Is rural mail delivery the real problem with the USPS budget?

posted at 1:01 pm on February 9, 2013 by Jazz Shaw

It’s Saturday, and I went out on the front porch this morning after shoveling out from Nemo and got the mail as usual. There was an advertisement trying to get me to switch homeowner’s insurance and a coupon flyer for the local grocery store. That sort of surprise waiting in the mailbox doesn’t exactly get me all up in arms over the Post Office’s idea to cancel Saturday mail delivery. Up until now, I’ve been assuming that the Post Office is simply an unprofitable enterprise and they may have to put trucks out on the road less often to reduce costs. I suppose I’ve been mostly in line with Jon Stewart’s rather cynical take on the subject.

I can’t believe the business model of transporting letters with vehicles across the country for forty cents a pop is failing. Sorry… where ya want me to take that? Hawaii? Yeah, no trouble. I’ll put it on a plane, get it there in two days. Uh… ya got a quarter?

But perhaps there’s more to the story than that. Doug Mataconis links to Matthew Yglesias who seems to feel that government subsidy of more expensive deliveries to rural areas is part of the rot at the heart of this business model. What was once a lucrative monopoly, according to this line of thinking, has been squeezed out of the profit margins.

But the monopoly has become less lucrative and that’s not going to change in the future. That’s squeezed the budget, squeezed postal workers’ compensation packages, and is now squeezing the quality of nationwide mail service. As a country, we need to ask ourselves whether providing subsidized mail delivery to low-density areas is really a key national priority. Without the monopoly/universal service obligation, it’s not as if rural dwellers wouldn’t be able to get mail, it’s just that they might need to pay more in recognition of the fact that it’s inconvenient to provide delivery services to low-density areas. Nostalgia-drenched Paul Harvey Super Bowl ads aside, it’s not the case that rural Americans are unusually hard-pressed economically or are disproportionate contributors to the economy. They are, rather, the beneficiaries of numerous explicit and implicit subsidies, of which the Postal Service’s universal service obligation is one.

Doug seems to agree:

Most of the complaints one hears about privatizing first class mail and ending the USPS monopoly on its delivery center around the issue of what is to be done about delivery to rural areas. The basic idea behind is that it shouldn’t cost rural customers, or those who want to correspond with them, more to send first-class mail than it does to send first-class mail from one major city or suburb to another. There’s no economic rationale for this kind of policy. Indeed, it exists nowhere else almost nowhere else in the delivery business right now. If you want to send a package via USPS, you are generally going to pay based on where you’re sending it to. UPS prices its delivery services in much the same manner. The only place you see “flat-rate” pricing is in things such as overnight mail, which is based on an entirely different kind of business model from regular package shipping and for which the customer is paying a premium for the convenience of next-day, or 2nd-day, delivery of something that would ordinarily take a few days longer.

I’m no package delivery expert here, but I’d always sort of assumed that the United States Post Office was pretty much designed with an untenable business model baked into the cake. It’s something which is mandated by the Constitution, thereby bringing the government into the mix, but it’s being expected to run at a profit while conforming to a business model which no sane, private business would ever consider. It costs more to drive a letter or package fifty miles out into the boonies than it does to simply get it to a commercial hub in a city or suburb with the bulk of the parcels. If you charge the same amount for all of the letters, somebody is getting more value for the same price point than everyone else, simple as that. I suppose you have to average all the deliveries together to come up with a flat price which keeps you in the black, but it’s got to be one hell of a lot more than fifty cents per letter.

With that in mind, it’s hard to see how eliminating Saturday delivery does much to address the real problem. You’re still running the same losing business model… you’re just losing money more slowly by doing it one less day per week. I’m still not entirely opposed to just having the Post Office jack up the rates far enough to make the service profitable. If it costs more to mail junk – particularly bulk advertising and such – people might think more carefully about what they are mailing, rather than flooding our boxes. Exceptions could be made for free or low cost postage for the mailing of payments to utilities or answering required government correspondence. But do you really think it’s reasonable to be able to send a letter from Virginia to Oregon in two days for four bits?


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As a country, we need to ask ourselves whether providing subsidized mail delivery to low-density areas is really a key national priority.

So is Matt opposed to Obamaphones as well?

rbj on February 9, 2013 at 1:10 PM

I’m still not entirely opposed to just having the Post Office jack up the rates far enough to make the service profitable.

-

Well duh.

CW on February 9, 2013 at 1:10 PM

Must be a slow Saturday.

bw222 on February 9, 2013 at 1:11 PM

The long term goal of environmentalists and liberals is to cram us into dense urban centers in order to reduce humanity’s footprint on the earth. Any move to make rural life less attractive is going to be part of this. We have to take this into account here. The inclination of conservatives is to be pro-market and oppose subsidies like this. But be wary of any liberal like Yglesias pushing anything that makes rural living less attractive, even if it is appealing to conservatives on the surface. They have an agenda.

Mark1971 on February 9, 2013 at 1:15 PM

I would guess the companies who send out this endless junk mail have very effective lobbyists. So we help them send their ads to rural people, too.

PattyJ on February 9, 2013 at 1:16 PM

Why do we need US mail delivery more than once a week?

Count to 10 on February 9, 2013 at 1:17 PM

I live in a rural area. Very rural. I see FedEx and UPS pass my house nearly every day. I find it very, very, very difficult to believe rural deliveries are the root of the problem.

Trust me, if UPS and FedEx weren’t making a profit delivering to rural areas, they wouldn’t deliver to them.

I would bet the USPS delivers a lot more on a daily basis in the rural area than UPS or FedEx, so the economy of scale is on their side.

ButterflyDragon on February 9, 2013 at 1:18 PM

Indeed, it exists nowhere else almost nowhere else in the delivery business right now.

One word: Tennessee Valley Authority.

Dusty on February 9, 2013 at 1:19 PM

If the issue is that rural areas cost more to cover, you can keep the price the same by making the delivery frequency depend on population density.

Count to 10 on February 9, 2013 at 1:21 PM

Why do we need US mail delivery more than once a week?

Count to 10 on February 9, 2013 at 1:17 PM

Back when my mail order business got most of it’s revenues via checks from customers in the mail, yes, I did need my mail as often as possible. One day’s worth of mail could determine if I made payroll that week.

But since electronic payment has taken over the vast majority of the business revenue I don’t depend on the mail like I used to.

ButterflyDragon on February 9, 2013 at 1:21 PM

I live in a rural area and stop by the PO on the way home from Church every Sunday to check my PO Box. Most of the people who live in the rural area I live in have a PO box and have some similar pattern. The only site delivery is in the actual little town the Post Office is located in.

My daughter lives in a semi-rural area and the Post Office delivers to the equivalent of PO boxes on the main road. The PO vehicle drives up to the boxes and puts the mail in. Covers about 50 addresses at each stop. In actuality the urban door to door delivery model involves more driving and delivery than the rural one in my or my daughters areas.

chemman on February 9, 2013 at 1:22 PM

Rural mail? I doubt weather that comes close to PENSIONS and PERKS.

Don L on February 9, 2013 at 1:23 PM

Which is more energy efficient, and which costs the government more:
500 people on a rural route, each driving into town to pick up mail at a post office that now needs 50,000 PO boxes or 25 counter people to distribute mail in a new giant building? Or a handful of people driving a route to deliver mail? Hot Air sure has a passel of economic ignoramuses – Jazz Shaw included. I do agree that the USPS should give up trying to deliver all the junk for next to nothing. Let the junk/bulk mailers pay the same as the rest of us.

Old Country Boy on February 9, 2013 at 1:23 PM

I don’t understand how they expect to save nearly enough money by cutting out Saturday delivery. It seems to me that they could cut their labor costs almost in half if they simply delivered to half their customers on Mon-Wed-Fri and the other half on Tue-Thur-Sat. As little as I use the USPS these days if I only got delivery three days a week I’d never miss it.

pfw51 on February 9, 2013 at 1:28 PM

It seems to me that the resistance to change is coming from within the organization itself. I’m “rural” and would have no problem at all getting mail once a week. Anything time critical is electronic delivery/payment/deposit anyway. If you follow the demise of the service’s volume you’ll find that I am not alone there. Packages? ok…that becomes a different issue but they have some competition there and if they can’t make it work, then they need to deal with it.

teejk on February 9, 2013 at 1:29 PM

Why not get rid of post office and let the free market handle mail delivery? UPS and FedEx seem to be doing just fine…..

nazo311 on February 9, 2013 at 1:29 PM

Overpaid union workers with ridiculous work rules and overly generous benefits are a big part of the problem.

But also other costs and social changes have impacted. For instance, people have completely stopped writing personal letters. We still send greeting cards via the mail (not as much as we used to, though), but cheap long distance phone rates and now email have cut the only really profitable area of mail.

By the way, you can always be correct by assuming that anything Matt Yglesias says is wrong. Especially when half-wits like Mataconis jump on his bandwagon.

Adjoran on February 9, 2013 at 1:29 PM

Why should families living in single family homes get to pay the same price as those who duplexes and triplexes. Why do those renting in mega-apartments have to subsidize all those single family home living people?

Dusty on February 9, 2013 at 1:29 PM

The little post offices are also I think adding to costs. I live in a township with three villages (old New England). Each village has its own post office, all in the same suburban town. No home delivery, I have to still go get it. My post office services seven streets, your basic trick-or-treat zone. I think other than rural areas, they ought to have people go get it rather than deliver. You need home delivery for something? Ask family or have it sent FedEx.

redmama on February 9, 2013 at 1:30 PM

Having lived in rural Iowa I would say that the ‘subsidies’ for postal rural delivery are far outweighed by the subsidies for urban area mass transit (Amtrak anyone?). Let’s blame the real culprits for the Post Office budget crisis–public sector unions and outlandish pensions and healthcare.

mathgal60 on February 9, 2013 at 1:32 PM

Rural areas are mostly red..

Electrongod on February 9, 2013 at 1:37 PM

I wonder what proportion of stuff that formerly went through the mail now goes via email. Considerable, I’m certain. I wonder what proportion of junk that now comes through the mail is stuff solicited by the USPS just to keep the place semi-afloat? Also considerable, I’m certain. On any given day, I may keep 1-2 pieces of mail and sh!tcan the rest of it. Ads, flyers, insurance, credit card requests, loan refinance requests all of it—just handfuls go right in the garbage. There is little of value that is delivered anymore–at least to my mailbox.

ted c on February 9, 2013 at 1:39 PM

… pollsters say their votes don’t matter anymore either…there’s not enough of them!

KOOLAID2 on February 9, 2013 at 1:39 PM

UPS and FedEx seem to have mastered this problem…

d1carter on February 9, 2013 at 1:40 PM

Wow, the logic here is so convoluted I dare not wade in, except to say. “We’re going there anyway. ” No longer applies. Privatizing it won’t do what you think either. Just try to get a private carrier to deliver anything for under $5.00 a a package. Lol!

Bmore on February 9, 2013 at 1:40 PM

You need home delivery for something? Ask family or have it sent FedEx.

redmama on February 9, 2013 at 1:30 PM

Screw FedEx – they are a unionized cesspool, and their delivery time sucks compared to UPS, especially for international shipping. UPS all the way for me.

Archivarix on February 9, 2013 at 1:41 PM

a a

Bmore on February 9, 2013 at 1:42 PM

I live in a rural area… and maybe I’m wrong but I haven’t noticed UPS charging anything different for us.

ninjapirate on February 9, 2013 at 1:42 PM

The long term goal of environmentalists and liberals is to cram us into dense urban centers in order to reduce humanity’s footprint on the earth.

Mark1971 on February 9, 2013 at 1:15 PM

Actually they want us packed into dense urban centers because that makes us easier to control, especially if they take our cars away. It’s very VERY expensive to have a car in a place like New York City. Having a place to park it is incredibly expensive. This means we can only go where their buses and trains take us.

THAT is their dream. Also, it’s the only possible way for them to completely ditch the Constitution and rule us as subjects. If we are allowed to live where we want to, particularly in rural areas and small towns this will never BE possible because there will always be pockets of resistance in a country this huge, always places the central government will not be able to control…

wildcat72 on February 9, 2013 at 1:43 PM

Unions are part of the problem I’m sure . Our local office is a disaster of lines .
Our delivery is great though .
I’ve never lived in a ” rural ” area but we had to go to the PO to pick up the mail .
The other area we frequent today is sparsely populated most of the year and we have a
very well run ” contract ” PO and again a box . I guess I’m missing something on
this rural stuff . When you want the mail go pick it up .

Lucano on February 9, 2013 at 1:43 PM

I think we should eliminate the rural roads, because they’re too expensive on a per person basis and if City people want food they need to tramp out to the rural areas to get it right from the farmers.

Dusty on February 9, 2013 at 1:44 PM

let private companies deliver 1st class mail and the cost would be cut to less than .25 in 5 years.

chasdal on February 9, 2013 at 1:45 PM

Probably not, but if they can convince everybody that stopping Saturday mail delivery will hurt the “poor rural people” then just maybe they can get an increase in their funding. Just another gold watch being thrown in by the department and its unions.

rplat on February 9, 2013 at 1:47 PM

The only items I still prefer daily delivery for are Netflix DVDs. For all the rest once or twice a week is enough.

merlich on February 9, 2013 at 1:48 PM

While we are at it, lets also cut the subsidies to Amtrack which I have never and will never use.
Why should my tax dollars be wasted on railroads in the northeast when I live in Alabama?

1sttofight on February 9, 2013 at 1:51 PM

OT/ …anybody watching Michigan/ Wisconsin?…half court shot at the buzzer?…how rural!

KOOLAID2 on February 9, 2013 at 1:51 PM

While we are at it, lets also cut the subsidies to Amtrack which I have never and will never use.
Why should my tax dollars be wasted on railroads in the northeast when I live in Alabama?

1sttofight on February 9, 2013 at 1:51 PM

…and make Joe Biteme walk?

KOOLAID2 on February 9, 2013 at 1:53 PM

Well… duh.

That’s the whole point of the Post Office. You create a deliberate monopoly so that monopolistic rents can subsidize service to rural and other outlying areas.

The point was that the postal service served a vital national function, as it was the only dependable means of communication across distances. It served an essential role in the very foundation of a nation. If people can’t communicate with each other then how can the possibly be united as a nation needs to be?

Which is why the federal government was explicitly put in charge of it.

The question now is, in an age filled with telephones, email, and wireless/satellite communications- is universal postal service still an essential element of a nation?

I believe the answer is: No, but it will still be a nice to have for another 50 years or so.

Hence we ought to adopt significant reforms and reductions in the current postal service sufficient to maintain the system as revenue neutral for another 40 to 50 years. If this is not possible, and postal service is going to require subsidy from the general budget then we eliminate it.

Sackett on February 9, 2013 at 1:54 PM

wildcat72 on February 9, 2013 at 1:43 PM

Brave New World anyone. We rural folks will be the new zoo’s. They’ll offer sight seeing tours for the city folk to come see the one’s that won’t surrender to the blue pill.

chemman on February 9, 2013 at 1:55 PM

Wonder why private company’s can’t deliver an envelope for the same price as the USPS?

Bmore on February 9, 2013 at 1:56 PM

Hate to ask, but, is there any evidence to suggest that rural postsl subsidies are at the heart of the Post Office’s budget plight? None of these posts include a single fact or figure.

Outlander on February 9, 2013 at 1:57 PM

Hey, let’s charge rural customers more for electric, telephones and cable service too. Think of all the extra cable (and cell towers) it takes to deliver service to them.

I call foul to that argument. It sounds like something the Obama regime would do under Agenda 21.

Just cult deliveries down to 5, 4, or 3 days/week… and charge the commercial junk mailers triple.

petefrt on February 9, 2013 at 1:58 PM

Wonder why private company’s can’t deliver an envelope for the same price as the USPS?

Bmore on February 9, 2013 at 1:56 PM

They could. They don’t because, well, it’s illegal. You see, one of Franklin’s bad ideas was to make the postal service part of the Constitution. They have a legal monopoly on letter delivery.

wildcat72 on February 9, 2013 at 1:58 PM

Considering UPS charges $11 to ship a 3x1x6 .1 pound package from my house to the neighboring town, I’m questioning whether the current 46¢ postage rate is a reasonable reflection of the actual cost of sending a one ounce package.

That rate increases to $16 to ship the same package to the east coast (1,500 miles).

Stegall Tx on February 9, 2013 at 1:58 PM

Sackett

…western writer Louis L’Amour fan?
I am.

KOOLAID2 on February 9, 2013 at 2:00 PM

I think a conversation about who is subsidizing whom is a good idea when it comes to postal rates. But why not other areas? I doubt very much if this is a conversation the current regime wants to have. Because it leads straight back to the Obamaphone lady.Why is choosing not to work more socially desirable than choosing to live in a rural area?

tngmv on February 9, 2013 at 2:01 PM

Matthew Yglesias who seems to feel that government subsidy of more expensive deliveries to rural areas is part of the rot at the heart of this business model

Look, a squirrel!

The rot at the heart of this business model is the union and its pensions.

petefrt on February 9, 2013 at 2:02 PM

…once a week delivery if fine by me!
…(that will set off the lurking panfish!) (:->)

KOOLAID2 on February 9, 2013 at 2:02 PM

Snnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnail Mail

Doesn’t that say it all?

PappyD61 on February 9, 2013 at 2:03 PM

What I should have pointed out is that in some areas of some
states there are ” contract ” post offices . They’re regulated but
they don’t pay too much . From a sorting facility the bags are
trucked , dropped and sorted to individual boxes . In this case
the mail travels about 31/2 hrs . Most of the PO’s along the way
are contracted . No a bad system for a rural area .

Lucano on February 9, 2013 at 2:03 PM

wildcat72 on February 9, 2013 at 1:58 PM

So you are saying if the private company’s could they would be able to do so within a narrow margin of profit?

Bmore on February 9, 2013 at 2:04 PM

My sister rural routes for 30 years on a contract type basis.She used her own vehicle and gas.Most rural routes are like this.I never see a USPS truck in the rural areas in Texas.

docflash on February 9, 2013 at 2:06 PM

Cutting deliveries to rural areas sounds as good as making Amtrak along with all public transit systems pay for their capital expenses as well as their operating expenses….these are all great places to start…Obamaphones sounds like a good place to cut also since everyone who pays for a phone…is paying for other people’s Obamaphones….I am sure other people know of other suggestions

What about Obamacare….That will require massive subsidies making the USPS look like amateurs.

DVPTexFla on February 9, 2013 at 2:07 PM

There seems to be some blame of rural individuals for the plight of the Post Office.

There not the ones who set up the failures within the Post Office that plague it to this day. The irrationality of odd-number pricing on stamps, which added to the expense of consumers and the Office instead of streamlining using currency number easier to handle is a start.

The Post Office failures begin and end with the individuals that run the office, not from the people they service.

itsspideyman on February 9, 2013 at 2:09 PM

Jazz: Is Doug Mataconis your brother-in-law or something?

Anyway, maybe all the junk mailers could pay their fair share, no? Most of the mail I get at home is junk that never makes it past the garbage can that’s conveniently located between my mail box and the front door.

Curtiss on February 9, 2013 at 2:10 PM

A couple of nitpicks here:

- It’s not exactly 2 days between Virginia and Oregon (even suburban DC to Portland) for standard first-class mail. It’s a bit closer to a week.

- The BIG problem with USPS is that, while it has government-sized pensions, it’s being forced to fund them at private-sector percentages. Of course, the proper way to fix that, the elimination of the pensions, isn’t part of the equation because it not only is government, it’s union.

Steve Eggleston on February 9, 2013 at 2:10 PM

the United States Post Office

Sorry, Jazz, but it’s name was changed to the United States Postal Service decades ago.

itsnotaboutme on February 9, 2013 at 2:10 PM

Oh, and Matt and Doug are urban elitists of the fir..er, worst order.

Steve Eggleston on February 9, 2013 at 2:15 PM

So you are saying if the private company’s could they would be able to do so within a narrow margin of profit?

Bmore on February 9, 2013 at 2:04 PM

No, I’m saying that if you even started a private company to compete with the Postal Service in delivering letters, etc you’d be arrested.

It’s a government monopoly by law in the Constitution.

UPS, FedEx, etc, are allowed to exist because they deliver PACKAGES primarily, and their letter delivery is limited to high priority items (overnight, 2nd day air).

Even at that, companies will get shaken down by the postal service for at least SOME percentage of their delivery business. If you are big enough to be noticed the USPS will make sure it get’s it’s “cut”, because, you see, not only is it illegal to run a competing letter delivery service to them, it’s illegal to USE ONE.

wildcat72 on February 9, 2013 at 2:16 PM

No, I’m saying that if you even started a private company to compete with the Postal Service in delivering letters, etc you’d be arrested.

In fact, I believe it is illegal for any carrier but that US Postal Service to put something in your mail box. This is what a UPS driver told me.

Mark1971 on February 9, 2013 at 2:19 PM

” contract ” post offices
Lucano on February 9, 2013 at 2:03 PM

Sounds like a good way to start.

petefrt on February 9, 2013 at 2:20 PM

Some thing the ignoramuses at Hot Air could do for themselves, but won’t:

“http://www.johnstonsarchive.net/other/postage.html”>

In 1912, the cost of a first class letter in The United States was $0.02. That is $0.49 in 2012 dollars. Most of the deliveries in 1912 were RFD. Any of you geniuses know what that stands for? Come on, the letters are cheaper todan then ever. Let the USPS raise the prices.

I really appreciate you people that think restricting deliveries to one day a week is the answer. I think we should also restrict the first amendment to Thursdays. All the libruls would agree with this.

Old Country Boy on February 9, 2013 at 2:20 PM

The problem with the USPS is the same as it is with all other government or semi-government agencies. Unions.

paulus1 on February 9, 2013 at 2:20 PM

I live in a rural area. Very rural. I see FedEx and UPS pass my house nearly every day. I find it very, very, very difficult to believe rural deliveries are the root of the problem.

Trust me, if UPS and FedEx weren’t making a profit delivering to rural areas, they wouldn’t deliver to them.

I would bet the USPS delivers a lot more on a daily basis in the rural area than UPS or FedEx, so the economy of scale is on their side.

ButterflyDragon on February 9, 2013 at 1:18 PM

FedEx and UPS only have to deliver to addresses receiving packages, whereas each USPS driver has to traverse their entire route each day, picking up outgoing mail in addition to delivering mail. And I would bet that UPS and FedEx typically do lose money delivering to rural areas, they just keep their prices set at rates where the losses are minimal and are offset by deliveries to other areas–socialized, in a sense, just like the USPS. But FedEx and UPS don’t have the extravagant union-negotiated benefit/retirement packages and white-collar salaries for low-skill workers that the USPS seems to be permanently stuck with, or the requirement to visit every address in the country six days a week.

Marauder on February 9, 2013 at 2:28 PM

In fact, I believe it is illegal for any carrier but that US Postal Service to put something in your mail box. This is what a UPS driver told me.

Mark1971 on February 9, 2013 at 2:19 PM

This is correct. If a mailman finds anything in your mailbox (that isn’t USPS mail), he’s supposed to take it, postage or not.

wildcat72 on February 9, 2013 at 2:29 PM

As I said on another thread about the USPS, I worked as an RCA (rural carrier associate or sub) for awhile. The subs are the ones who do most of the Saturday deliveries. They are part time on call and do not get benefits, pensions etc. The only people really affected by this are the subs, most of whom will be let go and I don’t think this will save all that much money.

BeachBum on February 9, 2013 at 2:32 PM

It’s the freakin’ PENSIONS, people!!!

ladyingray on February 9, 2013 at 2:50 PM

I find it interesting that in one of the wealthiest enclaves in California (Rancho Santa Fe) there is no “home delivery” by the USPS, and every household MUST rent a P.O.Box at the one facility within the ZIP-code to receive their mail at (not to say that a lot of households don’t have the maid, cook, chauffeur or gardener collect the mail).
And, I am familiar with remote towns that also have no home delivery and use the same system.

Another Drew on February 9, 2013 at 2:56 PM

wildcat72 on February 9, 2013 at 2:29 PM

Mine just takes it out of the box, and throws it on the ground.

Another Drew on February 9, 2013 at 2:58 PM

Cancelling Saturday deliveries is the Post Office equivalent of closing the Washington Monument.

Another Drew on February 9, 2013 at 3:01 PM

Twofold problem.

Unionized employees with a mandate to deliver everywhere.

That’s rampant for abuse and excessive amounts of workers.

amazingmets on February 9, 2013 at 3:03 PM

Between Fed ex, e-mail,incompetent union thug employees, the post office will be selling $5.00 stamps before Fed Ex takes them over.
I have friends in Miami that can’t mail a check. It never gets there. Union post office bozos steal or lose them. they have to fed-ex or do a bank transfer, ACH. Pathetic.
The only quasi-deliver system worse than the post office is UPS.

rodguy911 on February 9, 2013 at 3:04 PM

I’ll bet that if the USPS drops Saturday delivery that the overall cost for the USPS will not go down proportionally. With the union rules they have to contend with now there will not be much cost cutting due to this elimination. The union toadies will still get paid and the number of postmen will still be the same.

inspectorudy on February 9, 2013 at 3:08 PM

It’s a government monopoly by law in the Constitution.

Article-I, Section-8, says:
The Congress shall have power … To establish Post Offices, and post Roads…

It doesn’t say that only a congressionally-established postal system shall be allowed.
Any restriction on the content placed in boxes is one that Congress has made, and can un-make.

Another Drew on February 9, 2013 at 3:08 PM

wildcat72 on February 9, 2013 at 2:16 PM

Got ya. Sorry for the slow response wildcat72, I’m in honey do land today. Lol! At any rate I think you and I are after different points pertaining to this thread. Thanks!

Bmore on February 9, 2013 at 3:11 PM

I don’t expect government services to be profitable:

I don’t expect roads maintenance to be profitable to the government;
I don’t expect bridge building to be profitable to the government;
I don’t expect police protection to be profitable to the government;
I don’t expect fire fighting to be profitable to the government;
I don’t expect the State Department to turn a profit;
I don’t expect Congress to be a profit center;
…and on and on and on.

Postal services are a legitimate, Constituted government function*. To the extent of retaining the USPS as a carrier of last resort** I do not expect it to be profitable.

* Private parcel delivery and bulk advertising are NOT government functions.
** Government notices, taxes, folks who don’t have or can’t use the internet, and the like.

ss396 on February 9, 2013 at 3:15 PM

Let’s talk about the Universal Service Fund associated with telecommunications services. Urban and suburban subscribers pay a higher phone bill so that rural subscribers can receive their phone service for a comparable fee. This has been a government policy for years. It applies equally to mail delivery. Do you really want to concentrate even more of the population in major centers so that they control all elections and all government decisions are based on the political persuasions of the coastal cities?

FSCgirl on February 9, 2013 at 3:25 PM

[Another Drew on February 9, 2013 at 3:08 PM]

Agreed. It doesn’t say anything about delivering it to your door, either. The Post Office could give everyone a PO box and everyone can pick up their mail no matter where they live. That’s a fair treatment of everyone.

Dusty on February 9, 2013 at 3:34 PM

Overpaid union workers with ridiculous work rules and overly generous benefits are a big part of the problem.

This is where the problem lies. It isn’t even so much the large salaries they pay their union workers.

The problem is that the union thugs which represent those Postal Workers got Congress to force the USPS to make overly-large payments to their pension plans. So large, in fact, that the pension needs of the union members are alrady paid up in full for the foreseeable future, and yet Congress’ laws will require another substantial payment (in the billions of dollars) here again shortly.

If you strip away that single requirement, and permit the USPS to pay only what the pensions needs to make it’s payments and remain solvent, then the USPS will be turning a profit each and every year.

The solution to the USPS money woes lies entirely within Congress’ ability to fix and has nothing to do with rural deliveries, Saturday deliveries, etc.

TKindred on February 9, 2013 at 3:39 PM

What about having deliveries in rural areas only twice a week, Wednesday and Saturday? Then continue delivering parcels as usual. It might help to close many of the newer post office branches to reduce overhead, and go back to letter boxes on street corners in urban and suburban areas.

tommytom02 on February 9, 2013 at 3:58 PM

They’re top heavy. I used to be a postmaster, I know. And that’s all I have to say bout that (in my best Forrest Gump voice).

DanaSmiles on February 9, 2013 at 3:58 PM

All of the conjecture about unions and rural delivery and all this other stuff is wrong. The main issue with the post office is the drop off in first class mail due to people switching from letters to email and paying bills online. They simply don’t have the volume of first class mail to be profitable anymore.

The bulk and drop mail you get isn’t charged anywhere near what the cost of first class is. So while you might be getting the same amount of junk mail, the post office isn’t making the same kind of money off of it. The reason for it is that when people do these mass mailings they have systems where the mailers standardize the addresses, remove UAA mail, and do the sorting for the post office. This reduces the cost of the mailing to the USPS significantly.

But you can’t do the pre-work with individual first class pieces, and there’s a huge system set up to sort and deliver first class mail, and it’s all based on economies of scale. And because the volume has dropped so much the last ten or so years, they’ve lost the scale they need to make those systems economically feasible. That’s where the problem comes from.

(I work in the postal industry but not for the USPS, all of this is apparent to everyone who does this kind of work right now.)

PetecminMd on February 9, 2013 at 4:07 PM

Every possible way in which you can charge for postage has already been tried — by the mile, postage due, flat prepay — and flat prepay won because it was the method which induced most people to use the post office rather than private competitors.

The reason the post office is a Government entity was because it was a primary method of producing revenue for the original Federal Government. Postal rates adjusted for inflation have remained relatively constant since stamps were first issued — what has happened is (a) our Government has grown in terms of its financial needs and (b) the absolute cost to the post office of delivering a letter has risen due to personnel costs such as union contracts and pensions. What used to be a temporary job on the way to something better has turned into a career itself.

I’d say that one of the few benefits that rural people get from the Federal Government for their tax dollars other than the national defense is cheap delivery of their mail. They live at the end of dirt or gravel roads, they do their own sewage, gas, and, often, electricity, and, unlike us city dwellers, none of that “last mile” is paid for by the Federal Government.

Personally, I’d rather the Feds took back postal delivery — at least we’d be using quality stamps again (the offset printing of modern stamps cannot hold a candle to the older lithographic methods — which almost made the stamps look like they were engraved)

unclesmrgol on February 9, 2013 at 4:18 PM

I am on the opposite side of many conservatives on this issue.

The postal service is an enumerated power of the federal government under the Constitution. It is a perfectly legitimate function for them to perform, unlike many other things the government does. What we need to do, though, is to stop pretending that the postal service is a private business and worrying about whether or not it turns a profit.

The specific reason we need the postal service is because universal mail delivery — even in this age of technology — is vitally important to us as a nation, but is also something which is never going to be profitable. The Jon Stewart quote, while funny, is also true. Delivery of a letter to anyone, anywhere in the nation for 46 cents is never going to be a viable model for a private business.

Many conservatives want to go to the kneejerk reaction of privatization, turning things over to the likes of FedEx and UPS. But the reason FedEx and UPS are profitable businesses is specifically because they don’t deal in regular mail. They deal in services that are profitable to them, and don’t deal in those that aren’t. A postal service can’t operate that way. It is not feasible to do away with mail delivery to low density areas, nor is it feasible to charge more if you live in a small town than if you live in a large city.

Yes, there are things that could be improved about the postal service. The union contracts are one. How they have been mandated to handle their retirement benefits is another. But no matter how much tinkering you do, it’s still going to be an unprofitable, but vital, enterprise.

No, what needs to happen is that the postal service needs to go back to being an agency of the federal government which we don’t pretend is a private business and subsidize as much as is necessary to keep it functioning well. There are plenty of areas to eliminate to get our fiscal house in order — say the roughly 5 billion programs that are not constitutionally authorized. The postal service doesn’t need to be one of them.

Shump on February 9, 2013 at 4:22 PM

Here’s the problem with the postal service: They’re damnable liars! If you pay for Priority Mail it gets handled just like First Class Mail, but they don’t tell you that. And if you ask them why does it take Priority Mail just as long as First Class Mail to get delivered, their stupid answer is because you paid for it. My brother worked for them for forty-four years and always told me how asinine the place was. Now, I find out that they’re ripping us off.

HiJack on February 9, 2013 at 4:29 PM

The reason the post office is a Government entity was because it was a primary method of producing revenue for the original Federal Government.

unclesmrgol on February 9, 2013 at 4:18 PM

I think it was more a consideration of keeping the country connected. If you have some writings from the founders on this I would be interested in them.

what has happened is …

c) Actual pieces of mail being delivered has gone down. The cost of driving the truck might have remained constant, but the number of people paying for that has decreased. It might not be the most important factor, but it is a factor.

Personally, I’d rather the Feds took back postal delivery

I agree. Just accept it as a cost of being the government. (I don’t mind pushing the price a bit higher, too.) Of course, if you eliminated all the non-Constitutional things the government is paying for, it would help a lot!

GWB on February 9, 2013 at 4:29 PM

As with all governments holding its people hostage over cost cuts (of course, we must shut down police, teachers, firefighters first before high paid consultants whose main expertise is being married to a VIP).

Look to the pensions before all else.

For what the USPS loses in delivery of letters to the boonies, imagine what they make up for it on city to city letters, or letters carrying checks to the same location (credit card bills and mortgages?) please.

joeindc44 on February 9, 2013 at 4:32 PM

I meant to finish that sentence, before cutting costs in direct services, look at the costs of running things, and to the promises made to public sector unions. I bet all the money is being soaked up in paying mailmen top dollar with great benefits and insane pensions, not the cost of running a van down through the sticks (and IIRC, from what I’ve seen, they do their mail boxes in a cluster anyway).

joeindc44 on February 9, 2013 at 4:37 PM

Lots of things here. I’m just going to launch.

I worked for 22 years for the UNITED STATES POSTAL SERVICE.

the United States Post Office
Sorry, Jazz, but it’s name was changed to the United States Postal Service decades ago.
itsnotaboutme on February 9, 2013 at 2:10 PM

Up until 1971, it was the Post Office Department, a cabinet level department. As a point of information, in 1940, half of the people employed by the Federal government worked in that department. When it became the Postal SERVICE, it became a private business controlled and run by the Federal government.

My sister rural routes for 30 years on a contract type basis.She used her own vehicle and gas.Most rural routes are like this.I never see a USPS truck in the rural areas in Texas.
docflash on February 9, 2013 at 2:06 PM (sic)

As did I. I had right-hand drive vehicles because it was far easier to service my route. I was also required to be on the job no matter what the status of my vehicle might be. For that reason, I always had to have TWO RHD vehicles. Fuel, maintenance, insurance, were all MY responsibility.

In 1997, we Rural Carriers were reimbursed $0.345 cents per mile. The routes were measured and evaluated by management, and no matter how many miles I drove, my reimbursement did not change. Many times I was required to drive down long ‘country’ driveways to deliver parcels. There was no adjustment for those extra miles. According to the USPS own documents, City delivery vehicles operated by the USPS in 1997 cost the Service $0.97 cents per mile. When I asked why the USPS allowed $0.97/per mile for City vehicles but only $0.345/per mile for Rural, I was told, “That’s the contract.” I kept meticulous records and took the deductions every year at tax time, but I still put out the extra money all year.

There seems to be some blame of rural individuals for the plight of the Post Office.
There not the ones who set up the failures within the Post Office that plague it to this day. The irrationality of odd-number pricing on stamps, which added to the expense of consumers and the Office instead of streamlining using currency number easier to handle is a start.
The Post Office failures begin and end with the individuals that run the office, not from the people they service.
itsspideyman on February 9, 2013 at 2:09 PM

True. As a Rural Carrier, I was required to provide any service a customer could get at the window in a Post Office with the exception of Registered Mail. I was also required to carry sufficient “stamp stock” to meet my customers needs. This was also out of my pocket, and due to the volume of stamps I sold, it was common for me to have $200.00 to $300.00 worth of stamps. Understand, this was an inventory I purchased. I recovered my money when customers purchased stamps, but until they did I had my money tied up in inventory.

But please note, the odd stamp pricing required me to carry change for any purchases my customers might make. Even-priced stamps would have been a blessing. But the reason we almost never had even prices was because the Board of Postal Governors would only allow a certain PER CENTAGE increase, hence, bastard prices,

A couple of nitpicks here:
- It’s not exactly 2 days between Virginia and Oregon (even suburban DC to Portland) for standard first-class mail. It’s a bit closer to a week.
- The BIG problem with USPS is that, while it has government-sized pensions, it’s being forced to fund them at private-sector percentages. Of course, the proper way to fix that, the elimination of the pensions, isn’t part of the equation because it not only is government, it’s union.
Steve Eggleston on February 9, 2013 at 2:10 PM

Letter mail is supposed to take priority, but if things get jammed up, I have seen managers decide to “curtail” first class mail. That’s a decision made by a local manager and can get them in serious trouble if they’re caught.

As to “government-sized pensions”, many people think that my wife and I winter in the Caymans or on the Greek isles. The truth is, that after 22 years, my Postal pension is just under $800.00/month, and almost$600.00 of that goes for my supplemental health insurance. At 65, I’ve had to take a full time job to stay afloat.

Unions? Yeah, the Rural Carriers have one, as do the City Carriers, the Post Office Clerks, the clerks who work in the mail processing facilities, and Postal Management. You read that right, Management has a union. A clerk once told me the USPS had five different unions, all competing to be the “ruling class”.

Many of the problems can be traced back to the decision of the Carter administration to promote based on quotas. (The post office was one of the most discriminatory organizations in the country. At one time, you could not be hired by the PO if you were left-handed.) During the Carter administration, it was decided that eliminating hiring discrimination wasn’t enough. People had to not only be hired based on skin color, they also had to had to be promoted on the basis of skin color to have a more “balanced” work force. Sadly, this meant that people were promoted with total disregard of experience, education, competence, or ability. It also meant that it was common practice to pay two people to do the job of one. It’s as if a private company decided to pay two people to perform one task, which of course doubled labor costs.

In fact, I believe it is illegal for any carrier but that US Postal Service to put something in your mail box. This is what a UPS driver told me.
Mark1971 on February 9, 2013 at 2:19 PM

You’re correct. We were instructed to take anything back to the office that was in or ON the mail box that had no postage. Management loved to find any kind of ‘flyer’ in or on customer’s boxes. All we needed do was retrieve three pieces on our route, take them back to the office and turn them into a manager. Once we did that, the PO could then look at the total box count of the route (mine was typically 530 to 560 boxes), figure out what the cost would have been if those 500+ pieces had been mailed first class and bill the company that placed them in/on the box. If the company failed to pay, management could then suspend delivery to the company indefinitely. (My daughter once placed Vacation Bible School flyers in neighborhood boxes when she was seven. Rather than tell me, our carrier took them back to a manager and billed our church. Just like she was supposed to.)

In 1912, the cost of a first class letter in The United States was $0.02. That is $0.49 in 2012 dollars. Most of the deliveries in 1912 were RFD. Any of you geniuses know what that stands for? Come on, the letters are cheaper todan then ever. Let the USPS raise the prices.
Old Country Boy on February 9, 2013 at 2:20 PM

RFD stood for Rural Free Delivery

This is correct. If a mailman finds anything in your mailbox (that isn’t USPS mail), he’s supposed to take it, postage or not.
wildcat72 on February 9, 2013 at 2:29 PM

See above response.

As a final thought-
Two incidents should stand out in your memories.
First, the USPS was an official sponsor of Lance Armstrong. One year, a large group of high-ranking Postal officials decided to go to Paris to support Armstrong. There were as I recall about 40-50 people and some “spouses” all of whom flew from DC to Paris on the Concorde, and once they arrived in Paris all stayed in suites in five-star hotels. For about a week.

Second, you may never have seen the city collection boxes. There were only 200 nation-wide. But the USPS had 200 collection boxes painted to look like R2D2, the short robot from Star Wars. The reason was to try to interest children in writing letters. The boxes didn’t last long, they were pulled back and re-painted in the standard postal colors. I asked management how much the USPS paid Spielberg for the rights to use the R2D2 likeness. No one ever told me.

oldleprechaun on February 9, 2013 at 4:57 PM

Help me out here.
It’s something which is mandated by the Constitution

“Mandated by the Constitution???”

I read the Constitution. I didn’t see anything that the Founding Fathers specifically directed a mail delivery service.

Congressionally Mandated, as part of the general good/welfare clause I can accept, but “Constitutionally?”

That smacks of the overwrought hyperbole we are forever accusing the Progs of.

YTZGal on February 9, 2013 at 5:08 PM

It’s a government monopoly by law in the Constitution.

Article-I, Section-8, says:
The Congress shall have power … To establish Post Offices, and post Roads…

It doesn’t say that only a congressionally-established postal system shall be allowed.
Any restriction on the content placed in boxes is one that Congress has made, and can un-make.

Another Drew on February 9, 2013 at 3:08 PM

Thank you, Another Drew.
“shall have the power” is NOT the same as a “mandate”.
And nothing says it has to be formed in its current (untenable) organization.

It’s one of those things dearly beloved by the Left that they feel can never be dismantled and/or changed.

YTZGal on February 9, 2013 at 5:21 PM

Congressionally Mandated, as part of the general good/welfare clause I can accept, but “Constitutionally?”

YTZGal on February 9, 2013 at 5:08 PM

Article 1, Section 8, paragraph 7:

To establish Post Offices and post Roads;

It’s right in between punishing counterfeiters and awarding patents.

GWB on February 9, 2013 at 5:23 PM

Rural delivery isn’t the problem. The USPS has offered rural delivery since 1775 and it hasn’t been a problem. The postal union’s commercial explains the problem nicely. Yes, a law was passed in 2006 that actually requires the USPS to fund their pension obligations to the tune of $5B+/yr.

While rural delivery isn’t as profitable as urban the issues facing the post office have more to do with fiscal accountability, changing technology (email, facebook, twitter, etc.) and being slow to adjust to changing demographics.

Come and take it on February 9, 2013 at 5:31 PM

UPS prices its delivery services in much the same manner.

That right there betrayed the general ignorance of the author. Yes, UPS prices delivery to different areas based upon distance, but not charge a different amount for a delivery in the city of Denver than a deliver 30 miles east in the country. The cost difference they charge is based on the distance travelled from the origin of the package, not density of the population where the package is destined.

AZfederalist on February 9, 2013 at 5:35 PM

Enumerating a power to establish Post offices and Post roads, does not mean there has to be a “mandate” in place.

Congress could just as easily fully privatize and/or subcontract that “power” just as they have outsourced any other type of work that was previously performed by federal civil servants.

Calling it a “mandate” implies that there can be no major reform or way at looking at the issue.

Going back through the history of the USPS, it is clear it has always been rife with patronage, self-serving interests (ie: newspaper editors who lobbied to be charged below-market rates), and that the range of services has varied widely over its history.

FWIW, the term “post roads” referred to the roads that connected the major hubs which had post offices. Service to every home, no matter how remote, has not been part of the “mandate” but evolved as the legislation guiding the terms of service for the USPS changed.

And it annoys me that the USPS continues to claim that they are “independent” and don’t rely on taxpayer funds. I guess I must have imagined all those “urgent” USPS bailouts.

I would prefer to “opt out” of USPS service entirely. It’s wasteful, antiquated, and the unsolicited junk mail we are “mandated” to accept in our delivery boxes is beyond annoying.

YTZGal on February 9, 2013 at 5:39 PM

Screw FedEx – they are a unionized cesspool, and their delivery time sucks compared to UPS, especially for international shipping. UPS all the way for me.

Archivarix on February 9, 2013 at 1:41 PM

You’ve got that backwards. FedEx is the non union carrier and UPS is the union slaves. You can Google it there’s plenty of info on it. The lefties really got their dander up over it. FedEx founder Fred Smith is also a conservative/libertarian guy.

Big Orange on February 9, 2013 at 5:40 PM

Article 1, Section 8, paragraph 7:

To establish Post Offices and post Roads;

It’s right in between punishing counterfeiters and awarding patents.

GWB on February 9, 2013 at 5:23 PM

lol GWB.
Yes, I saw that.
I just don’t interpet “power to establish…” as specifically a mandate and all that that word implies.

YTZGal on February 9, 2013 at 5:42 PM

oldleprechaun on February 9, 2013 at 4:57 PM

Wow. You guys deserve more than you get. Way back, I had a job offer of an appointment which I declined. I had 115 or 130 points, can’t remember. Thank God for an ambitious spouse.

You are the third source I heard that cited affirmative action under Carter as a real problem in the Service. Now I have been assured that the normal run of management there could well mess up a one car funeral. There are also some good minority workers there. I just saw one.

I also heard that the normal van type vehicles we see everywhere can cost an independent operator upwards of $30K and they come or came in four wheel drive.

One low level guy said that UPS and FEDEX both just drop junk in the USPS system if they don’t want to handle it. He said that exhaust systems, poles, sacks of glass and other junk were often put in their lap. Is that true?

The other comment I heard from numerous sources was that the congress takes money from the USPS’s competitors and industries who parasitically use the system for junk mail and a host of other things.

Thanks for your service to our country.

IlikedAUH2O on February 9, 2013 at 5:44 PM

Shump on February 9, 2013 at 4:22 PM

Very well said. Indeed.

GWB on February 9, 2013 at 5:49 PM

lol GWB.
Yes, I saw that.

YTZGal on February 9, 2013 at 5:42 PM

Point taken. I hadn’t seen your other post.

GWB on February 9, 2013 at 5:53 PM

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