Post office was $3.8 billion in the red last year

Associated Press Via Yahoo News ^ | 11/17/2009 | Randolph E. Schmid

[ErnstStavroBlofeld]

The Postal Service reported a loss of $3.8 billion last year, despite a reduction of 40,000 full-time positions and other cost-cutting measures.

The loss was $1 billion more than the year before despite job cuts and other efforts designed to save billions of dollars, postal officials said Monday.

"Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service," Chief Financial Officer Joseph Corbett said.

"The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs," he said.

The post office has been struggling to cope with a decline in mail volume caused by the shift to the Internet as well as the recession that resulted in a drop in advertising and other mail. Total mail volume was 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a decline of almost 13 percent.

For the fiscal year that ended Sept. 30 the agency had income of $68.1 billion, $6.8 billion less than in 2008. Expenditures were down $5.9 billion to $71.8 billion.

Postmaster General John Potter is seeking permission from Congress to reduce mail delivery from six days a week to five, a move that could save the agency $3.5 billion annually.

[WVKayaker]

... But the bottom line is the Fed Gov is supposed to support this service, just like it supports the military. ...

No, FRiend, there is no Fed Gov. There are only taxpayers, whose money is taken by force, and redistributed as Washington politicians decide. The Fed Gov has no money of it's own. Your initial proposition is faulty. I must now pay 44 cents to mail a one ounce envelope.

The Fed Gov authorized the ESPS to function as a "quasi-gov" unit, with the goal of being self-sufficient. They have never achieved it, while giving more and more of our dollars to unions and their minions.

I just ordered some things from CAli, to be sent here in WV. I paid for 2-3 day PRIORITY MAIL delivery USPS. That was last Tuesday. I just checked and it passed through the Baltimore facility yesterday, but didn't make it to my local PO by closing time today.

I bought some things from Japan on the same day. I used UPS, and paid a little more. I got it in 3 days.

The USPS should be cut off the gum't teat. If you can't give good service, you can't get the business. USPS should sink or swim.

Your office may need help, but I imagine you could get three of your neighbors hired for what they pay the entrenched in your "office"! They're probably more used to working, too! UPS pays well, and gives good service. Fedex's number is in my head from 20+ years of calling for a pickup!

That's all right, though. Soon, this is all probably going to end, and the entire Fedrool Gum't will be looking for employment (and lining up at WalMart at midnight!). There's no there, there, to pay for those people to make rules, overtax people, and kill jobs...

The emperor not only has no clothes, he has no more gold, and the world sees him nekked and begging!

[presently no screen name]

PENSIONS

That's it! Why do gov't employees get better benefits than private industry who are profit making? Another tea party issue - curtail all gov't benefits!

[ASA Vet]

Postal Ping

[pnh102]

I kinda feel bad for the Post Office. It is still the best in the world.

[Soul of the South]

Another huge savings would be eliminating delivery of regular at the door in urban areas and older suburbs. Move mailboxes to the curb in all neighborhoods.

[muawiyah]

Postal Service pensions are identical to those throughout the federal government. Nothing special about them.

Interestingly enough USPS pensions have historically been pretty much paid for by the employees who are going to use them.

This gets a bit complicated since there are two different systems involved ~ FERS (the current system) and CSRS (the former system).

With CSRS the government takes about 7% of your salary and sets it aside in treasury bonds (a not uncommon method used by many companies and equity funds). On top of that you can have a non-matched 401(k).

With FERS the government takes a smaller percentage of your salary, but the agency puts a larger percentage into a similar fund. To offset the differences in costs the FERS payout is less than the CSRS (about half for later years of service in fact). In general FERS ends up far less expensive to the taxpayers (or USPS ratepayers) than CSRS. Plus, you can have a matched 401(k) account, etc.

The government does not have any of those notoriously expensive disability packages found in state and local systems, plus, the background funding is adjusted regularly to make sure the whole system is actuarily sound.

In short, the federal pension program ends up being financially neutral.

Your Congresscritters do engage in one egregiously corrupt practice ~ they count each year in Congress as being equal to TWO YEARS in the federal retirement system.

That practice should be eliminated.

[poobear]

Thank for clarifying. It still amazes me that postmasters can make 6 figure incomes with full benefits upon retirement in a business that is 3.5 billion in the red.

[USS Alaska]

Total mail volume was 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a decline of almost 13 percen

The number of junk mail pieces is more than half of that 177 billion.

When advertisers realize that they are not getting value for sending out the junk mail, the postal service will be in even bigger trouble.

[Wyatt's Torch]

Actually the US runs their post office better than just about every country in the world.

For comparison purposes, here are two that are privately held that are "better":

Deutsche Post Mail operations earned 880m Euro's through first 9 months. DPWN First 9 Months P&L

The Dutch Postal Group (TNT) made 413 million Euro's through first 9 months: TNT financial reports

[Wyatt's Torch]

Not a good analogy. the military does not have a source of revenue to help cover their costs. they are a 100% “cost center”. The Post Office charges discretely for its services and has a mandate to cover its costs. The USPS is also heavily unionized and has, until recently, had a policy of not cutting back on number of employees. It’s those personnel costs and extreme inefficiency of operations which cause it to not operate at a profit.

Compare the USPS to UPS which is also heavily unionized and operates at a significant profit due to one of the most highly engineered networks in the world.

[Wyatt's Torch]

...the right thing to do is have the gov't subcontract the service to FedEx (which it is already trending towards).

FedEx provides air transportation services for the USPS. UPS also does some of this. Neither handle any delivery of mail or packages. In fact, both FedEx and UPS utilize the USPS delivery network to deliver some packages via their SmartPost and Basic service options, respectively.

[jwparkerjr]

re: Close all small rural post offices that have no rural delivery routes

Having lived in such an area for most of my youth I would suggest an alternative to closing them, and leaving the residents without access to the postal system. Lease a space just big enough to accommodate the mail coming in and going out. Staff each one with one person who does everything, including the janitorial duties. Then impose a reasonable surcharge on mail handled by the facility to cover some of its costs.

[jwparkerjr]

re: The number of junk mail pieces is more than half of that 177 billion.

I get bundles of that stuffed into my mail box every day or so. I can’t help but notice they pay less for that than I do for a letter to my sister in Mobile. Either I’m paying too much or they’re paying too little. My bet is they are paying too little. Charge them what it costs to handle the material. I have no desire to subsidize their business, any more than I expect them to subsidize the letters to my sister.

[jwparkerjr]

Correct me if I'm wrong, but wouldn't UPS and FedEx have the same problem if they were required to provide service to every hamlet in America? The first thing UPS or FedEx does when I present a package is check the zip code to determine if they provide service to that area. If not, I'm out of luck. That ability to pick and choose areas served is a huge cost containment advantage.

I know the post office has a lot of problems. I have known a couple of long-time post office workers and the horror stories they tell will make your eyes bleed. But in their defense I can't recall sending a letter, or expecting one, that didn't get to it's destination as promised.

[Wyatt's Torch]

No doubt that “Universal Service” is a big issue to the USPS. Part of the problem is that there is no distinction in charges for rural delivery. Both UPS and FedEx charge differently for delivery in those area’s. the other part of the problem is the rationalization and optimization of their networks. The USPS has not gone through that process nearly to the extent as UPS and FedEx have. There is very little incentive for the USPS to do so as they are not held accountable by shareholders like the two private carriers are.

[jwparkerjr]

I have worked at several places in my 55 years of working that should have been the best place around to have a job, but because of various things, working there actually pretty much sucked. The post office strikes me as that kind of place to work! It’s an invaluable service, and most customers are appreciative of good service, provided with a smile and a sense of willingness to please. But for some reason it’s nearly impossible to find a happy postal worker. Something about that place seems to suck the work ethic right out of everyone on the job. There motto should be, “If you’ve got what it takes, we’ll take what you’ve got!”

[Wyatt's Torch]

Has anyone, other then Newman and Cliff Clavin, ever aspired to grow up and be a Postal worker? it’s a government job with no incentive to do well and no punishment if you don’t. Kind of like communism, it is soulless.

Compare that to UPS and FedEx where employees are rewarded for good performance and fired/run off for poor performance.

[DrC]

“Postmaster General John Potter is seeking permission from Congress to reduce mail delivery from six days a week to five, a move that could save the agency $3.5 billion annually.

Hey, John, why not save $71 billion by shutting down altogether? I’m pretty sure FedEx and UPS would have no problem handling what you can’t.

[Skenderbej]

Like the efficiency of waiting in line at the post office just to buy one stamp? I went last week and our post office doesn’t have an automated stamp vending machine. There were 3 people in line ahead of me with no more than two packages each; two clerks were working. I stood for twenty minutes before I got my turn. All told, it took nearly 25 minutes to buy a 44 cent stamp.

With UPS I can just print a label and stick it on my doorstep after filling out a form online.

Just because the post office is the most efficient in the world doesn’t make it efficient.

[raccoonradio]

Am a postal sorting clerk (23 yrs in the job). While I’m for less govt. involvement, etc., hopefully our service has been pretty good over the years and pretty affordable. Note:

—You would think the debt could be made up by a price increase—say, from 44 cents to 50. Can’t be done. Under law you can only increase it so much, keeping with rate of inflation. Let’s say it did go up to 50 cents though. Send a letter for that price 3,000 miles away. Daily newspaper: 2 or 3 times that. Other consumer goods have gone up but postal
rate not all that bad. How about a buck for a stamp? Nope.

Now consider how much a 1 cent increase in the price of gas would affect the postal service. All the transportation costs involved.

Or the money that had to be spent on anthrax-detecting material after 2 postal workers lost their lives not long after 9/11

As much as I hate quoting a liberal comedian, Jimmy Tingle had a routine in ‘88 talking about how outraged people were that “the price of a stamp went up to a quarter! Is there no God? How do people live there. Listen, a guy comes to your house, picks up a letter, delivers it 3,000 miles away...for twenty...-five...cents. You want change? TIP
the guy 3 cents, man!”

Of course this was before e-mail, etc.

“There’s less mail to sort”. Tell me about it: at my facility many have taken early retirement so now we have MORE mail (per worker) to sort (or some kind of consolidation of facilities has done that). It’s more hectic than ever trying to get it all out
(I’m in a manual area; as much as machinery/automation can sort a lot of mail in a little time, there is still a need for manual)

The P.O. has costs related to pensions and health care which need to be addressed. They are trying to save money by stopping new facilities being built; consolidating
districts; early retirements/attrition, and so on. We try to
get money from the gov. but can only get so much.

>>There are far better arguments against socialized medicine than our pretty efficient postal service.

Indeed. Oh, and have we gone through a postal strike
lately? Nope, because I think we’d be fired if we tried.
We’re deemed essential workers. The last strike was in ‘70
and it was hell for the country.

The current postal unions came about after that, I think. And speaking of unions, does mine (Amer Postal Workers) want us to believe that Obama, whom they supported, is good for us...because he’ll help to bring universal health care—and ours will now suffer? They won’t come out and say that.

And for every rare story about “letter falls behind
filing cabinet, takes 56 years to deliver!”, realize that billions of mail pieces DO get to their destinations in a timely manner.