Email Stomping Out Snail Mail as U.S. Postal Service Teeters on Bankruptcy

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Eagle70ss

 

Labor represents 80 percent of USPS expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors.

Decades of promises to Unions including no-layoff clauses are pushing their costs sky high.  USPS has lost its ability to adjust to a reducing market for physical mail. The Postal Worker's Union has been unwilling to give up those "cadillac" perks.

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btdog

Boy you're not kidding.  I read an article about 2 months ago that said the union just signed a 3 year contract that guaranteed 10 pay increases - 3 merit increases and 7 cost of living adjustments (COLAs). Over the next THREE years!

 

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copterguy

This doesnt seem to be a problem with UPS,FEDEX, etc.... oh that's right, they are not run by the Government.....privatize it or let it sink.  Socialists please pull it out and take note.

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jaawn

Uh... the USPS is an independent agency and hasn't received tax-payer money since 1980.  So shut up about your "socialism" whining.

I think the other commenters are correct, the issue is that the union is being completely unreasonable.  They are taking full advantage of how the U.S. Mail is still depended on for stuff and a strike would be really, really bad for the whole country.

I am really annoyed to hear that this union is potentially putting the USPS out of business.  It is ridiculous.  There HAS to be lay-offs.  It sucks, but it has to happen.  If you are "selling" 20% less of your product from one year to the next, paying the SAME number of workers MORE money is not going to work...it just won't.

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Brad Nimbus

Good, I never got my $20 from my grandma. You bastards!

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US_Ranger

On the news yesterday they were talking about this and how the union contracts do not allow layoffs in any large amount. Instead of being allowed to restructure, like any business would do that is facing bankruptcy, they have to follow the rules set in place by the union. 

In other words, don't lay anyone off and instead get another stimulus check from taxpayers that pay everyone's salary. What a great concept for a business. Why is there incentive to change anything if there is no penalty for failure and no reason to restructure? 

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TerribleToaster

 

Despite being a official government agency, they aren't guaranteed public funding as they are suppose to be self supporting. If they can't get over this and the government doesn't subsidize then USPS will be broken up and mail will become a open market. This would solve the problems here, but it will raise prices for delivery drastically. You might be paying $12 to send that postcard to Grandma.

 

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Zoandar

I know one way they could reduce delivery costs. Allow rural delivery residents to opt out of 'junk mail'. But they refuse when you ask them. Why? They say they are being paid to deliver the junk mail. So.....raise the postal rates on junk mail. No more 'bulk rates' and such for all that crap we don't want anyway. Make each piece of junk mail cost the same as a first class letter. That would have to help.

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jaawn

this is a GREAT idea.  Credit card ads, things addressed to "current resident", and the like should ALL see a major postage rate increase.  That should generate a TON of income for them.

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someone87

The USPS should be a self sustaining entety in the US government, if they can't survive on their own, without taking tax-payer money to stay in business, they should close up shop, or make whatever cuts nessessary to make ends meet.

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compro01

Tell Congress that.  USPS can't take a piss without their approval.

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jaawn

they can't make the cuts necessary due to the postal workers union, as others have said.  That leaves government money as the only option to keep the mail going.

So they HAVE to.  The economy would take a huge hit if the mail just stopped.  A TON of time and money would have to be spent on businesses changing everything to email only or sending mail with UPS/FEDEX/DHL.

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nsvander

Why do they have to deliver every day?  I mean seriously, I think that I get one or two days with actuall mail, all the other days are just junk mail, fliers, and inserts.  I wonder how much they could save if they stopped delivering on Saturday, or went to every other day mail delivery for the private sector (excluding businesses).

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super_duper

I only use snail mail for those pesky "mail-in-rebates"!

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DJSPIN80

Not to sound cold, but USPS has had time to watch technology shift and grow.  Instead of innovating, they decided to stagnate and allow rising operating costs to eat into their revenue.  UPS, DHL, FedEx...all these guys are innovating, finding ways to make logistics smarter and simple for the mere mortal.  USPS?  Not really.  If they go bankrupt, it sucks for the people who work there, but it's the consequence of not managing your resources well.

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sammy_sam

 

Innovating & ironic that Fed-ex (smartpost) and UPS (mail innovations) have moved a portion of their small package business to USPS.

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TerribleToaster

 

 

You seem to be mixing express mail up with regular mail. They are very different things, and while USPS does deal in express mail, regular mail is what is killing them; mostly because USPS is a legal monopoly and the only other people (besides the homeowner) that is allowed to access a mailbox.

What really is hurting USPS is that when I go buy a stamp, it costs me the same amount to send a letter to Alaska as it does to send it across the street. Delivery costs are extremely different, but USPS is required by law to charge you the same price regardless of the distance. This use to be non issue because of economies of scale. USPS handled so many mail deliveries that the marginal cost for each piece of mail moved, regardless of the distance traveled, was negligible. But now, this is no longer the case, there simply isn't enough mail going out. To try and counter it they are scaling back in the hopes of bringing long run costs down (which is probably the best solution). But the situation is pretty dire, there is no guarantee that this will stop them from hemorrhaging money.

 

 

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Blaze589

Actually CNN covered this story a while ago. That doesn't seem to be the problem as you've stated. The problem is the USPS' works heath benefits law as of 2006.

http://news.blogs.cnn.com/2011/08/18/is-benefits-law-dragging-down-the-postal-service/?

In the future USPS plans to only send mail 3 times a week to cut costs.

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TerribleToaster

 

I always considered paying the workers (and by extension their benefits) as a short run cost since your work force can fluctuate drastically in a small amount of time hence part of the marginal cost of delivery.

But regardless, what I was trying to point out is that the revenue from non-urgent mail can't increase as they can't change their pricing per the USPS's USO. They just can't increase the revenue because they can't increase price like a company normally would in such a situation. So when the amount of mail declines, their revenue decreases as well, meanwhile their costs (both in the short and long run) are on the rise. That's why their only option is cutbacks.

 

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TerribleToaster

I use snail mail alot. But only as a way to back up emails and faxes I have already sent.

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Brad Chacos

Just about the only thing I use snail-mail for is mailing out the rent check.

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ABouman

I do, in fact, use it to send letters to my grandmother. (and for Netflix).

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Mr Maximum Tech

I didn't think anyone used Netflix anymore...

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