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Dead Letter Office: USPS Cuts Services. Nobody Cares.

Written by Gary North on February 7, 2013

When a profit-seeking firm sees that no one wants its services, it finds ways to lower prices and improve services.

The United States Postal Service does what government agencies do: it raises prices and cuts services.

In its press release announcing the cessation of Saturday delivery of mail in August, we learn the following.

WASHINGTON — The United States Postal Service announced plans today to transition to a new delivery schedule during the week of Aug. 5, 2013 that includes package delivery Monday through Saturday, and mail delivery Monday through Friday. The Postal Service expects to generate cost savings of approximately $2 billion annually, once the plan is fully implemented.

Let’s analyze this. It will save $2 billion a year. What is its budget? The press release has this is at the end. “With 32,000 retail locations and the most frequently visited website in the federal government, usps.com®, the Postal Service has annual revenue of approximately $65 billion and delivers nearly 40 percent of the world’s mail.” So, the $2 billion in savings is 3% of its budget. So, to save 3%, it reduces its delivery of mail by 16.6%.

Why didn’t it just fire 3% of its work force? Or 5%? Because its work force is unionized. So, it stiffed the participants with no clout: the public, who cannot strike. Instead of firing anyone, we learn the following: “The operational plan for the new delivery schedule anticipates a combination of employee reassignment and attrition and is expected to achieve cost savings of approximately $2 billion annually when fully implemented.” Attrition? That means “quits, retires, or dies.” That means “leaving a tenured job that pays above-market wages.” That means later. Much later.

You know a government agency is in big trouble whenever it uses the word “challenge.” It is dead in the water if it uses “challenges.” In government circles, the word means “politically unsolvable; therefore, kick the can.” We read:

Given the ongoing financial challenges, the Postal Service Board of Governors last month directed postal management to accelerate the restructuring of Postal Service operations in order to strengthen Postal Service finances.

So, its problems are “outside the Postal Service’s control.” These problems are not mentioned: email, social media, Skype, and similar free services. You know: the free market. In the good old days, the Post Office had a government-mandated monopoly. It could keep out competitors, and it did. But now all this has changed. A gigantic government bureaucracy lost its political mojo after 300 years. Congress revoked the monopoly. The Internet took over.

Then what is the solution? A government bailout, of course.

While the change in the delivery schedule announced today is one of the actions needed to restore the financial health of the Postal Service, legislative change is urgently needed to address matters outside the Postal Service’s control. The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue and encourages the 113th Congress to make postal reform legislation an urgent priority.

We are assured: “The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.” Then what has Congress got to do with it? Why is “legislative change” necessary? Because the USPS is still a government enterprise. in the words of the press release, it is “A self-supporting government enterprise.” Enterprise? What enterprise? There is no enterprise at the USPS. There are only price hikes and service reductions.

This is government at its best. This is as good as it gets. The Post Office used to get the federal government to fine competitors and put them out of business. Now it can only cut Saturday services.

One reform will work: sever all of its connections with the government.  Turn it into a purely free market enterprise. See what happens. I know what would happen. No Friday deliveries. Then no Thursday deliveries. Then no mail deliveries at all.

No one would notice.

The USPS wants a bailout. It wants permanent bailouts. Let’s hope Congress says no. Return to sender.

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22 thoughts on “Dead Letter Office: USPS Cuts Services. Nobody Cares.

  1. It took me more than a month to convince my current post office to deliver packages to my apartment. UPS, FEDEX, DHL, and Lasership all deliver packages to my apartment without me having to fight. That's USPS service.

  2. Roy Stallard says:

    I am insanely jealous of your remarkable ability to see, think and write! A few months ago you asked why I had subscribed to your service and then terminated without asking any questions. I just wanted to pay you a little something for value received. Thank you.

  3. First of all, you need to explain that the USPS union cannot strike. That doesn't prevent them from 'sick outs' or something like that, but they don't have the authority to actually strike, unless the law has been changed. Those of us who have a computer, or computers, and internet capacity, and/or sufficient income to afford FedEx, UPS, or such, have no appreciation of the postal system for obvious reasons. Not so many decades ago, the postal service allowed private sector firms to take the most profitable portion of it's business and leave it with the remainder. I was in the position to hear about all this at the time and wondered why USPS didn't revamp itself instead, but they made this dumb decision and have paid the consequences for it ever since. But, for the cost of a first class stamp you can send a letter to Aunt Sally out on the farm in Kansas on a rural route that delivers mail out in the countryside where houses are spaced one per mile without there being a penalty for this communication. Why don't we just dissolve the postal service and see what happens? A revival of the pony express? Doubtful. All this not to say there's not a problem, but remember, some services of government will never have a return on investment, not as long as all the people are being served. That's the problem with 'running government like a business' when anticipating growth and being prepared for it takes money.

  4. Castle Mentality says:

    The proposed solutions will not work because the moral and ethical foundations have been destroyed. Where will the political or moral force come from when there is simply no more moral force in place? It will simply not happen. The real solutions that might actually fix the problem are politically impossible to sell because of the moral decay. It is the Roman empire all over again. We can basically expect to see a new Middle Ages with new Guilds and islands of prosperity and wealth in the vast desert of poverty and misery. History will undoubtably repeat itself. If possible, build your own personal circle of trust and construct a foundation that will stand the forces of change. Can it be done without bringing down the wrath of government on your own head? THAT is the question I am trying to get answered.

  5. Denise Leopard says:

    I hear alot of folks raving about how great Fedex and the others are. Most people don't know that a large percentage of those
    packages are delivered to USPS and delivered by us.

  6. Yes, this is a moral issue.
    I saw a spokeswoman for the post office on Fox TV yesterday. She stated that new hires in the post office have been cut, benefits, etc. Great!! The problem throughout the country at all levels of government is not paying new hires less (I don't know how much less) but the current workers who have ridiculous wages, benefits, pensions and already retired workers benefits and pensions.
    Private companies over the last 6/7 years have been terminating middle wage workers making 50,60,70 80 thousand a year. These same people who lost their jobs and lucky enough to find new ones make 20,30,40,50 % less than their previous job.
    These selfish unions and zombie government workers NEVER EVER SHOULD take a paycut. They think we the taxpayer are going to foot the bill for this STOLEN money and benefits for govt. workers. These selfish people don't care about the deficit and don't care if they bankrupt the city/state/country. They think it's normal to make 1 million dollars through one's working career and get paid 2 million dollars in retirement – all funded by the taxpayer.
    What this means is that it is going to take 60 years until all these workers have retired and gone to their grave until costs will come on.
    Government workers = prosperity……… 50% of all other workers misery and living paycheck to paycheck.

  7. The USPS is operating in the red. It was doing well as the only self supporting "quasi" govenment organization (no tax funding, stamps, products and services only.) until the communist in Washington desided they wanted to raid it's funds (just like they did with SSAN and medicade). So Washington mandated prepayment of USPS employees retirement 75 years in advance. That is to say current employees are currently prepaying the retirement for future employees who have not yet been born.

  8. Good start…. now cut salaries, benefits, and overtime. Close offices that are not busy full time (you can start with my small town)… and cut the work force by at least half. Keep the ones that will work and that have no attitude. FedEX, DHL, and UPS can handle the load. Goodbye…
    This will also eliminate the tons of trash mail received every year… also, do not sent blue-state catalogs to any red-state… we aren't interested anyway.
    Keep stepping on their air hose until they are gone…

  9. Admiral America says:

    Their monopoly on letter delivery should end. Any private service like UPS, or Fedex should be able to deliver letters.

  10. You mean terminating middle aged workers is okay with you? You mean NAFTA, ad nauseum that have sent countless jobs overseas is okay with you? You mean the U.S. having THEE highest corporate tax rate forcing companies to relocate overseas is okay with you? You mean being taxed to death is okay with you?

    While I can and do agree with your viewpoint about gov't workers you surely raised a lot of questions and left them unanswered.

  11. And what about the packages USPS has contract with UPS to deliver 🙂

  12. "That is to say current employees are currently prepaying the retirement for future employees who have not yet been born." has exactly to what to do with OPERATIONAL funds in doing the job? Employees paying for employees is connect exactly how to daily operational costs to run the service?

  13. Agree to a point but you know or should now there are in fact places (small towns, homes out of the way, etc) that they will not deliver to. Been there, done that, dealt with that. They are good but do not service ALL homes.

  14. When any entity cuts services, fewer people will patronize because less needs are filled…it's a downward spiral that can only end in the business closing, or another buyer comes in and gets back to business. The USPS ? With all that heavy union weight, only time will tell…I'll bet FedEx and UPS just may be your next letter carrier.

  15. I can remember when 1ST class mail was 3cents. Yes that is usually written as, $.03. The service then was no different than it is today. By inflation that is well over an increast of 1,500%. And no service stability. Last month I mailed a letter to a customer as it had been done for the last three years – Suddenly the service hit a knot. The letter was returned – Insufficient addressing. When it was brought to the local post office I was told we don't go to that town. After my explaining it at least 4 times to this learnerd person of the local post ofc. she said; "Oh yes, I see its the area we may not travel to."

  16. This is after three full years of my mailing this person.
    Why cannot the usps just lay off a few hundred people to make ends meet. The idea of a bail-out is totally rediculous. Why is it the other delivery businesses do not have these little problems. We don't hear it from UPS, or Fed-X, or DHL. I know for a fact that UPS is union. I'm not sure of the others. The United States Post Office stopped in 1978 and became the United States Postal Service – Independent of the government. Meaning no longer would they be paid by our federal taxes. As to where all that money had gone – you can only guess that it ain't in out pockets.

  17. Put the "For Sale" sign out and let's see who wants to take it over. If it wasn't a gummint monopoly, it would have gone out of business years ago. The real reason they went to the private business model was so the post office gummint employees could unionize, which other feral gummint employees can't.

  18. You can expect postage to triple if UPS or Fedex starts delivering letters, and if they have to go to rural areas the delivery fees will be even higher. The UPS charges extra now for rural delivery. The USPS had email before there was email. It was called E-Comm. It worked via satellite where a letter was scanned and uploaded to the bird and beamed down to the destination PO where it was printed out and delivered to houses that had no computers, which at that time was most addresses. This was in 1982, but private companies lobbied congress and it was killed. The PO operates under rules that the government dictates. The reason it is in trouble now is because of stalling and lobbying by UPS and FedEx who what to kill it off completely so they can have free rein and charge whatever they like. You can say what you like about monopolies, but if UPS and Fedex get their way you will see a very higher priced monopoly. As it stands now if the PO goes under you can kiss your magazine subscriptions goodbye as these items are 2nd class and get first class handling. These will go away under privatization. Rural areas do not have broadband generally, so downloading magazines etc is not really practical. I think the public will be very sorry if the PO goes under as it only needs some modifications to make it viable again..

  19. ahh…. the constitution?

  20. The constitution mandates postal service, and it would take an act of congress to change that. Never going to happen.

  21. I once mailed a first class letter, zip plus four, from Oklahoma City to Chicago, and it took fourteen (14) days to get there!!! My brother-in-law who is a USPS supervisor in San Antonio, once gave me a tour of the main post office. I saw mail lying on the floor where it had fallen off the belt. I offer to put it back on the belt, but was told that I could not do that, nor could he do that, as the postal inspectors were watching from overhead! So the mail on the floor stayed there, being walked on by personnel walking past! Postal employees are among the most abused federal employees. The USPS is top heavy with unnecessary useless management types, and the USPS is rapidly putting themselves out of business!!!…

  22. They can't think of any other way to save money? How about not letting folks retire until their mid-60s (like the rest of us, non-government workers)? How about putting their pay and benefits in line with the majority of workers who are paying for the service? How about cutting some post office locations? My small town (pop. about 8,000) has THREE post offices, all within approx. 2 to 3 miles of each other.. They all have Postmasters and a couple of employees. No one at the USPS can figure out that we have an opportunity here for savings?

    (and for what we're paying … at LEAST once a week, I get someone else's mail — not the same person's mail, and not everything, but just assorted pieces belonging to people in the general neighborhood. Makes me wonder who's getting my mail — with account numbers, etc, maybe medical information …..)