Skip to comments.U.S. Post (Office) has $2.2 billion loss, warns of Sept insolvency
Posted on 05/10/2011 3:36:03 PM PDT by Beaten Valve
The U.S. Postal Service posted a $2.2 billion net loss in its second quarter and said it might be unable to pay its debts by September.
The agency, which has been battling falling mail volumes and competition from FedEx (FDX.N) and United Parcel Service (UPS.N), said it expects to hit its borrowing limit by the September 30 end of the fiscal year, and will have to default on payments to the federal government unless Congress intervenes.
"The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model," said Chief Executive Patrick Donahoe in a statement.
The Postal Service -- which posted a net loss of $8.5 billion at the end of fiscal 2010, its fourth straight year of losses -- has asked Congress for permission to cut Saturday mail delivery.
The agency lost a bid last summer to raise rates on first-class mail beyond the pace of inflation.
The mail carrier, which delivers about 40 percent of the world's mail and does not receive tax revenue, announced in March that it would eliminate 7,500 jobs and close 2,000 post offices in an attempt to cut costs
(Excerpt) Read more at reuters.com ...
A business model under which you don't have to recover costs?
Reminds me of the carrier we had for several years. Drove around just stuffing wads of mail in mailboxes as they liked. Didn’t matter if it was the right house or street. If confronted they refused to take it and deliver it properly and would drive off.
When my mailbox was full of mail that was not mine they left me a nice note saying come to the post office to get it. I did, told them why and that mail sat for over a month before it was finally removed by a temporary carrier. When the previous carrier returned, the same thing happened.
It may mean that the local post office is going to be in a rented office in a business park and the mail delivered via standard commercial vehicles, but it will get done as it always has.
Agree. The PO seems to be moving towards consolidating not only branches, but distribution centers as well. They will have fewer facilities and employees, yet will process the same volume of mail as they do currently.
I checked at our small local office. According the lady who is postmaster she sells enough stamps, box rentals, etc. to make a profit after all the costs are considered. The postal service should evaluate all offices on a profit basis and also de-layer management by eliminating half the levels in the organization.
bwahahaha, all hail government run BS.... =.=
Oh yea, haven't sent something for 10 years. But I do get that junk stuff.
Be careful what you wish for. There are many parts of the world and country that UPS and FEDX either do not serve or serve at an enormous rate. An item that costs 25 cents ordered UPS to Alaska will cost $25 to get it. Once you do away with the USPO everyone’s rates will go up. the post office is keeping the competition rates lower. A lot of people will not be able to afford mail service if they go away. I suggest that the government PRIVATIZE it but keep it.
Form the article:
“Large central mail processing facilities are located between the various post offices they serve to distribute mail efficiently. These processing facilities have mail-sorting equipment that can handle standard letter-size mail. Individual post offices report the order of their mail delivery routes to these central processing facilities. The individual addresses are keyed into the sorting equipment computer in the order in which they are delivered. Then each day, letter-size mail is sent through the sorting equipment to place it into delivery order for individual mail carriers. The presorted mail (DPS) is placed in mail trays and delivered every morning along with parcels and unsorted mail pieces to every post office. This presorted mail can be taken by mail carriers directly to the street to be delivered. Individual carriers may place this mail into their sorting case along with larger pieces to avoid working from several trays while driving.”
It still looks like carriers get presorted mail and then have to add the unsorted bulk mail.
If you read it again, even the presorted gets sorted one more time.
It is only presorted by route/delivery driver. The driver actually sorts it again.
I should add, also note that it is only for letter size items.
You may request that you postman/person Leave all parcels/certifieds in your box, you will have to sign a waiver for them to do that. Ask about it. I use it, as I am not driving about 15 miles to the PO to pick us some certified or package.
Just make that remaining 20% 2PD-BB offices.
Love, Fred Drucker
If they lay off 10% (60,000 with a loaded cost of $100,000 each) the gap would be closed and they would be operating at a $4bil surplus.
And YES they can stop mail delivery on Saturdays.
No taxpayer monies. None.
In fact, there are entities that are "Natural Monopolies". It's one of the basics of Economics education.
The USPS is one of those.
That's not to say that they don't need to change with changing times.
As another poster stated...sending a letter cross-country for $.44 is a BARGAIN.
Yes, they should close on Saturdays. Yes, they need to lay off 10% of all employees. Yes, they need to move from defined benefit to defined contribution retirement.
Yes, they are not very friendly or efficient.
Still, $.44 for a letter is a bargain.
Not that anyone actually sends "letters" anymore.
Not as many as there used to be, although there are still some.
So, your internet service is free - your computer was free and your electricity is free?
“I won’t miss ‘em...”
A lot of people will. Not everyone is wealthy enough to drive 30-40 miles to a Fed-ex office everytime they need to mail a bill payment. And not everyone trusts paying their bills online and giving up private info online.
Sam here - I’d be cooked without the USPO. They are by far the best postal system in the world as far as delivery of items.
I have heard for ten years from any number of postal employees that the entire organization is far too top heavy with redundant management positions.
It is at the library. Paying bills online and sending emails are just two of the many wonderful advantages I get from 24/7 internet access. Counting the cost of the internet is like counting the wear and tear and gas that it costs me to buy stamps and mail letters. It's just silly.
“People want cheap reliable mail service, what they have is expensive, unreliable,....”
Yeah,,, paying .44 cents for delivery of a letter in a matter of days with a 99.999999999999999999999999999999999999999999999999999999999999 chance of getting to it`s destination is outrageous. sarc/
All true. But their business model is completely outdated. Most private citizens (and most businesses for that matter) would be completely fine with delivery a couple of days a week. With instant communication widely available, the Post Office's business model needs to change. Every year since the economy has gone south, we've been getting more and more evites, Christmas cards, and thank you notes via email. Even some wedding invitations.
Maybe the Post Office can't be profitable right now since most of its apparent value is to the rural population. As a constitutionally defined service of the government, I don't mind my taxes funding it, just so long as it's not to the tune of billions of dollars.
That is correct. All of the bulk rate stuff is delivered in bundles that have to be broken down and added to the presort at the delivering post office. So while the regular mail is presorted by delivery, the contractor in the rural areas will probably still recase it to add the bulk mailings and then put it back into the trays.
None of the vehicles have the space to do that going down the road without slowing the route delivery and ... pissing people off who expect their mail to be delivered at a certain time.
From Key West, Florida  to Kaktovik, Alaska  (which lacks any access roads), for 44 cents?
Actually, the main reason they can't be profitable is because Congress is bending them over the table on behalf of the postal workers union and their pension fund.
You trying to be the new Post Master General?
You trying to be the new Post Master General?
It's not required by the constitution. Congress has the power to create a post office and post roads, but there is no mandate that they exercise the power.
The point of the clause was to provide a constitutional sinkhole for tax revenue.
There is nothing in the constitution that prohibits a state or private interest from delivering messages and parcels.
How much will switching the workers to a defined contribution plan help? That's one change that clearly needs to happen.
Our company delivers to Japan and Europe..
If we shipped by FEDEX, it’s TRIPLE the USPS cost, and same goes with UPS. Heck, USPS delivered our parcel to one of our customers in Libya during the riots..intact. We couldn’t even believe it.
I wished Freepers wouldn’t make me defend the bloated USPS but here I am. Their international deliveries have saved us thousands. BUT their office clerks are one of the laziest people I have come across.
In January 2010, the Postal Service Office of Inspector General (Postal OIG) issued a report giving hope that the Services financial problems might be less severe than previously believed. The report asserted that the Office of Personnel Management (OPM) has forced the Service to pay an unfairly large share of the Civil Service Retirement System (CSRS) pension costs of postal workers who started their careers at the old Post Office Department.  According to the Postal OIG, the overpayment began in the 1970s and had reached a cumulative total of $75 billion through 2009. The Postal OIG claimed the overcharge benefited the U.S. Treasury and recommended that the Treasury credit $75 billion to the Postal Service. The OIG suggested using most of the money to fully fund the retiree health benefits that the Service promises to its workers. (Pensions and retiree health care are separate fringe benefits. Postal workers receive both in retirement.) If the transfer had occurred in 2010, it would have cut the Services retiree health benefit expenses by $7.7 billion that year and reduced the enterprises income-statement loss by an order of magnitude, from $8.5 billion to $0.8 billion.
I like getting mail......fund the the USPS and defund the abortion centers....easy, unless you are a politician.
That can’t happen. My stamps say forever on them. /s
Or, you could buy the stamps from your carrier and put the mail in your mailbox to be picked up not using any gas or wear and tear. But you knew that, didn't you?
I knew the end was near when mailboxes started disappearing.
Nearly all my “mail” is paperless electronic now.
Last time I was in the post office, I saw a woman questioned about a package she was trying to ship — Anything hazardous, flammable, etc.? — and she said, no, it’s just a small bottle of cologne. Guess what? You can’t send that via USPS! It could explode!
Advice I pass around freely: If you want to be happy, have nothing to do with public education, cable television, child protection services, the post office, credit cards, and muslims.
I work for the USPS. Everyone in our small office busts their
a** and goes out of their way to treat our customers well.
I make $11.50/hour, and I’m perfectly happy with that. I don’t share the same high opinion of FedEx that many seem to have. I just received a parcel today that was ordered, and, according to the company, shipped domestically twelve days ago. It was on my doorstep when I got home today. No tracking number, and anyone could have taken it during the hours it sat on my doorstep. Also, it cost twice what shipping it by USPS would have cost.
UPS does a good job in our rural area, but you’d be surprised by how many items they drop at the post office for us to deliver.
If I go to the library, yes, it is.
When you get your package smashed or water damaged, they still count it .... after all...they delivered it
Just got a package today that had to been shaken so violently, that the memory in its factory pack came loose.
You can’t make this stuff up. Try as I might, I can’t shake it hard enough to reproduce this affect.
No one said you don’t work your butt off. But you have to admit that the office you are working in is one of the most inefficient operations still in existence in the country.
People that used to pick cotton by hand worked hard too. Your missing the point.
“but youd be surprised by how many items they drop at the post office for us to deliver.” -— You do realize that they do this at the request of the shipper, it has nothing to do with them opting out delivering it to your doorstep.
UPS and Fedex give the shipper a discount if they have USPS do the final delivery especially in rural areas. This is because of the USPS pricing model underpricing local delivery due to political reasons and the fact that they assume local sorting is a strategic advantages.
In other words, the shipper is saying sucker and saving money on the deal.
I used to be a part time rural carrier years back and have an ex girl friend still working as a full time rural carrier. Now here is the truth. Takes about 2 and one half hours to case ( sort ) mail and get it on a truck for the average route. Then it takes anywhere from 2 to 4 hours to deliver, depending on how many miles the route is. The carrier get paid for 8-9 hours to do the whole thing. Its called an evaluated route. Some, like my ex, start work at 7:30 am and are on their way home by ll:30, except for the few weeks before an election and around xmas when the mail is heavier. So it would seem to me, that you could eliminate about 1/3rd to 1/2 the routes and have the carrier actually work the 8 to 9 hours they are paid and save several billion each year. On the City carriers, they are paid by the hour. They are not encouraged to move faster than a snails pace I once did a rural route and a city route and got back before any of the city carriers finished their route. I was privately chewed out by several carriers for making them look bad, but they really didn’t care because their union only allows them to deliver only so much mail each day. Same with the Rural, or the USPS has to pay them overtime, and overtime has been rules out since last year , so the job gets milked. And that’s the facts. The rural carriers union is in the middle of a contract negotiations and are currently working without a contract. The city carriers recently signed theirs and gave up some concessions, but not enough to save the PO. The Rural Union isn’t as strong and will likely cave at some point.
You have to catch the carrier. You used to be able to leave cash in the outgoing mail slot, but they stopped that because people were pocketing the money or saying they never saw it upon emptying the box.
I am sure this varies across the country. It isn’t easy to buy stamps from the post man in the burbs anymore.
Their solution was to allow a lot of places to resell stamps, like drug stores etc... Problem solved, so they thought.
If it was so easy to get stamps, I wouldn’t ever go to the post office.
You do realize that the USPS being the official post carrier of the United States has agreements with foreign posts for the delivery of your packages? Right?
USPS didn’t deliver your package, it just went inter-post.
It’s always great to meet Freepers who don’t have a knee-jerk reaction to everything, and a fellow business-owner as well.
It is reasonable business practice to ensure that when a driver goes out that all the mail is loaded in such a way as not to require any resorting at all.
Of course, this would require real hub and spoke networking in their logistical trunk.
Thank you for your post, my neighbor was a life long postman in the rural county I grew up.
People on the board think I am so anti-USPS, but I really think it could be a growing concern. I can think of all kinds of wonderful side businesses USPS could branch into.
At some point this country is going to run out of money, it would be nice if USPS didn’t have to depend on the charity of Uncle Sam and the employees of USPS had real job security based on the strength of their business instead of their political clout.
USPS, being the official carrier of the United States is a awesome asset to a private concern running it. It would grow to the point people would call it a monopoly.
Key West, no problem, That place in Alaska though, you have to know that the mail flies in, there isn’t any such thing as ground mail in a lot of Alaska.
When running a business, you have to charge for the service you are providing. Hell no, it isn’t going to be 44 cents.
The Post office is stupid to do it. All of that is flown in.
The Post office is charging more for packages in an attempt to subsidize the letters. So yes, you pay more for the letter but you get reduced prices on the packages. You are paying for what you get.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.