Is the United States Postal Service going to survive?

[rhett o rick]

Last edited Wed Jan 29, 2014, 11:49 PM - Edit history (1)

We know that the Repukes sought to kill the USPS with their 2005 law requiring the USPS to pre-fund their employees health insurance for the next 75 f'n years. And they have to do it within 10 years at about $5.5 billion dollars a year. I think that started in 2006 and should be paid up by 2016. My question is, does it look like they will make it? If not, then what?

Edit: On further review wiki says: "The PAEA stipulates that the USPS is to make payments of $5.4 - $5.8 billion into the Postal Service Retiree Health Benefits Fund, each year, from 2007 to 2016 in order to prefund 50 years of estimated costs."

[elleng]

1. Yes they will make it,

because they're already well in the black in spite of the crap that's been laid on them, BUT we DO have to raise our voices in support of them whenever we can.

[wercal]

52. Getting 'in the black' didn't come without a cost

The sorting center in my city was closed, so mail now takes an extra day. And, the massive post office building downtown is about to be sold off - the post office will look to rent a space. In one of the small towns near me, the post office hours are now just one hour a day.

I think they will continue to do well shipping packages...I think their bulk rate junk mail profits will go down, since internet junk mail is free...and first class mail will continue to go down, as more people pay bills electronically (and more adults forget how to even address an envelope).

They will survive - but many rural post offices will be closed, office hours will continue to be reduced, and I bet pickup/delivery will drop to 4 days a week.

BTW - I'm not sure when or why the existence of the USPS became a partisan issue. But is remains tightly wound into the fabric of our government/private sector/lobby culture. Case in point - care to hazard a guess who builds the bodies for their trucks, and their sorting machines....

...Northrup Grumman.

[ananda]

2. I hope not.

That would be a disaster.

[Herman D]

3. Technology hasn't been kind to the USPS

First the FAX machine, then email and followed by eCommerce and eContracts.
Then toss in some UPS and FedEx and whew!

[B Calm]

4. all that and they are still profitable. .

[rhett o rick]

12. Agree. “In fiscal year 2013, the USPS turned a $660 million profit delivering the mail.”

Source: http://www.politicususa.com/2013/12/26/ups-fedex-ruin-christmas-prove-republicans-wrong-killing-post-office.html

[joeglow3]

36. Profitable because they use the cash basis and not accrual regarding post-retirement costs

There is a reason the SEC requires the accrual method of accounting for all publicly traded companies. AND their is a reason the government refuses to use this method of accounting themselves.

[Nye Bevan]

5. That law (actually 2006, not 2005) had two Democratic cosponsors and passed by a voice vote.

https://www.govtrack.us/congress/bills/109/hr6407

So I'm not sure that the "repukes" bear all of the blame here.

[rhett o rick]

11. The Republicans controlled both houses of Congress. I havent found the vote break down yet.

Thanks for clarifying that it was 2006.

[Nye Bevan]

14. It was a voice vote so no breakdown (nt)

[rhett o rick]

19. Thanks. nm

[malokvale77]

6. It better...

I do all my bills and official correspondence VIA hard copy and USPS.

[Agnosticsherbet]

7. Not if Republicans have anything to do with it.

[mac56]

8. A good read, if I do say so myself.

http://namebrandketchup.com/2012/11/28/let-us-now-praise-the-united-states-postal-service/

[rhett o rick]

18. Yes a good read. But help me out. In that article it says that the USPS has to pre-fund

for 75 years while Wikipedia says 50 years. That's a lot of difference. Which is correct?

From Wikipedia: "The PAEA stipulates that the USPS is to make payments of $5.4 - $5.8 billion into the Postal Service Retiree Health Benefits Fund, each year, from 2007 to 2016 in order to prefund 50 years of estimated costs."

[democratisphere]

9. Sure.

And like everything else, the price will keep going up and up. USPS is still a great deal and probably always will be.

[global1]

10. Hats Off To All The Mail Carriers That Are Having To Endure All This Unusual Weather We're Having...

I live in the Chicago area and the USPS mail carriers here have had to deliver the mail is some of the nastiest weather. Polar vortex frigid temps and snow, ice and blowing and drifting. Given all this - they've continually come through for us.

And remember back during the Christmas holidays - they came through again where UPS and FexEx had their problems and couldn't get things out for Christmas. They actually used USPS to help them.

So all in all - I got to give a big round of applause and a equally big THANK YOU to all the people that work for USPS.

We as consumers of their services have to do everything possible to see that they survive.

Call you Congressmen and Senators.

[IL Lib]

13. +1

I was justing joking with the carrier yesterday saying there was going to be a heatwave today since it was going to be 22 degrees. In the Chicago area they brave both the cold and the heat.

[rhett o rick]

22. The UPS and FedEx give their tough deliveries to the USPS after taking their cut. nm

[Lost_Count]

15. Not in it's current form...

[rhett o rick]

16. Can you elaborate? nm

[Lost_Count]

17. I envision a leaner service...

... With a greater reliance on online services, closing of redundant offices and an overall trimming of fat with a rate increase to boot.

Maybe not.. But if they stay stagnant they have already lost.

[B Calm]

30. Do you like the fact that postal workers are in a union?

Just trying to understand where you are coming from and what side you are on.

[joeglow3]

37. What?

I support union workers (my father spent 30 years in the carpenters union), but fail to see how recognizing the evolution of a business means you don't support unions. If your question is "do I support a company/business/government entity having double the needed workers" then the answer is no. Do I support unions representing the requisite number of employees needed? Yes.

[B Calm]

38. I've never heard of a Union that does the hiring. .

Interesting

[joeglow3]

43. I have seen MANY union contracts that stipulate numbers of employees

Interesting

[B Calm]

44. Was the postal union contract that way?

[joeglow3]

45. The better question is "Do you want it that way?"

This issue is that someone gave their opinion on the evolution of the business and you response was to question if they supported the union. There was ZERO flow to the conversation. Thus, the issue is really around what your intentions were and how you made that leap.

[B Calm]

46. So the union contract was not the way you said it was.

Somehow I think you have some sort of agenda here!

[joeglow3]

48. How. I didn't drive the topic off on a tangent

I explained the flow of the conversation and how your jumped in to ask a completely unrelated question? I simply asked what you were getting at. You have yet to address or answer that. And you have the gall to accuse someone else of having an agenda. Laughable!

[B Calm]

49. Like I said, I am trying to figure out where you are coming from. So

I asked you a question and you replied. I know what you are doing and I'm certain other people share my view.

[joeglow3]

50. Go back and look at the thread

I am not the person you originally replied to. I responded to your post because it was so far out in left field. I read his comment and it make PERFECT sense. YOUR post was what made no sense. I merely pointed it out and you now feel you arrogantly get to make the claim you so badly wanted to pin on the original poster.

Sorry, but acknowledging that labor needs shift with changes in the business culture (technology, user demand, etc.) does NOT mean one opposes unions. Most people recognize that common sense position and your response shows you are hunting for an argument. Thus, the question is what drives the insatiable need of yours to seek so hard for people to label?

[demwing]

39. Fail. USPS is not stagnant

and the ONLY reason they have any hardships at all is do to this unreasonable retirement funding mandate, which will be settled in about two years.

Imagine the Post Office with an extra 5 Billion a year in cash flow. It's coming.

[Lost_Count]

40. Wee bit defensive there I see...

Any business that keeps doing the same thing will eventually fail or be made obsolete.

[demwing]

41. Yep, I'm defensive

We should all be defending the USPS from the lies and bullshit that claim it to be struggling under the weight of its own antiquated processes.

Why aren't you?

[LanternWaste]

56. I doubt that many businesses predicate their models on mere bumper sticker philosophies.

I doubt that many businesses predicate their models on grade-school bumper-sticker memes. Although I'm quite certain you can point to specific and individual practices that will be "made obsolete" from peer-reviewed analyses to better validate your vague premise...

[Lost_Count]

57. Somehow, I think the point can be made...

... on a random internet chat board without publishing a peer reviewed business plan.

[Kingofalldems]

59. Don't see how the poster was defensive at all.

BTW, you should inform yourself when you discuss an issue, because your statement is untrue re the USPS.

[NCTraveler]

42. Nothing about the USPS is stagnant.

"But if they stay stagnant they have already lost."

They are constantly offering better services at a great price. Often setting the industry standard. Your view of them as stagnant couldn't be further from reality. But republicans will keep making this argument because some people will buy into anything they read.

[rhett o rick]

60. Sounds like code for "privatization." nm

[Lost_Count]

61. Sounds like code for "overly sensitive"

What's so holy about the USPS that even talking about change is to bring on the tizzy brigade?

There's room for improvement in every organization in the world. Sorry if that makes you itchy...

[rhett o rick]

62. I am sorry if I misinterpreted your post.

"closing of redundant offices and an overall trimming of fat " There is no reason to believe that this hasnt already been happening. They are laying off personnel, consolidating routes, closing rural post offices, and cutting services. But having "redundant offices" or "fat" isnt what is killing them. They made a profit last year (in spite of the recession) but had to set aside $5.5 BILLION for future health benefits.

I think the USPS is a very important agency that needs to be saved from the predators.

[KentuckyWoman]

20. It's very difficult to do business with USPS

If one of their competitors decides to take on letter delivery the USPS will die. The mail carriers themselves are for the most part doing an amazing job. The rest of the behind the scenes folks who drive, fly and sort mail probably are too.

But customer service is gawd awful. Just getting a certified letter mailed or delivered is an ordeal. Getting "one rate" shipping supplies is an ordeal. I don't have time for that. Worth it to spend a little more and put those things n FedEx.

If USPS can make itself more customer friendly then it will survive. That's the key.

[rhett o rick]

21. I have experienced no such problems with the USPS. nm

[pothos]

23. getting one rate shipping supplies

if you're referring to flat rate boxes, you should know that you can order any amount of the dozens of sizes for free on the USPS website. delivery is free as well.

ups and fedex will never get into the letter delivery business. the infrastructure just isn't there for them, and people wouldn't use their service, which would probably be at least $5 to deliver a letter that costs less than 50 cents for the post office to do.

to point, both UPS and fedex farm out sorting and delivery for their lower cost, slower services to the USPS already. they farmed out regular package deliveries over the holidays to the USPS because their infrastructure for handling that much mail just isn't there.

[KentuckyWoman]

32. They won't deliver more than 100

Huge pain in trying to get 2000 catalogs out. Then we found out each and every one had to be hand carried to the branch and hand stamped in because the envelope weighed 14oz.

We ended up paying $1 more each and putting on FX ground. Paid for itself in saved labor cost and lost productivity.

[JCMach1]

24. me either

I use USPS to ship EBay items for my Antique business all the time... I have rarely had any issues.

[El_Johns]

47. Letter delivery isn't profitable & the for-profits won't touch it.

[factsarenotfair]

51. I've had extensive experience with the USPS and had VERY few problems of any sort.

There's an amazing assortment of free Priority Mail boxes, etc!
https://store.usps.com/store/browse/subcategory.jsp?categoryId=subcatMSS_PriorityMail&categoryNavIds=catGetMailingShippingSupplies%3AsubcatMSS_PriorityMail

[1000words]

25. I'm not optimistic

I can't imagine privatization will be anything but a debacle.

[El_Johns]

26. They're never going to kill it off completely, because it subsisizes the private carriers. Fact.

[rhett o rick]

27. I totally agree. That's a point that really hasnt been brought out. UPS and FedEx needs someone

(funded by tax payers) to deliver their packages to the hard to get to places.

[El_Johns]

28. That's not the only way either.

FedEx has flown Express Mail, Priority Mail and First Class Mail for the Postal Service since 2000. According to Alan Robinson, Executive Director of the Center for the Study of the Postal Market and the publisher of the Courier Express and Postal Observer, the income generated by this “represents around 60% of FedEx Express’s US domestic air freight revenue.”

Per Robinson, “Most of this revenue comes from flying mail and parcels during the day when FedEx airplanes would be otherwise parked.” Thus, if FedEx were to lose this contract, it “would reduce the utilization of its aircraft possibly putting pressure on FedEx’s margins on its other air freight and Express business.”

http://www.minyanville.com/business-news/editors-pick/articles/postal-service-usps-post-office-post/8/3/2012/id/42951


Contracting with the Post Office is Big Business. The Postal Service is spending almost $12 Billion a year on private contractors – even though the Postal Service is so financially strapped that they’re about to cut delivery service by one day a week. Does this make any sense at all?

There has been a lot of talk lately about “privatizing” the Postal Service. Based on the law firm’s report, it looks like the Post Office is being privatized, one little piece at a time. Just another example of government creating something of value, only to hand over the profits to someone else. Just one more example of our government being used to further someone else’s private interests.

Frederick Smith is CEO of FedEx. According to SEC filings, he owns about 15 million shares of the company. Last year, FedEx paid out a total of 55 cents per share in dividends. Do the math… and it looks like Mr. Smith received about $8.5 million in dividends (not counting dividends to his family holding company, his wife, or his retirement fund).

Do the math… and if 3-4% of FedEx business (and profits) are attributable to the Postal Service… that would mean Postal Service contracts account for more than a quarter-million dollars’ worth of Mr. Smith’s 2012 dividend income.

http://nhlabornews.com/2013/02/why-on-earth-is-the-usps-paying-fedex-stockholders-millions-in-dividends/

[rhett o rick]

34. Who is directing the USPS to do so much outsourcing? nm

[rhett o rick]

35. Some sources say that they 2006 law forces the USPS to pre-fund their employees' Health

Benefits for the next 75 years while Wiki says, "The PAEA stipulates that the USPS is to make payments of $5.4 - $5.8 billion into the Postal Service Retiree Health Benefits Fund, each year, from 2007 to 2016 in order to prefund 50 years of estimated costs." Do you know why the discrepancy?

[elleng]

29. Taking action against 'outsourcing' to Staples:

http://www.democraticunderground.com/10024413008

[madville]

31. It was a bipartisan bill

Before final passage of HR 6407 in 2006 the House voted on their original version that had 104 Democratic cosponsors and 51 Republicans. The original vote in the House was 410-20 for the bill.

In the Senate it had 16 Democratic cosponsors and 10 Republican and passed easily.

Both parties were equally responsible for this debacle.

[rhett o rick]

33. Thank you for that data. nm

[Swede Atlanta]

53. Yes they will survive.......

I believe the fact that the Article I, Section 8 of the U.S. Constitution specifically grants unto Congress the power to establish Post Offices, helps in retaining the Postal Service. Granted it does not say Congress MUST establish Post Offices (and by corollary a service that would use the "post office&quot but it is good evidence the assumption of the Founding Fathers was there would be some sort of federal postal service.

What Congress has done to attempt to destroy the Postal Service by requiring decades early pre-funding of pension benefits is unconscionable. I understand the interest in ensuring the viability of pension programs because we know that when private companies go through bankruptcy they have been eliminating their pension programs and the federal, taxpayer-funded, PBGC picks up the tab. But I question this is the reason for this requirement that is quite mind-boggling (50 to 75 years in advance? What business does that?). I believe it was an attempt to destroy the postal service in favor of privatization or at a minimum of breaking the postal union.

There does seem to be a trend in Europe, Japan and elsewhere to either de-regulate delivery services or move toward privatization.

That is what I would expect to see here. Congress starves the Postal Service which is, without the pre-funding mandate, very profitable to the point of shedding post offices in rural areas, consolidating elsewhere and putting pressure on the mail carriers union. Basically they strip it down to bare bones until it is nearly dead.

Then they will announce plans to privatize the service and guess what, part of that plan will be to eliminate the pre-funding requirement because they are eliminating pensions altogether. They will then sell off this very profitable business to their venture capital buddies and pocket the proceeds.

I do not trust Congress when it comes to the Postal Service. And what is up with new delivery "options" for both Fedex and UPS where the "last mile" delivery is by the USPS. If FE and Big Brown are so wonderful why do they need the postal service to make the actual delivery?

[rhett o rick]

54. I think there is another reason that Congress wanted the post office to pay ahead

over $50 billion into their employees benefits account. Like the SS trust fund, this money is available for raiding.

[flamingdem]

55. The Post Office is being run by a partisan who won't admit he's a Republican

So I've heard.

[fadedrose]

63. Likes to privatize stuff?

[fadedrose]

58. My suggestion (already sent to WH)

Is to restore the US Savings Bond Program, use the forms leftover in Treasury, give them to the Post Office to hand out, sell a bond, send check/money to Treasury and let the bonds BE MAILED AS DONE ORIGINALLY.

No rules on age, gender, race, marital status, citizenship, employment - You just have to have at least $25 to buy one.

It woud be great to keep the miserable banks hands off these bonds because they don't have their heart in it, wanting to sell their own money-making schemes and CD.

Requested that they get Yellen, Postmaster General, ST Lew, and some people not afraid of hurting banks - like Warren, to take it to the Senate.

Yellen is stopping the feds from giving Wall Street any more "stimulous" because they are stimulated enough. The money saved could go to the Post Office, who in turn will send it to Treasury, people will be happy, recipents like grandkids will be happy, and it will not interfer with My RA which is mainly for people under retirement age...

The Post Office could get to be a real important place....