Posted on 08/21/2021 5:26:16 AM PDT by Kaslin
Changing tastes and trends can be a death sentence for companies and even entire industries. The United States Postal Service (USPS) knows this too well having delivered an ever-dwindling supply of mail over the past couple of decades. In fact, the agency has lost more than $80 billion over the past 15 years and has had a tough time keeping expenses below revenues. Fortunately, the agency is doing some much needed soul-searching and examining the experiences of other businesses and industries to see how it can turn its ship around. This is a good idea for America’s mail carrier if it can nimbly cut costs and maintain their reputation for reliability. Millions of consumers are watching as the USPS tries to get back into the black.
In a recent inspector general (IG) report, the USPS searches for inspiration in its quest to improve its finances. The agency favorably cites the experience of Amtrak in supposedly improving its business model, though the case study lacks some much-needed context. According to the IG, “Beginning in 2017, new Amtrak leadership set new goals, emphasized cost cutting and more strategic investment decisions, and presented a new vision to Congress.” This included negotiating new collective bargaining agreements, pursuing more operations in-house as opposed to contracting, and reducing managerial headcount.
While these changes likely made some difference on the margin, Amtrak’s overall financial situation remains bleak. In 2019, on the eve of the pandemic, Amtrak posted a net loss of $880 million. Net loss figures have been trending downward over the years, and 2019’s figure was undoubtably an improvement from 2014’s net loss of $1.1 billion. But expenses are still exceeding revenues despite an estimated $2 billion per year in taxpayer subsidies. A 2018 analysis from Ernst and Young concludes, “the Company has a history of operating losses and is dependent upon substantial Federal Government subsidies to sustain its operations and maintain its underlying infrastructure.” These problems continue as costly Amtrak plans to revamp passenger hubs such as Union Station are behind schedule and over budget. Amtrak’s “pivot” doesn’t exactly offer much hope for America’s mail carrier.
The USPS is on somewhat firmer footing when it cites the experiences of Netflix and Blockbuster in navigating a rapidly changing market. Netflix has emphasized a small physical footprint, forgoing retail locations unlike the Blockbuster of yesteryear. The IG notes that, in contrast, “the Postal Service maintains a nationwide network of 31,000 retail post offices that are experiencing declining customer use. Post office transactions decreased by one-third between 2004 and 2020, and 42 percent of post offices do not generate enough revenue to cover their costs.”
The USPS could try to consolidate their network of post offices and/or enter partnerships with companies with large retail footprints to save on large, fixed infrastructure costs. That’s easier said than done, though, given institutional constraints. When USPS and Staples kicked off a pilot program in 2013 to provide postal services at hundreds of the retailer’s locations, the American Postal Workers Union (APWU) cried foul and launched protests and legal actions against the agency. The promising partnership, which lowered costs for the USPS and expanded options for consumers, was finally killed by a 2016 National Labor Relations Board ruling instigated by the powerful union.
Congress may need to step in to give the agency a freer hand in collaborating with companies and maintaining its footprint in a more cost-conscious way. The USPS also has it in their power to reduce losses by ensuring that package prices reflect delivery costs and more routinely auditing bloated middle-mile highway contracts.
Ultimately, no one solution will bring the USPS back into the black. But the agency and Congress can take incremental steps in the right direction and look to proper role models (i.e., not Amtrak) for inspiration.
Who will deliver our junk mail?
Most of my correspondence and bills are paid on line. When I do go to the post office they keep trying to push stamps on me. I have the same book from 3 years ago.
The post office is fast becoming a buggy whip factory.
I despise the USPS. They are and have been the worst managed agency known to Americans since it stopped being the Pony Express. Far worse than your local DMV office.
How many times have you gone into a USPS building and find long lines? Always. They never open a new line when it gets busy, just the opposite. I have seen a counter employee close their station and walk away from a full house when break time comes! That never happens in a private business.
Besides terrible service, this year the new local postmaster said all residential mailboxes must be a certain height off the ground and must be placed on the right hand side of the street. She gave the residents 2 weeks to make the changes until she stopped mail delivery to the ones who fail to comply.
2/3rds of my city had to make adjustments to their mailboxes. Most folks had to raise their box 2-4 inches. No big deal except most all of the mailboxes were installed 10-20-30 years ago when my city was developed. Many of my neighbors are elderly with health issues, retired or it’s a beach house they don’t use year round. People here thought the postmaster was being a thug.
Hate waiting in line to buy stamps.
Around here they used to have stamp vending machines in the lobby. Loved them but to post office removed them all.
Now I buy my stamps at Food Lion. They only have the Forever stamps - but a stamp is a stamp.
And the First Class stamps....Forever stamps....are going up to 58 cents this month.
What they really need to do is start transitioning to an every-other-day delivery pattern, rather than every day.
Half of all delivery routes get Monday-Wednesday-Friday delivery, the other half gets Tuesday-Thursday-Saturday delivery.
Get rid of all contract carriers, and then start reducing the permanent workforce via attrition.
Reduces payroll expenses and extends the life of the rolling-stock.
“the American Postal Workers Union (APWU) cried foul and launched protests and legal actions against the agency.”
Unions would rather kill 100% of the jobs than save 50% of the jobs.
When did Anderson Cooper dye his hair?
“Unions would rather kill 100% of the jobs than save 50% of the jobs.”
The bloated and entitled workforce will never, ever go for any type of reform. When (and a big IF) the day comes that the USPS goes the way of the DoDo bird things might change. Until then — just grin and bear it.
Roll models? Seriously. The USPS is so broken and broke there is no turn around. Completely privatize.
Like how the unions killed Eastern Airlines as a warning to the other airlines not to cross them.
As for mail usage, I used to buy stamps by the roll. Every month I had many bills and book/record club response cards to send in. I would go through books of checks and a roll of stamps every few months. Now I handle my bills online, rarely use a stamp or check, and am regularly hassled by my billers about how I should switch to electronic bills and statements. I figure between printing and postage that a paper bill costs at least a dollar, so unless they are willing to to split that with me as a discount I'll keep making them mail me bills.
So I went from about 15-20 stamps per month to maybe one. 95% usage reduction by your customers is not a sustainable business model.
Forever.....means forever going up in price.
The intrinsic problem is the union. It would also seem the usps has become superfluous.
The only thing they have got is the threat of the feds if you cross them. They should specialize in secure transactions....wiring money..transporting hard cash...important documents...electronic data...if they can guarantee safe transmission of communication(not like the internet) like using undecipherable quantum communication and federal prosecution for violators, that might give them a market. Weaken the unions a bit, then, do not replace positions for retiring folk. They are doomed unless they can offer something special to the public.
The postal workers could put a little spring in their step behind the counter. I have never seen a slower bunch of people in my life. It must be considered quite an achievement by folks behind the counter to set world records on the amount of time it takes for even the simplest tasks.
Retired from the post office as a technician and it still makes me angry if I have to mail a package at the window. Their inefficiency is built in by poor management and lack of change. It should be privatized, when I worked there they always spoke of change but it never happened or there were changes for the worse.
White and thinning hair is the new cool.
lol...The USPS is now the number one domestic spying agency in the country.
https://www.nytimes.com/2013/07/04/us/monitoring-of-snail-mail.html
From the Gray Old Lady no less.
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