US Post Office on the brink of default

[red states rule]

Seems the USPS has a delivery faliure and may have to cut expenses like they should have done years ago

But they have to deal with the union thugs first





The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

“Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”
In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include (http://about.usps.com/news/national-releases/2011/pr11_wp_workforce_0812.pdf) eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers — nearly one-fifth of the agency’s work force — despite a no-layoffs clause in the unions’ contracts.

The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.

As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.


http://www.nytimes.com/2011/09/05/business/in-internet-age-postal-service-struggles-to-stay-solvent-and-relevant.html?_r=1

[J.T]

When the USPS was formed, we didn't have e-mail, fax machines, and nationwide delivery services. In the modern day, I'm not sure USPS is necessary anymore- or at least not as it is now. Surely, UPS, FedEx, and smaller local and regional couriers (who could contract with the major couriers to delivery packages/letters from the major carriers offices in the cities to more rural locations) could fill much of the role the USPS has long filled. The gov't could still mail official paperwork through these couriers. The only real concern I can see is whether a private company should handle the mailing and delivery of ballots for those who vote by mail.

If we keep USPS, do we need 6-day/week delivery? Wouldn't 3 days/week be fine? Or even weekly in the smaller towns? Sure, it'd kinda suck for someone in the middle of nowhere who has Netflix, but there's not much to be done about that.

[ConHog]

When the USPS was formed, we didn't have e-mail, fax machines, and nationwide delivery services. In the modern day, I'm not sure USPS is necessary anymore- or at least not as it is now. Surely, UPS, FedEx, and smaller local and regional couriers (who could contract with the major couriers to delivery packages/letters from the major carriers offices in the cities to more rural locations) could fill much of the role the USPS has long filled. The gov't could still mail official paperwork through these couriers. The only real concern I can see is whether a private company should handle the mailing and delivery of ballots for those who vote by mail.

If we keep USPS, do we need 5-day/week delivery? Wouldn't 3 days/week be fine? Or even weekly in the smaller towns? Sure, it'd kinda suck for someone in the middle of nowhere who has Netflix, but there's not much to be done about that.


I personally think that getting rid of/cutting down on delivery routes would be better than shutting down Post Offices. Most people are able to make it into a Post Office to pick up their mail on at least a semi weekly basis. And little to nothing of importance is mailed nowadays.

[J.T]

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.



Anyone know when these contracts expire? Clearly, it's time to go back to the negotiations table. In this situation, it's simple.

Union: WE WANT MORE MONEY!

USPS: That's nice. Renegotiate the contracts and we can keep paying you. The alternative is we go bankrupt and you get absolutely nothing. We're not exactly breakin' your balls here- we're tyin' to stay in business so we both still have jobs. We either renegotiate and both still get paid- or we go down together and we'll see each other at the unemployment office. Your call...

Cut what we can cut. We simply cannot afford to go further into the read to save USPS at this time. They'll have to renegotiate and save their employer and their jobs or risk joblessness if we can't make enough cuts elsewhere. That's the reality of the situation that must be faced.

[red states rule]

What a shocking thought? The USPS cannot compete in the free market so they need to either scale back their operatons or - gasp - close up shop

Does anyone think there is no private company that could step in and deliver the mail at a hceaper cost and make a profit doing it?

[pete311]

agreed, all I get is junk mail

[fj1200]

What other industry is specifically named in the constitution?

[KartRacerBoy]

The practical problem I see with ending the USPS is that rural america will suffer disproportionately. Internet is crazy expensive IF it's available. That's not a little problem.

[fj1200]

The practical problem I see with ending the USPS is that rural america will suffer disproportionately. Internet is crazy expensive IF it's available. That's not a little problem.

You sure about that? They do have phone service do they not? But yes they will but that doesn't mean three day a week delivery wouldn't work for them too.

[KartRacerBoy]

You sure about that? They do have phone service do they not? But yes they will but that doesn't mean three day a week delivery wouldn't work for them too.

Yes. I've had this conversation with friends that live in rural farm county many times. No cable tv. Internet is restricted to satellite service or dial up.

[fj1200]

Yes. I've had this conversation with friends that live in rural farm county many times. No cable tv. Internet is restricted to satellite service or dial up.

Hmm, interesting. Would it be insensitive of me to say, "sucks to be them"?

I'm sure that there is a reasonable accommodation that can be made for rural customers without hamstringing the USPS to solve a national problem by accounting for a minuscule percent of the population.

[KartRacerBoy]

Hmm, interesting. Would it be insensitive of me to say, "sucks to be them"?

I'm sure that there is a reasonable accommodation that can be made for rural customers without hamstringing the USPS to solve a national problem by accounting for a minuscule percent of the population.

No. You'd just be me. :laugh:

But what about the elderly? My 80 yr old parents are terrified of computers. I would think there would have to be a transition period in eliminating the post office for many reasons.

[J.T]

The practical problem I see with ending the USPS is that rural america will suffer disproportionately. Internet is crazy expensive IF it's available. That's not a little problem.
Why does the Federal Government need to provide letter and parcel delivery in the first place?

[fj1200]

No. You'd just be me. :laugh:

But what about the elderly? My 80 yr old parents are terrified of computers. I would think there would have to be a transition period in eliminating the post office for many reasons.

What about them? We shouldn't have to over-design the whole system to account for a piddling minority. Besides, there will always be something to account for delivery.

[Missileman]

We already know how this is going to shake out. Since the USPS is a union organization, Obama will bail them out instead of letting them re-organize through bankruptcy and nullify the union contracts. Then we can face the same bailout requirement a year or two from now.

[red states rule]

The practical problem I see with ending the USPS is that rural america will suffer disproportionately. Internet is crazy expensive IF it's available. That's not a little problem.

The real problem is the union representing the postal workers.




The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.

As any computer (http://www.debatepolicy.com/#) user knows, the Internet revolution has led to people and businesses sending far less conventional mail.

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

http://www.outsidethebeltway.com/postal-service-labor-contracts-forcing-crisis/

[fj1200]

The real problem is the union representing the postal workers.

How do you blame a union for being a union? Government gives the union its power and forces labor contracts to be held higher than other executory contracts in a potential bankruptcy. In a closed-shop environment they also force the company to negotiate with an essentially monopoly labor provider, they have little recourse than to ultimately submit.

[KartRacerBoy]

We already know how this is going to shake out. Since the USPS is a union organization, Obama will bail them out instead of letting them re-organize through bankruptcy and nullify the union contracts. Then we can face the same bailout requirement a year or two from now.

It's a federal govt organization. I'm no bankruptcy lawyer but I think bankruptcy is for purely private business,, so I'm guessing NOT AN OPTION.

Obviously the unions are going to have to rethink their contracts, though. I think at the least the PO is going to have to increase their mail rates by a factor of 2. We'll see how that works out.

[ConHog]

It's a federal govt organization. I'm no bankruptcy lawyer but I think bankruptcy is for purely private business,, so I'm guessing NOT AN OPTION.

Obviously the unions are going to have to rethink their contracts, though. I think at the least the PO is going to have to increase their mail rates by a factor of 2. We'll see how that works out.

Yeah, that's the way to make some money. At a time when the demand for your product is DOWN, double your prices. :slap:

[KartRacerBoy]

Yeah, that's the way to make some money. At a time when the demand for your product is DOWN, double your prices. :slap:

There is some base level of demand for mail service that will need mail service whatever the cost. I realize they are going to have to cut their costs somehow, but they need to figure out how to raise revenue by some amount, too. For the time being, they are going to be delivering to all the homes in America.

What would I do without my Captial One adverts in the mail everyday?

[MtnBiker]

The practical problem I see with ending the USPS is that rural america will suffer disproportionately. Internet is crazy expensive IF it's available. That's not a little problem.


USPS mail service in rural america is also crazy expensive, it is just subsidized by tax dollars.

[ConHog]

The solution is pretty simple actually. Charge people who wish to have home delivery a fee. All others get no home delivery. I wouldn't have a problem with that, because I wouldn't pay the fee. They can throw my junk mail in the garbage.

[red states rule]

The solution is pretty simple actually. Charge people who wish to have home delivery a fee. All others get no home delivery. I wouldn't have a problem with that, because I wouldn't pay the fee. They can throw my junk mail in the garbage.

Do you think cutting overhead would be a logical solution to solve the problem? Of course the union bosses think the government will bail them out (i.e the taxpayers) and they can continue business as usual

Whay business can stay in business when labor is 80% of their cost?

[ConHog]

Do you think cutting overhead would be a logical solution to solve the problem? Of course the union bosses think the government will bail them out (i.e the taxpayers) and they can continue business as usual

Whay business can stay in business when labor is 80% of their cost?


Oh I meant to charge people for home delivery in conjunction with cutting costs. Not in lieu of.