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Economy
US Postal Service nears default
2011-09-06
[Iran Press TV] The United States Postal Service, which has long lived on the financial edge, is on the brink of a default as it lacks cash to make its payments.

The agency may have to shut down entirely this winter if it cannot be able to make a USD 5.5 billion payment, The New York Times
...which still proudly displays Walter Duranty's Pulitzer prize...
 reported.

Congress should take an emergency action to stabilize the service's finances and prevent its collapse.

"Our situation is extremely serious," the postmaster general, Patrick R. Donahoe, said in an interview. "If Congress doesn't act, we will default."

This is while, the agency is considering cost-cutting measures including laying off 120,000 workers -- nearly one-fifth of the agency's work force -- to ease its deficit which will reach USD 9.2 billion this fiscal year.

The service needs congressional approval to overturn job protections and go ahead with its planned layoffs.

Powerful labor unions are angry with the move and have vowed to take action against it.
Have they considered going on strike? That kind of thing goes over so well, nowadays.
Posted by:Fred

#38  Think about it. Is there _anything_ in the mail you need to respond to within a week? There is no reason to have mail delivered every day. Once every 2 or 3 days work work just as well.

The problem with email is that it isn't secure. Sure I can encrypt a message to you -- if I know your public key - and signing a message is pointless unless you have my public key. Most people just don't bother and there isn't a central authority (not the Government!) issuing certified keys (or having keyservers) and those that do charge far too much (IMHO).
Posted by: CrazyFool   2011-09-06 23:04  

#37  I think their labor costs, fuel and fleet costs would prevent a real dip in prices. They are operating at optimal right now, just my take
Posted by: Frank G   2011-09-06 20:55  

#36  If the USPS were to go away permanently, what are the odds that FedEx, UPS, DHL or a player to be named later would come up with a lower rate for "we'll get it there inside a week" instead of just overnight, 2nd day, etc.?
Posted by: eLarson   2011-09-06 20:43  

#35  The post office just needs to close about 1/3 of their offices. I have at least 5 post offices within 10 miles of my house. Probably need 1 or 2. That will reduce staff costs and pensions and free up a bunch of nice commercial property to sell for new capital investments.
Posted by: rammer   2011-09-06 19:51  

#34  I need the junk mail. It's great for starting fires in the fireplace and outside in the firepit.
Posted by: Deacon Blues   2011-09-06 19:22  

#33  #10 Dr. Steve - today is a good example in my house. One bank statement, one ad to a store where I shop a lot when they have specials (which are all they put in the ad).

The rest? Political ads (mostly begging for money), ads trying to convince me to change my phone/internet/whatever service, and general BS. I also keep getting catalogs that promise "this will be the last catalog" unless I buy something, but they never keep their promise.

I'm more concerned about mailing out my products from our web shop. It would be a royal pain (and much more expensive) if I had to UPS or Fed-Ex them.

Yes, it is all about me. Why do you ask?
Posted by: Barbara   2011-09-06 18:25  

#32  I'd have to agree with JFM, they are not necessarily the same. I know it isn't a very sexy part of history, but why is the USPS one of the activities actually chartered by the Constitution? The courier business is as old as civilizataion, so why would it benefit government to have a post in every township?

I may get 75% usps junk mail, but >95% of the important stuff I receive each month is via usps, likewise going out. That is bills and city/county/state/fed government notifications. Something else the usps does for those of us who do not live in cities or major transport routes is they have a deal worked out where other big delivery gigs can get as close as possible then let the usps finish the journey. See, they have to have predictable delivery costs as well and to send a truck 60 miles out and then back can be a major resource challenge for an already minimal presence. With no usps those on the ends of the system would be at the whim of whomever delivers if it isn't a monopoly or worse no delivery/pickup.

Junk mail may mostly be a pain in the ass, but for an upcoming business it may be the best solution, else a business needs TV time or the ability to pay for mass magazine production. I get e-ads, but it always seems to be the same 10 or so. Junk e-mail gets zapped, automatically assuming it is infected with something.

I'm not saying the USPS is doing it right - it can't. Not with the labor contracts and cronyism. GPUSMC is an interesting look, apparently there will be careerists and then assistants with very different value levels.
Posted by: swksvolFF   2011-09-06 17:03  

#31  FedEx and USPS are not comparable. AFAIK one is mainly a percel delivery service and the other a mail delivery service. Mail de livery is far more labor intensive and parcel delivery uis more transport intensive (ie planes and trucks).
Posted by: JFM   2011-09-06 15:12  

#30  This continual default claim has been going on for years. The donks need to quit building and naming post offices after prominent donks. Might consider getting rid of the unions too. The labor cost for the post office is 80%; Fed Ex something like 30+%.
Posted by: JohnQC   2011-09-06 14:58  

#29  A weeks worth of junk mail wouldn't fit in my mail box.
Posted by: rjschwarz   2011-09-06 14:49  

#28  The mail every couple of weeks doesn't work for bills. Once a week works except the junk mail.
Posted by: rjschwarz   2011-09-06 14:49  

#27  Here's a solution:

Offer a 'no junkmail' service where the PO will dump your junk mail in the nearest shreadder and not deliver it.

My guess is that people would pay for that service.
Posted by: CrazyFool   2011-09-06 14:33  

#26  "Deployed soldiers get mail every week or two. No one bitches. Good enough for them, good enough for me."

Yeah they do. The Post Office at the base puts it in a container, then Soldiers pick up the mail and it rides military transport to the front, where Soldiers deliver the mail.
Posted by: newc   2011-09-06 14:19  

#25  Back in the '30s NYC, at least, got delivery twice a day. Wonder how they did it ;^)
Posted by: AlanC   2011-09-06 13:32  

#24  There was some talk about having mail delivery every other day.
Posted by: CrazyFool   2011-09-06 12:14  

#23  Deployed soldiers get mail every week or two. No one bitches. Good enough for them, good enough for me.
Posted by: Besoeker   2011-09-06 11:58  

#22  Having been an IT consultant for the Post Office, one of the problems is the pricing.

I remember a story about a man who was building a brick house in a remote part of Alaska. None of the shipping companies would deliver his brick for less than the USPS (because the private companies' price reflect cost). USPS, on the other hand, has a policy that all prices in the US should be the same. So the guy mailed his bricks at the package rate and saved himself alot of money. Of course the USPS lost a fortune.
Posted by: Frozen Al   2011-09-06 11:57  

#21  Postal Workers to USPS: DonÂ’t Shred Our Contract

The proposal, which requires congressional approval, has drawn concern from unions and labor observers for its potential to further erode the middle class. And it's renewed fears that other employers will soon follow with their own cost-cutting measures.
Posted by: GolfBravoUSMC   2011-09-06 11:52  

#20  Can't they just jack up the rates for all that junk mail? Maybe then the good folk at Capitol One would think twice before sending me an application every day.
Posted by: Ebbang Uluque6305   2011-09-06 11:46  

#19  Here is the New, Improved, 2011 USPS Union Contract
Posted by: GolfBravoUSMC   2011-09-06 11:42  

#18  AP -this is the postal service - you expect Logic?

Anyone know what is in those Postal Service union contracts? Pension Plans? Etc....

It might be interesting to know (and publish) this information so people know what they are paying form in a bailout. And you know there's going to be a bailout.

Don't expect the LSM to do it's job. They will be declaring how terrible it is that Grandma doesn't get her SS check (which is usually direct deposited these days).
Posted by: CrazyFool   2011-09-06 11:21  

#17  Can't they just print more stamps? And then add the value of those stamps as an asset on thier balance sheet and declare solvency?
Posted by: airandee   2011-09-06 10:35  

#16  The logical thing would be to declare bankruptcy, then all contracts are null and void with the labor unions. Then all you have to get is a competent bankruptcy judge.
Posted by: Alaska Paul   2011-09-06 10:32  

#15  You realize, of course, that as the Post Office dies, those tons of 'junk mail' will simply migrate into the newspaper center folds keeping that evil empire alive for more years.

That's okay P2K, I don't buy them either. If the folks that buy newspapers want them that's cool.
Posted by: AlanC   2011-09-06 10:17  

#14  The unions and pensions, along with government rules have made it completely impossible for the USPS to stay afloat. It needs to have the rules completely tossed out and privatized fully.
But, since that won't happen expect a bail out and expect to see a repeat of this story in 2012.
Posted by: DarthVader   2011-09-06 09:30  

#13  You realize, of course, that as the Post Office dies, those tons of 'junk mail' will simply migrate into the newspaper center folds keeping that evil empire alive for more years.
Posted by: Procopius2k   2011-09-06 09:26  

#12  I remember that there was a short UPS stike sometime in the late 1970's. Everyone (including me) had to then ship their packages at the Post Office. One of the gentlemen ahead of me in line mentioned the strike to the postal worker behind the counter and she responded "I'll bet you're glad that the Post Office is here". He responded "Lady, without the Post Office, there'd be no UPS".

I think everyone in line was clapping.
Posted by: Mullah Richard   2011-09-06 08:53  

#11  Steve, you're right for my house.

A normal day is 3 - 5 catalogs, a credit card application and something for my father in law from the IRS even though he's been dead for 3 years.

All I get is an occasional prospectus or statement from my broker (more bad news).
Posted by: AlanC   2011-09-06 08:32  

#10  Conduct the following experiment in your home: every day for the next two weeks, count the items of mail delivered each day, and separate into one of three groups:

a) junk mail
b) bills
c) everything else

I'll just bet that 75% or more of what you receive falls into category (a).

Without the junk mail the USPS would already be dead.
Posted by: Steve White   2011-09-06 07:54  

#9  All they need to do is require e-mail to be delivered through the Post Office. With a stamp. By hand. I wish I was joking, but it will probably be proposed.
Posted by: Glenmore   2011-09-06 07:53  

#8  Kevin Costner was unavailable for comment
Posted by: Spong Ebbusoth3666   2011-09-06 07:37  

#7  Have they considered going on strike? That kind of thing goes over so well, nowadays.

You mean grandma isn't going to get her Social Security check? Oh, the humanity of it all.

[Back in the 80s and 90s, the trope was 'in the name of the children', though you hear some of it still echo today. The early 21st Century trope is 'for grandma's Social Security check'.]
Posted by: Procopius2k   2011-09-06 07:19  

#6  Norwegian digital mail service was introduced:

http://www.hellmail.co.uk/postalnews/templates/postal_industry_news.asp?articleid=2701&zoneid=3

Chronic morale problems for US Postal Service for some time now. This after several quotas imposed to make things fair. I guess now everyone suffers.

Digital mail is the future.


Posted by: Dale   2011-09-06 07:07  

#5  Fast forward 20 years and replace USPS with ObamaCare
Posted by: Bright Pebbles   2011-09-06 04:42  

#4  I, fear that with gteh advent of email and electronic-only magazines USPS is going to go the way of the dodo. What could sabve them is that with the advent of Amazon and similar e-shops there is an increased need for parcel delivery. Unfortunately surviving in this market requires delivering stellar service. The little I know about USPS is that its service is far from stellar.
Posted by: JFM   2011-09-06 02:32  

#3  I meant incentive.
Posted by: newc   2011-09-06 02:25  

#2  Better yet, I see a fed-ex truck every day. Brown and fed-ex. Maybe the postal "service" needs to re-think it's position in the economy.

Begging for money is a short term solution. It makes you look weak.False economies with overpaid workers will never work.

It is obvious someone never got the memo.

Sell the USPS to save it. Bailouts kind of suck. Federal options may be maintained by inspection, but there is no worse work than government - which has no intensivene to work.

Besides, in REAL business, we use FED-EX or DHS anyway.

Posted by: newc   2011-09-06 02:24  

#1  Oldsmobiles are gone as well, but we're all still happily motoring around. That fellow in the brown truck comes down my street every day delivering something or other to the neighbors. He can toss my mail out on Friday's!
Posted by: Besoeker   2011-09-06 00:29  

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