 45c a stamp is far cheaper than what UPS would charge. All hail our mailing overlords. 😉

odhinn (profile) says:

Re: Post Office Not Outdated

Except the one thing the USPS really really sucks at… Providing detailed and updated tracking information. What they offer is not “tracking” but a confirmation that the package has left the source and arrived at its destination. No estimated delivery, no progress (ie. scanned in Lexington, KY), no alerts (exceptions, etc.) That is why your packages are $5. When given the choice between UPS and USPS, I will gladly pay the $7 for a UPS Ground package when $5 will get it there via USPS. You pay for quality, reliability, and service.

mycroftt (profile) says:

Re: Re: Post Office Not Outdated

I wouldn’t say USPS sucks at tracking. It is more accurate to say that they do not offer that service with anything other than its Express Mail services. Delivery Confirmation is intended for use by large volume fulfillment firms to conduct automated reconciliation of their orders – when the electronic data feed says a parcel has been delivered the order is deemed complete. I agree that it doesn’t translate well into a valuable service for the retail mailer.

mycroftt (profile) says:

Re: already privatized

The true privatization that has already occurred is in the form of “workshare discounts.” USPS provides price incentives to large mailers who sort their own mail, affix barcodes, and transport it, a.k.a. “drop ship,” to near the destination point. First-Class Mail has presortation and boarcoding discounts but doesn’t yet have drop shi discounts. I think you will see them within the year.

Talk of privatization is fun but it is really moot. Nobody wants it because it would be an enormous capital investment with very, very shaky prospects for any return at all. If you own stock in a company that considers buying out the PO – sell your stock as quickly s you can. It is not a profitable business if you have to cover all addresses nationwide. You could spin off the profitable areas to private firms but that would leave the taxpayers having to subsidize USPS when we do not currently do so.

Fungo Knubb (profile) says:

Sponsored Bicycle Racing

During most of the last few Tour de France bicycle races, I noticed that the USA team was sponsored by the USPS. The next thing I knew, they were raising the price of a first class letter – several times.

How about they DON’t sponsor the USA Tour de France bicycle team and keep the cost of postage down? How about they charge everyone the same for mail delivery? – That would really clean out the SPAM from my snail-mail box.

Ever since the Tour de France sponsorship / postal rate increase, I’ve switched over to 100% bill paying electronically. When I order something via the Internet, I specify either UPS or FedEX delivery. I’m doing everything I can to put the USPS out of business, which is exactly where they belong.

mycroftt (profile) says:

Re: Sponsored Bicycle Racing

The Tailwind contract, a.k.a. the Tour de France USPS team sponsorship is recognized in the advertising industry as some of the best ad dollars ever spent in the history of advertising. The story was incredible as Lance Armstrong dominated the Tour for several consecutive years. USPS got a hefty return on its investment too in terms of increased volumes in its suite of Global service and in brand recognition.

Pa says:

Re: Sponsored Bicycle Racing

Yeah Fungo, That’s exactly where the USPS belongs. Some people really are boneheads. Continue using UPS and FEDEX, they’re both good companies who can raise rates when the price of gas increases or the electricity that is used to light their buildings increases by over 30%, how about heating those same facilities. The USPS DOES NOT HAVE THAT LUXURY OF INCREASING PRICES TO ADJUST FOR THIS, WHAT OTHER BUSINESS WOULD STAY AFLOAT WITH THAT OVERHEAD, PLUS THE RETIREMENT PREFUNDING THAT NO OTHER ORGANIZATION PRIVATE OR GOVERNMENT HAS TO PAY. Actually most people don’t realize ZERO tax dollars are used for the USPS, which as you may have heard charges the lowest price for a first class stamp in the world. Hey, I have an idea let’s spend 800 billion on a stimulus plan and we can bail out private companies like AIG to the tune of 165 billion, then corporate can give out massive amounts of bonus money (excuse me) retention money to those that caused the crapola in the first place. Blame your politicians for the mess. Pay more for UPS and FEDEX, like I said good companies who happen happen equivalent wages as the Post Office.

jethro tull says:

Last mile done better

I love this. the more days we work delivering the more other will do to keep us busy. pacels shipped 7 days a week mean somebody has to produce and someone has to handle and ship these items. Fedex charges extra for saturday deliveries well over 10 dollars and ups wont deliver at all. people work seven days a week. so why cant the P.O, Pick up this volume from its competitors. The volume would be there to justify the pick ups. I see the volume at various businesses on my route on monday from fedex and ups the have large truck back up to the docks for a hour at a time the usps should work seven days a week for the business in manufacturing and shipping departments.

Anonymous Coward says:

What’s really wrong with USPS? They deliver all the stuff I order, and $0.50 to send a letter (if anyone still does such a thing) is still crazy cheap. I think it’s fine.

As for killing the junk mail, that would kill the PS, too. Raise the price of spam, spammers no longer pay to send it, USPS is out of the majority of their income, we all pay more to take up the slack or they just shut down. Boo. Let them keep delivering spam to the people who haven’t blocked it.

I say we all express outrage at phone books, next. Why does someone keep dumping these huge piles of wet mouldering trash on my steps every year?

Oooh, I know, daylight savings! Lets kill DST!

odhinn178 (profile) says:

Re: Re:

Except that since most of the mail anyone receives is junk mail, most of the resources go towards handling that junk mail. Ridding the US of “spam” snail mail would be advantageous because it would:
1. Generate much less waste
2. Utilize far fewer resources at the USPS
3. Allow the USPS to cut some fat and run more efficiently

So, while the revenues would decrease, the costs would decrease as well.

mycroftt (profile) says:

Re: Re: Re:

Not quite true. “Junk mail” is generally presorted and dropped at the destination post office by the mailer so little USPS resource is used in handling it. Plus, the letter carrier still has to go up to every door or mailbox to deliver the First-Class Mail anyway, so the marginal cost of delivering each piece of “junk mail” is miniscule. Paper is a renewable and recyclable resource too – eliminating waste is a good thing but eliminating paper waste is not as important as eliminating other forms of waste.

odhinn178 (profile) says:

Re: Re: Re: Re:

It may be marginal if you receive other mail on a daily basis. Personally, in an average week, three of the six mail delivery days, I receive nothing but junk. Even if the marginal cost difference is one penny per household (think time and fuel as well), there are 130M such households in the USA. Marginal for one home, maybe, but for millions of homes it adds up. Margins count when you’re trying to effectively run a business, not even necessarily to earn any sort of profit. In the case of the USPS, just to break even.

I think the basic point of this article is either change your business model, or get out of the way and let someone else do it better. Otherwise you can’t exactly complain about losing money.

mycroftt (profile) says:

Re: Re: Re:2 Re:

Then the better soluton would be to reduce the margin by not making delivery to an address unless there is First-Class Mail to float the boat. This would reduce your delivery to 3 times a week which shouldn’t really have a bad effect for you. Unfortunately, the USPS’ customer is not the recipient, but the sender who pays for the delivery. Advertisers generally want to pinpoint (as much as possible) the in-home delivery date of their materials. They would have to agree to either paying more or reducing service – what do you think they will say about that?

You seem to have the mistaken notion that USPS makes its own business decisions. To a certain extent that is true but they can not do anything that isn’t approved by Congress and/or their regulator, the Postal Regulatory Commission (PRC). The PRC testimony and deliberations are public records that can be examined by anyone on their website. Anyone can intervene in their proceedings as well. I have done so on many occasions. I would recommend that the folks posting here learn a little bit about the print advertising, product fulfillment and delivery industries and the specific issues of USPS before participating. The level of discourse is significantly higher than is found on internet discussions.

Kirk (profile) says:

Re: Re: Re:2 Re:

“Personally, in an average week, three of the six mail delivery days, I receive nothing but junk.”

Yes, but you still go to your mailbox on each of those days, don’t you?

You’re not listening. Junk mail is not a drain. Junk mail requires less postage because it requires less work. Your first class mail is NOT subsidizing the junk mail. If anything, it’s the reason the post office still delivers mail 6 days a week; it’s because you always have some kind of mail that the USPS can afford to come to your mailbox daily.

Also, junk mail does not represent waste; junk mail exists because someone buys whatever it’s selling. Junk mail is a valuable tool for all sorts of businesses. Get a Parakeet if you have no use for it.

Joe Mail says:

Not Joe Postal

You know, as much as I am not fond of government run institutions, as a personal thing, I can deal with the USPS. I know some folks have issues, but I’ve had consistently good service and living in a state that is large and still pretty rural, I can appreciate what they can do.

I do think, however that it’s probably for the best for things to wind down for the USPS. $238 billion is a lot cash over a decade. Let’s keep ’em around for as long as we can, but let’s find ways to do that efficiently.

John Fenderson (profile) says:

Re: Not Joe Postal

I, too, am a big fan of the USPS. They do a fantastic job, deliver letters and parcels quickly and reliably, and the cost is beyond reasonable. The few times that something has gone awry, they’ve dealt with it quickly and professionally.

I see no serious problems with the USPS, and would hate to see it privatized. My fear is that if that would happen, we’d get worse service at a greater cost.

Michael Bazelewick (profile) says:


Reminds me of what the guy in the patent office said around 1900 … “we might as well close, everything has been invented.” Saturday delivery could be stopped without hardly a whimper … and anything wrong with pricing a service to cover costs plus a reasonable rate of return … an efficiency evaluation by the private sector would probably be in order. In Canada any subdivision built in the last 20 years no longer has door to door delivery, only community mail boxes for every 20 – 30 homes … a short daily walk for people isn’t necessarily a bad thing …and don’t gripe about the disabled, the neighbor would be very happy to do the job. I also have a theory that the USPS could be in the check clearing business … does the model customer prepares check, mails payment, post office picks up, sorts, transports and delivers, vendor deposits … sound efficient?

Kirk (profile) says:

Natural Monopoly

My experience with privatization sucks. My mail is delivered by a guy in a minivan wearing a T-shirt. If he’s sick on Tuesday, I get my mail on Wednesday. Granted, privatization doesn’t have to work this way, but it’s all-too-often the case. The post office gets it done.
Efficiency? Debatable. Reliability and effectiveness? Yes.
The post office delivers to places no one else wants to. If others want to compete, they absolutely MUST take on the responsibility of universal delivery. If they don’t, they’re not really competing, because that’s a BIG part of the USPS’s costs.

matt says:

But there aren't viable alternatives

“…since so many alternatives exist already”

Sure, I can send a Fed Ex, but I really prefer fifty cent stamps to twenty dollar fees.

There is simply no viable alternative, particularly for rural communities, to the USPS for mailing letters.

The only ones who would benefit from private delivery would be the CEO and board of directors of the corporation. I can’t see how the employees or customers would be better off.

blockpusher (profile) says:

The USPS is a Government SERVICE - Lets keep it that way.

The Postal Service is just that – A GOVERNMENT SERVICE……….like the FBI, or the Coast Guard, or the ATF, Homeland Security, etc. Every US citizen is entitled to have their mailed delivered. Put it back under Gov’t control like it was. Don’t worry about “profit”. Do we ask the FBI to turn a profit ??? The Coast Guard ??? Lets privatize FEMA if they don’t “turn a profit” next year…………..

Nastybutler77 (profile) says:

Re: The USPS is a Government SERVICE - Lets keep it that way.

“Every US citizen is entitled to have their mailed delivered.”

Really? I didn’t see that in the Bill of Rights. Yet another example of entitlement thinking. I suppose you think education and health care are other things we’re entitled to? Guess what? We’re not.

Nastybutler77 (profile) says:

Re: Re: Re: The USPS is a Government SERVICE - Lets keep it that way.

I’m a Libertarian actually. But thanks for making an ass of yourself by assuming you know me based off one short comment. Let’s see if I can do the same:

Oh God, another NeoProg, and this one with an opinion on everyone’s political idologies. It’s Bush’s fault, too, you know.

See how stupid that sounds?

David Clark (profile) says:

The Mail

When the Postal Service was founded over 200 years ago, it was a Cabinet level office. It was a critical function of the greatest importance to everyday life for everyone.
And what the hell’s changed?
Back in the 70’s when it was decided that the USPS was to either fly or die on its own power, some fresh washed face on an MBA smiled, pumped the air and tantrumed ‘Run like a business,dammit!”
Well, sonny, it ain’t a business. Its a critical organ business,providers,government and people depend upon and it was never expected to be self-sustaining.People foam at the mouth at rising postage rates and poor service. Uhhh, compared to what? I don’t need Saturday service and all that crap in my box called bulk mail is mailed CHEAP – bulk rate. The Postal Service’s new “If it Fits, it Ships” is a great move towards better customer service and revenue but we need to abandon this BS that the Post Office is a business. It isn’t and it never should have been remodeled as such.Return it to strict government control and forget about digitalizing the mail. I want a Penny’s catalog I can take hunting next winter.

Nastybutler77 (profile) says:

Re: The Mail

Sounds like you should add:

“And you damn kids get off my lawn!”

I guess you’d like the postal service to take on all the great qualities of other government run opperations, like the DMV. Yes that’s a much better way to have the government interact with the public.

In case your sarcasm meter is broken, that was sarcasm.

Michael (profile) says:


The post office should not eliminate Saturday delivery. That is a scarcity that the other services charge more for. Keeping that day actually increases the value of using the post-office.

Where the post-office really needs to compete is with the package services that free/cheep shipping use.

2-3 day delivery is far faster, but my guess is that there is something like a $1-2 difference in cost for a typical package. I however, would typically love to choose the $1-2 option, esp since the packages would then get delivered to the nice LOCKED box instead of my porch.

The only other area that USPS is lacking is the tracking. Consumers don’t necessarily need a per-package validation at every step. Merely watching their package getting closer and having a valid expected delivery date is probably sufficient.

In summary:
* Keep Saturdays
* Provide expected delivery dates
* Provide a ‘best effort’ “It’s in a shipping block (info withheld for security), which was scanned as departing where-ever 2 hours ago headed for this new place.”

Jason says:

Privatization? Do you really think UPS or Fedex wants to deliver the mail universally across the country? They might do it for a profit if they can charge $2 + per letter lol….USPS already delivers about 400 million of their packages a year already…UPS and Fedex dont even compare to the efficiency of the Post Office and they charge twice the amount. People dont realize the restrictions that the post office has, and UPS and Fedex dont have those restrictions. How was their bottom dollar the last 10 years? Oh yeah our bottom dollar also includes 5.4 billion dollar bill we have to pay yearly, which no other company in the world has to pay. Subtract 5.4 billion dollars from Fedex and UPS’s bottom line and then tell me which one is the better company. USPS has to charge less while doing more

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