Posted on 02/09/2013 1:09:57 PM PST by SeekAndFind
It's Saturday, and I went out on the front porch this morning after shoveling out from Nemo and got the mail as usual. There was an advertisement trying to get me to switch homeowner's insurance and a coupon flyer for the local grocery store. That sort of surprise waiting in the mailbox doesn't exactly get me all up in arms over the Post Office's idea to cancel Saturday mail delivery. Up until now, I’ve been assuming that the Post Office is simply an unprofitable enterprise and they may have to put trucks out on the road less often to reduce costs. I suppose I’ve been mostly in line with Jon Stewart’s rather cynical take on the subject.
I can’t believe the business model of transporting letters with vehicles across the country for forty cents a pop is failing. Sorry… where ya want me to take that? Hawaii? Yeah, no trouble. I’ll put it on a plane, get it there in two days. Uh… ya got a quarter?
But perhaps there’s more to the story than that. Doug Mataconis links to Matthew Yglesias who seems to feel that government subsidy of more expensive deliveries to rural areas is part of the rot at the heart of this business model. What was once a lucrative monopoly, according to this line of thinking, has been squeezed out of the profit margins.
But the monopoly has become less lucrative and that’s not going to change in the future. That’s squeezed the budget, squeezed postal workers’ compensation packages, and is now squeezing the quality of nationwide mail service. As a country, we need to ask ourselves whether providing subsidized mail delivery to low-density areas is really a key national priority. Without the monopoly/universal service obligation, it’s not as if rural dwellers wouldn’t be able to get mail, it’s just that they might need to pay more in recognition of the fact that it’s inconvenient to provide delivery services to low-density areas. Nostalgia-drenched Paul Harvey Super Bowl ads aside, it’s not the case that rural Americans are unusually hard-pressed economically or are disproportionate contributors to the economy. They are, rather, the beneficiaries of numerous explicit and implicit subsidies, of which the Postal Service’s universal service obligation is one.
Doug seems to agree:
Most of the complaints one hears about privatizing first class mail and ending the USPS monopoly on its delivery center around the issue of what is to be done about delivery to rural areas. The basic idea behind is that it shouldn’t cost rural customers, or those who want to correspond with them, more to send first-class mail than it does to send first-class mail from one major city or suburb to another. There’s no economic rationale for this kind of policy. Indeed, it exists nowhere else almost nowhere else in the delivery business right now. If you want to send a package via USPS, you are generally going to pay based on where you’re sending it to. UPS prices its delivery services in much the same manner. The only place you see “flat-rate” pricing is in things such as overnight mail, which is based on an entirely different kind of business model from regular package shipping and for which the customer is paying a premium for the convenience of next-day, or 2nd-day, delivery of something that would ordinarily take a few days longer.
I’m no package delivery expert here, but I’d always sort of assumed that the United States Post Office was pretty much designed with an untenable business model baked into the cake. It’s something which is mandated by the Constitution, thereby bringing the government into the mix, but it’s being expected to run at a profit while conforming to a business model which no sane, private business would ever consider. It costs more to drive a letter or package fifty miles out into the boonies than it does to simply get it to a commercial hub in a city or suburb with the bulk of the parcels. If you charge the same amount for all of the letters, somebody is getting more value for the same price point than everyone else, simple as that. I suppose you have to average all the deliveries together to come up with a flat price which keeps you in the black, but it’s got to be one hell of a lot more than fifty cents per letter.
With that in mind, it’s hard to see how eliminating Saturday delivery does much to address the real problem. You’re still running the same losing business model… you’re just losing money more slowly by doing it one less day per week. I’m still not entirely opposed to just having the Post Office jack up the rates far enough to make the service profitable. If it costs more to mail junk – particularly bulk advertising and such – people might think more carefully about what they are mailing, rather than flooding our boxes. Exceptions could be made for free or low cost postage for the mailing of payments to utilities or answering required government correspondence. But do you really think it’s reasonable to be able to send a letter from Virginia to Oregon in two days for four bits?
The easy answer is simply to limit mail delivery in remote areas only to once or twice a week.
That's an interesting point. We live in the suburbs and do a good bit of purchases from Amazon (out of convenience more than necessity). It would be interesting to see the full P&L for those rural post offices because it might be counterintuitive to many for the reason you stated.
You’re on it. In my office, Saturday is the second biggest, if not the biggest day of an average week. This week I did 10+ hours on Monday, and 9+ today. The rest of the week was lighter, but we just closed a “sortation” facility and sortating has been moved to another location, trucks ran differently etc. I can’t wait to add Saturday to Monday. We will have to leave stuff behind, so we can make it back before dispatch.
All that said, the USPS would GREATLY benefit from a business friendly Administration, and some economic growth. THAT is the real problem. With the USPS. Really, actually, for real, honest economic growth, would benefit everyone, and the USPS would be there working, and back to breaking even.
Cutting Saturday delivery is another hair-brained idea by someone way up in the food chain paid to come up with ideas. They propose to save $2 billion, but they also proposed to save a boatload of cash by putting in Flat Sequencing machinery to cut down the street time of letter carriers. How did that work out? Eh, they didn’t save enough to cover their costs. It’s losing money.
“or it will simply stack up on the P.O.”
That is an excellent point.
Speaking strictly from a business point of view...a Monday holiday delays mail for days. Three days of built up mail will be a nightmare and very disruptive to a business.
Before all of the tech savvy jump on me...a lot of business is still conducted in a traditional manner. Not every small or medium sized company can operate soley on the internet. A lot depends on what service is being delivered. That is not completely a bad thing. If the internet goes down, companies that are totally dependent are s.o.l.
I can personally get by with less delivery service from the USPS...my business not so much. As hard as this may be to believe...lots of folks don’t have computers for communication!
When the USPS declared the end of Saturday mail, they thought the People will rise up in indignation.
They didn’t.
Now the Union has to scream bloody murder to save their phony baloney jobs. Big screw-up by the USPS politicians.
Yeah. What you said. Unions need to be reined in in terms of power to cripple the economy. They are hand in glove involved in much of the inflation in our economy, in particular the public sector unions. sd
Crazy, isn't it?
I've read no economic justifications [with volumes of mail and requisite delivery times], just the pronouncement from the PMG that it'll save $2 billion. I have to assume some skullduggery here.
Same here but 2 carriers cover over 135 miles of route , out of this one country office.
I was at a friend’s house in town one day when a mail jeep pulled up across the street from us and my friend told me to watch.
One guy got out and walked around the block while the other sat in the jeep with his foot hanging out the window. When the first guy got back they pulled the jeep around the corner and stopped 50 yards away so the other guy could walk around the block.
When the second guy got back they pulled up another 50 yards and into a small park where they had lunch and smoked a joint for the next 45 minutes.
That crap doesn’t happen in my tiny town. Our postmaster does her job and does it well and the rural driver has to hustle to cover two routes.
I guess you like your subsidies.
The trouble is called JUNK MAIL , raise it to first class postage and watch the profits go up. How many pounds of paper thrown away each year ,that is never read ?
Yes, that would work
But the Business Socialists would squeal like frightened schoolgirls if you made them pay the same rate for junk mail as the regular folks pay for 1st class.
Business Socialists get all LiberalTarian when it is less government for thee....but get all statist when it means less government for me. Guarantee that is what will happen if junk mail was raised
You nailed it. Bloated pension funds and unions will ruin any business in the end.
I delivered the mail for seven years in college and medical school, which helped pay the bills and taught me a lot about work, good and bad.
Yes, the USPS is a mess. But, delivering the mail IS one of the few actual Constitutional responsibilities of USG, and delivering it the last mile to a cabin in the mountains will never be profitable.
Fold the USPS, restore the POD, and put the Postmaster General back in the cabinet.
It’s the conservative thing to do.
That's just "pie in the sky". Every time I send something "next day air" it takes from two to three days before it arrives at its destination. For "2nd-day delivery" its even worse. Truth is all mail going out of town goes by air, which does not guarantee any decrease in delivery time as it has to be sorted again upon arrival.
Regards,
GtG
If your insurance plan demands that you buy 90 days worth of prescription drugs through a mail order pharmacy you are going need a "just in case" supply on hand for those times when the mail truck doesn't make it through the drifts. Good luck...
Regards,
GtG
But the Business Socialists would squeal like frightened schoolgirls if you made them pay the same rate for junk mail as the regular folks pay for 1st class.
They've got us surrounded.
I only get a small handful of bills every month but 2 5-gallon bucket fulls of junk mail. Guess I could start marking all the junk with return to sender.
Those companies do not deliver to obscure rural areas but the post office does. It does not have to be a profit proposition when serving the public. There is reason for taxes. Nobody but nobody should be denied services. That’s what I am getting at. I worked for an outfit. They do not go every where. That I do know. That.’s the only reason with affordability for the common man. I am no commie either. Sorry about your word problem. I have family in rural area. The only person they ever see sometimes is the mailman. So I firmly believe in the concept of the post office. It’s not all dollars and cents.
Great idea - No different than having one central postal pickup and drop off area at apartments.
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