United States Postal Service =

[MililaniBuckeye]

If the USPS processes 584 million pieces of mail per day, even at $0.44 per piece (assuming every one is a letter and not a package), that's $257 mil a day they get in revenue. At six days a week, or about 313 days a year, that's over $80 billion. Sorry, but I think they should be turning a huge profit on that revenue...

 

[Fungo Squiggly]

If the USPS processes 584 million pieces of mail per day, even at $0.44 per piece (assuming every one is a letter and not a package), that's $257 mil a day they get in revenue. At six days a week, or about 313 days a year, that's over $80 billion. Sorry, but I think they should be turning a huge profit on that revenue...

I agree that they should be a lot more efficient and should be either making money at the current rates or charging less and breaking even.

I guess my main point, which I probably didn't articulate clearly, was that, despite that known inefficiencies, they still provide a fairly reliable service at a fairly reasonable price.

 

[sandgk]

There is one significant assumption Mili and Bucky Katt are making - the average price per piece.

The volume of junk mail far outweighs the balancing of revenues from higher priced large letter or parcel delivery. That overwhelming volume of business / junk mail is discounted in cost. This results in a net price for every piece handled by the USPS of about $0.38, resulting in their revenues for 2009 of about $68-Billion.

I agree, if they were operating at an average price per piece of $0.44 they would be in clover - well, to the tune of about $9 Billion in profit. I'm heartened to hear you both implicitly support a hike in postal rates to a more realistic level. Bring back Saturday service!

As for that $9 Billion in profit they would then rake in with an average rates of $0.44 per piece. That is more than enough to offset the unusual manner in which they have to declare all their pension obligations instantly (the $8.5 Billion charge found on page 4 of the earlier linked piece). Notably, that is an acounting "burden" which is not foisted on UPS or FedEx.

 

[Taosman]

The Postal Service's real problem is being at the end of an archaic technology........paper mail. It's a losing business model.
Why not start with cutting daily mail service then fade it out all together?
It's gonna happen like the printed newspaper.

 

[Dryden]

There is one significant assumption Mili and Bucky Katt are making - the average price per piece.

The volume of junk mail far outweighs the balancing of revenues from higher priced large letter or parcel delivery. That overwhelming volume of business / junk mail is discounted in cost. This results in a net price for every piece handled by the USPS of about $0.38, resulting in their revenues for 2009 of about $68-Billion.

I agree, if they were operating at an average price per piece of $0.44 they would be in clover - well, to the tune of about $9 Billion in profit. I'm heartened to hear you both implicitly support a hike in postal rates to a more realistic level. Bring back Saturday service!

As for that $9 Billion in profit they would then rake in with an average rates of $0.44 per piece. That is more than enough to offset the unusual manner in which they have to declare all their pension obligations instantly (the $8.5 Billion charge found on page 4 of the earlier linked piece). Notably, that is an acounting "burden" which is not foisted on UPS or FedEx.

As the IT Architect for one of the nation's leading direct mailers, I must take issue with your use of the term "junk mail."

There is no "junk mail." It is called "targeted mail," thankyouverymuch.

:p

 

[buckeyefool]

The Postal Service's real problem is being at the end of an archaic technology........paper mail. It's a losing business model.
Why not start with cutting daily mail service then fade it out all together?
It's gonna happen like the printed newspaper.

You do know there are many people who still refuse to use any kind of online bill payment, because they either a dont have access to the internet, or don't trust it. So if we get rid of paper mail all together how would these people a get their bills, and two pay their bills?

 

[BuckeyeFlorida]

You do know there are many people who still refuse to use any kind of online bill payment, because they either a dont have access to the internet, or don't trust it. So if we get rid of paper mail all together how would these people a get their bills, and two pay their bills?

Reduced residential service days (to MWF), while maintaining 6 day business service and keeping prices the same. I, for one, don't get nearly enough important mail to justify 6 day service. Most everyday 95% of our mail is for the fiancee with 3-5 Victoria Secrets and other clothing catalogs/week. Absolute waste of time to get the mail PLUS that's an awful lot of trees being wasted.

 

[sandgk]

As the IT Architect for one of the nation's leading direct mailers, I must take issue with your use of the term "junk mail."

Here's the target for most of it ...

There is no "junk mail." It is called "targeted mail," thankyouverymuch.

:p

You're welcome :p

 

[Dryden]

Reduced residential service days (to MWF), while maintaining 6 day business service and keeping prices the same. I, for one, don't get nearly enough important mail to justify 6 day service. Most everyday 95% of our mail is for the fiancee with 3-5 Victoria Secrets and other clothing catalogs/week. Absolute waste of time to get the mail PLUS that's an awful lot of trees being wasted.

One idea that's been kicked around for years is withholding all presorted mail pieces (the targeted ads, preapproved credit card offers, catalogs, magazines, etc) through the week and then bagging them for Saturday delivery. There are two major benefits in doing this without having to slash any deliverable service days. For one, the carriers could deliver weekday mail much more efficiently, since they would undoubtedly be able to skip at least half of the residential addresses on a given day. They could travel lighter, make fewer stops, and have their route completed much quicker. If it were efficient enough that one carrier could now handle the routes previously requiring two delivery persons, the post office could cut the work force in half. The second benefit is the USPS could sell advertising/coupon space on the Saturday bag and have the additional one-day uptick in delivery handled by part-time labor (no benefits, pensions, and all those other things that are the real reason the post office loses money).

See, the USPS isn't in dire straights because of cost & (in)effiency of mail. It's in trouble because of the pay/benefits to the workforce, and exponentially expanding roll of retirees drawing benefits. The USPS is being run like a private enterprise while simultaneously having to pay out government-quality benefits under CSRS/FERS (Civil Service or Federal Employee Retirement Systems).

What the USPS needs to be financially stable is a full and total severance from the government ties which essentially prevent them from slashing jobs and cutting benefits to retirees like any private institution would enjoy (and have already done five years ago).

 

[buckeyefool]

Reduced residential service days (to MWF), while maintaining 6 day business service and keeping prices the same. I, for one, don't get nearly enough important mail to justify 6 day service. Most everyday 95% of our mail is for the fiancee with 3-5 Victoria Secrets and other clothing catalogs/week. Absolute waste of time to get the mail PLUS that's an awful lot of trees being wasted.

I agree with you, cutting in down shouldn't be a problem. My problem was with Taos's idea that someday soon there will be no mail service. Just not going to happen

 

[DaytonBuck]

I don't understand how closing a day will help business. If I had a store that sold ties, I wouldn't expect to become more profitable by closing and losing a days worth of sales.

 

[Taosman]

1. It's a dying business model. Even with 5 day service it will eventually not be profitable some time in the near future.

2. It's cuts expenses dramatically.

3. People have to change with the times and sometimes that means a little discomfort at first.

It's the Darwinian business model in action. The numbers are on a downward trend.

 

[BayBuck]

I don't understand how closing a day will help business. If I had a store that sold ties, I wouldn't expect to become more profitable by closing and losing a days worth of sales.

Assume you will be doing the same amount of business (people will presumably still need to send all the same mail), but without the overhead of keeping your store open that extra day every week. But a tie shop isn't a perfect analogy because for the most part USPS is selling a service, not a product.

 

[CleveBucks]

I don't understand how closing a day will help business. If I had a store that sold ties, I wouldn't expect to become more profitable by closing and losing a days worth of sales.

Cut the number of miles your mail trucks drive (and associated fuel/maintenance costs) by 17%. Presumably cut the salaries of mailmen because they're working fewer days. etc

 

[Fungo Squiggly]

Assume you will be doing the same amount of business (people will presumably still need to send all the same mail), but without the overhead of keeping your store open that extra day every week. But a tie shop isn't a perfect analogy because for the most part USPS is selling a service, not a product.

Not to mention that they have a monopoly. It's not like people can really take their business elsewhere for standard mail.