Stamp Out The U.S. Postal Service?
Life as we know it — the institutions we take for granted — are they doomed? Does it matter? Big news out of the Postal Service this week is that it will default on a $5.5 billion payment due the end of this month, on September 30, unless Congress comes to the rescue. What's the payment supposed to cover? You guessed it, retirees future
health care coverage.
The Obama administration is proposing to give the Service an extra three months to make the payment. And what will that do? Delay the inevitable without a long-term solution. Postmaster General, Patrick R. Donahoe, testifying at a Senate hearing said that even with a three-month delay, the post office will probably run out of cash and face a shutdown next July or August without a long-term solution.
The U.S. Postal Service is a semi-independent federal agency, mandated to be revenue-neutral. In other words, it is supposed to break even and not make a profit. Breaking even would be good news. It has been years since this outdated, overgrown monopoly showed a decent balance sheet and the experts say it will continue to get worse —to a projected $10 billion deficit this year and a whopping $238 billion deficit by 2020.
About 700,000 are employed by the USPS in the United States. The average age is 53 and retirement can begin at age 55. Benefits vary a little depending on the number of years a retiree has been with the service. For example, take total length of service, subtract 2, and then multiply by 2. Use the result as a percentage of 90 percent of the
annual salary. An employee with 34 years of service and a final salary of $50,000 a year receives about $2400 a month. This is in addition to qualifying for Social Security benefits..
About 10,000 carriers retire each year adding to the proposed deficit. Another case of benefit packages that can't be sustained as more and more workers retire. Why didn't someone in government figure this out years ago when all those union contracts were signed, dooming the security of those who were supposed to benefit?
So Is anything actually being done to save the Postal Service? Can anything be done? And why does Congress continue to fiddle while the Postal Service burns? Perhaps because adding to unemployment numbers now is political suicide. According to Fox News, the Postal Service wants to lay off about 120,000 workers but Congress needs to pass a law that nullifies a contract prohibition on layoffs.
In addition to the lay offs, Mr. Donahoe has proposed eliminating Saturday delivery, and closing up to 3,700 postal locations. But wait a minute! It is now September 2011. Remember all the whoopla in early 2010 when the Postal Service said it wanted to end Saturday delivery by early this year? That was projected to save an estimated $3.3 billion annually and approximately $5.1 billion by 2020. This plan would also eliminate 49,000 full and part time jobs.
According to a 2009 Gallop poll, 66 percent of us agree that it would be OK to end Saturday delivery. Time flies! And the President finally endorsed the idea in September 2011. Johnny-come-lately, again.
Donahoe has some good proposals, like pulling out of the Federal retirement plan and starting a new one. The sticky-wicket is that he is powerless without the OK and action by a do-nothing Congress. He needs to be given the power to make some decisions and like any CEO, if he fails, he goes.
There's a more recent recommendation out there — to reduce overall mail services for you and me, perhaps taking longer to get mail from here to there? That proposal last month is the result of a study commissioned by the Postal Service inspector general and prepared by Christensen Associates. Instead of your first class mail arriving in one to three days, it would take four. In fact everything would take a day longer. Does it really matter?
Regarding that study, the Office of the Inspector General referred us to their July 6 report that indicates some companies would prefer consistency and predictability over speed. How can this be true for a majority of companies when the total number of companies interviewed is only 27. And, the report doesn't indicate the type of business, just the mail categories they were queried about. When asked what geo locations these 27 companies were in, we were told “all over the country.”
I thought that the minimum number to canvas for a fair sampling should be at least 200. In this case, the numbers in each of the sampled categories are surprisingly small – companies interviewed using First-Class Mail 5, Periodicals 5, Standard Mail 4, Package Services 3, Priority Mail/Parcel Select 1, Consolidator/Logistic Providers 5, Other 4 (Competitors, Paper & Envelope Manufacturing, Remittance Mail, etc.) The problem with these numbers is easily understood if you take note that the mailing industry alone employs more than 8,000,000 people and is over a $ trillion. Only 4 companies in this category were questioned nationwide.
According to the Christensen study and based on the responses of 27 companies, this would cut about $336 million in pay for employees working overnight and overtime to meet current delivery schedules. It would also save an additional $1.1 billion by delivering some priority-mail by ground instead of air, consolidating facilities and by
requiring fewer postal workers.
These savings are a drop in the bucket compared to that 2010 no Saturday delivery recommendation. If that had been started at the beginning of this year, the Service would save by the end of this year, $3.3 billion.
What about never sold stamps? The Postal Service destroys billions of stamps each year because they are obsolete. In 2008, the Service printed 37 billion stamps, which cost $78 million to print. In that same year, they destroyed old stamps, that were valued at approximately $2.8 billion. Read more at the Office of the Inspector
General's blog.
If you know anything about printing, it costs less to print more of one kind of stamp than it does to print a lot of different stamps. Do we really need stamps commemorating movies including Toy Story, Up, Wall-E, Ratatouille, and Cars? Nice movies but I really don't care if my letter to Aunt Ellen in Florida promotes Cars. And then there are Go Green stamps reminding us of how to be more green, tributes to people I never heard of like a Purto Rican poet and so many others.
If we must have different stamps, lets stick with the American flag, traditional American holidays like the Fourth of July and special places like Mt. Rushmore and the Statue of Liberty. Forget the picture of a wedding cake and a neon graphic that says "celebrate".
For collectors, maybe one or two very special stamps a year would be enough like a tribute to 9/11.
According to the Postal Service, during the past five years mail volume has declined by 43.1 billion pieces; and consumer visits to post office locations have declined by 200 million. Retail transactions have declined by $2 billion. Reduced mail volume includes First-Class Mail, which has dropped by 50 percent over the past 10 years.
And then there’s the question, “Why didn’t the Postal Service become inventive when online bill pay and e-mail started replacing snail mail in the 90’s?” Maybe a functioning on-line postal service way back when would have reduced costs with some on-line services being provided as options to regular mail, such as registered and certified services. What about Internet bill paying through the Postal Service with something similar to PayPal? What about a postal service that took periodicals and published them on-line for those who preferred digital access? If a digital post office had been started at least ten years ago, by now one would logically conclude that the digital post office could be thriving.
It is interesting that the Postal Service is finally looking at the digital revolution as revealed in two white papers, Part 1 dated February of this year. Then, Part 2 dated April 19, 2011. This is White Paper RARC-WP-11-003, dealing with expanding the Postal Service Platform in the digital age. I particularly noted one sentence, “The Postal
Service should consider new products and services . . . “ Better late than never.
Then perhaps we can all avoid that occasional trip to the post office. We've all had experiences like "A Day at the Post Office". detailed at NetAdvisor.org, a web site worth noting.
Read the Posral Service white papers and other documents online at the Postal Service Reading Room.
It appears that one of the concerns of government is that “the Internet and all its functions are not available to ALL citizens.” Well, what about offering more convenient, less costly OPTIONS to the millions who are already using the Internet? Offer a better mousetrap and those with Internet access will use it. An estimated 239,893,600 people
or 77% of those in the U.S. use the Internet. Neilsen states that by the end of this year, 1 in 2 Americans will have smart phones and those are also links to the Internet. The key words when it comes to digital Postal Services are “options” and “choices”.
If you adopt the theory that everyone has to have access to everything, then have the government (the taxpayers) give car-less people cars.
It would be a mistake not to mention Postal Service executive salaries at a time when record short falls exist. Being billions of dollars in the hole for years hasn’t prevented increases for key postal executives. Benjamin Franklin, the first Postmaster General, is probably rolling over. Today’s Postmaster General’s compensation has enjoyed at least a 40% increase in pay since 2006. And in 2008, compensation, including salary and retirement benefits, came to more than $800.000 and is the second highest paid U.S. government official salary next to the President.
The Deputy Postmaster General receives a salary of $276,840, which is more than the Country’s Vice-President’s salary listed as $230,700. The deputy’s total compensation is estimated at over half a million dollars. The rationale for postal executive salary increases seems to be the comparison to comparable private sector positions. For example, the head of Federal Express, who makes millions, but what the Postal Service seems to ignore is that Federal Express is profitable.
I also find it interesting that the Service has been using the same economic consulting firm for thirty years. Christensen Associates began working with the Postal Service in 1981 and claims that through their long standing relationship, they have “become experts in understanding and analyzing the ever-changing issues in a highly dynamic communications market.”
So what’s the hang up in getting something done? Is it a lack of bold new recommendations from advisors and consultants? Is Congress the political sticky wicket? Is it the Postal Regulatory Commission? Is it another example of government’s love of research and reports and committees and proposals and hearings and studies and delays and busy work? Is it the union? Probably all of the above.
Stamp out the U.S. Postal Service? Personally, I hope this age-old institution figures out how to survive and thrive. But if it doesn’t, some bold thinking, innovative, entrepreneur will come along and create the next concept of mail in the United States....if entrepreneurs still have the freedom to start a business and succeed.
health care coverage.
The Obama administration is proposing to give the Service an extra three months to make the payment. And what will that do? Delay the inevitable without a long-term solution. Postmaster General, Patrick R. Donahoe, testifying at a Senate hearing said that even with a three-month delay, the post office will probably run out of cash and face a shutdown next July or August without a long-term solution.
The U.S. Postal Service is a semi-independent federal agency, mandated to be revenue-neutral. In other words, it is supposed to break even and not make a profit. Breaking even would be good news. It has been years since this outdated, overgrown monopoly showed a decent balance sheet and the experts say it will continue to get worse —to a projected $10 billion deficit this year and a whopping $238 billion deficit by 2020.
About 700,000 are employed by the USPS in the United States. The average age is 53 and retirement can begin at age 55. Benefits vary a little depending on the number of years a retiree has been with the service. For example, take total length of service, subtract 2, and then multiply by 2. Use the result as a percentage of 90 percent of the
annual salary. An employee with 34 years of service and a final salary of $50,000 a year receives about $2400 a month. This is in addition to qualifying for Social Security benefits..
About 10,000 carriers retire each year adding to the proposed deficit. Another case of benefit packages that can't be sustained as more and more workers retire. Why didn't someone in government figure this out years ago when all those union contracts were signed, dooming the security of those who were supposed to benefit?
So Is anything actually being done to save the Postal Service? Can anything be done? And why does Congress continue to fiddle while the Postal Service burns? Perhaps because adding to unemployment numbers now is political suicide. According to Fox News, the Postal Service wants to lay off about 120,000 workers but Congress needs to pass a law that nullifies a contract prohibition on layoffs.
In addition to the lay offs, Mr. Donahoe has proposed eliminating Saturday delivery, and closing up to 3,700 postal locations. But wait a minute! It is now September 2011. Remember all the whoopla in early 2010 when the Postal Service said it wanted to end Saturday delivery by early this year? That was projected to save an estimated $3.3 billion annually and approximately $5.1 billion by 2020. This plan would also eliminate 49,000 full and part time jobs.
According to a 2009 Gallop poll, 66 percent of us agree that it would be OK to end Saturday delivery. Time flies! And the President finally endorsed the idea in September 2011. Johnny-come-lately, again.
Donahoe has some good proposals, like pulling out of the Federal retirement plan and starting a new one. The sticky-wicket is that he is powerless without the OK and action by a do-nothing Congress. He needs to be given the power to make some decisions and like any CEO, if he fails, he goes.
There's a more recent recommendation out there — to reduce overall mail services for you and me, perhaps taking longer to get mail from here to there? That proposal last month is the result of a study commissioned by the Postal Service inspector general and prepared by Christensen Associates. Instead of your first class mail arriving in one to three days, it would take four. In fact everything would take a day longer. Does it really matter?
Regarding that study, the Office of the Inspector General referred us to their July 6 report that indicates some companies would prefer consistency and predictability over speed. How can this be true for a majority of companies when the total number of companies interviewed is only 27. And, the report doesn't indicate the type of business, just the mail categories they were queried about. When asked what geo locations these 27 companies were in, we were told “all over the country.”
I thought that the minimum number to canvas for a fair sampling should be at least 200. In this case, the numbers in each of the sampled categories are surprisingly small – companies interviewed using First-Class Mail 5, Periodicals 5, Standard Mail 4, Package Services 3, Priority Mail/Parcel Select 1, Consolidator/Logistic Providers 5, Other 4 (Competitors, Paper & Envelope Manufacturing, Remittance Mail, etc.) The problem with these numbers is easily understood if you take note that the mailing industry alone employs more than 8,000,000 people and is over a $ trillion. Only 4 companies in this category were questioned nationwide.
According to the Christensen study and based on the responses of 27 companies, this would cut about $336 million in pay for employees working overnight and overtime to meet current delivery schedules. It would also save an additional $1.1 billion by delivering some priority-mail by ground instead of air, consolidating facilities and by
requiring fewer postal workers.
These savings are a drop in the bucket compared to that 2010 no Saturday delivery recommendation. If that had been started at the beginning of this year, the Service would save by the end of this year, $3.3 billion.
What about never sold stamps? The Postal Service destroys billions of stamps each year because they are obsolete. In 2008, the Service printed 37 billion stamps, which cost $78 million to print. In that same year, they destroyed old stamps, that were valued at approximately $2.8 billion. Read more at the Office of the Inspector
General's blog.
If you know anything about printing, it costs less to print more of one kind of stamp than it does to print a lot of different stamps. Do we really need stamps commemorating movies including Toy Story, Up, Wall-E, Ratatouille, and Cars? Nice movies but I really don't care if my letter to Aunt Ellen in Florida promotes Cars. And then there are Go Green stamps reminding us of how to be more green, tributes to people I never heard of like a Purto Rican poet and so many others.
If we must have different stamps, lets stick with the American flag, traditional American holidays like the Fourth of July and special places like Mt. Rushmore and the Statue of Liberty. Forget the picture of a wedding cake and a neon graphic that says "celebrate".
For collectors, maybe one or two very special stamps a year would be enough like a tribute to 9/11.
According to the Postal Service, during the past five years mail volume has declined by 43.1 billion pieces; and consumer visits to post office locations have declined by 200 million. Retail transactions have declined by $2 billion. Reduced mail volume includes First-Class Mail, which has dropped by 50 percent over the past 10 years.
And then there’s the question, “Why didn’t the Postal Service become inventive when online bill pay and e-mail started replacing snail mail in the 90’s?” Maybe a functioning on-line postal service way back when would have reduced costs with some on-line services being provided as options to regular mail, such as registered and certified services. What about Internet bill paying through the Postal Service with something similar to PayPal? What about a postal service that took periodicals and published them on-line for those who preferred digital access? If a digital post office had been started at least ten years ago, by now one would logically conclude that the digital post office could be thriving.
It is interesting that the Postal Service is finally looking at the digital revolution as revealed in two white papers, Part 1 dated February of this year. Then, Part 2 dated April 19, 2011. This is White Paper RARC-WP-11-003, dealing with expanding the Postal Service Platform in the digital age. I particularly noted one sentence, “The Postal
Service should consider new products and services . . . “ Better late than never.
Then perhaps we can all avoid that occasional trip to the post office. We've all had experiences like "A Day at the Post Office". detailed at NetAdvisor.org, a web site worth noting.
Read the Posral Service white papers and other documents online at the Postal Service Reading Room.
It appears that one of the concerns of government is that “the Internet and all its functions are not available to ALL citizens.” Well, what about offering more convenient, less costly OPTIONS to the millions who are already using the Internet? Offer a better mousetrap and those with Internet access will use it. An estimated 239,893,600 people
or 77% of those in the U.S. use the Internet. Neilsen states that by the end of this year, 1 in 2 Americans will have smart phones and those are also links to the Internet. The key words when it comes to digital Postal Services are “options” and “choices”.
If you adopt the theory that everyone has to have access to everything, then have the government (the taxpayers) give car-less people cars.
It would be a mistake not to mention Postal Service executive salaries at a time when record short falls exist. Being billions of dollars in the hole for years hasn’t prevented increases for key postal executives. Benjamin Franklin, the first Postmaster General, is probably rolling over. Today’s Postmaster General’s compensation has enjoyed at least a 40% increase in pay since 2006. And in 2008, compensation, including salary and retirement benefits, came to more than $800.000 and is the second highest paid U.S. government official salary next to the President.
The Deputy Postmaster General receives a salary of $276,840, which is more than the Country’s Vice-President’s salary listed as $230,700. The deputy’s total compensation is estimated at over half a million dollars. The rationale for postal executive salary increases seems to be the comparison to comparable private sector positions. For example, the head of Federal Express, who makes millions, but what the Postal Service seems to ignore is that Federal Express is profitable.
I also find it interesting that the Service has been using the same economic consulting firm for thirty years. Christensen Associates began working with the Postal Service in 1981 and claims that through their long standing relationship, they have “become experts in understanding and analyzing the ever-changing issues in a highly dynamic communications market.”
So what’s the hang up in getting something done? Is it a lack of bold new recommendations from advisors and consultants? Is Congress the political sticky wicket? Is it the Postal Regulatory Commission? Is it another example of government’s love of research and reports and committees and proposals and hearings and studies and delays and busy work? Is it the union? Probably all of the above.
Stamp out the U.S. Postal Service? Personally, I hope this age-old institution figures out how to survive and thrive. But if it doesn’t, some bold thinking, innovative, entrepreneur will come along and create the next concept of mail in the United States....if entrepreneurs still have the freedom to start a business and succeed.
© 2011 GrassrootsAnnie.com
All rights reserved.
For permission to reprint this article, e-mail Annie@GrassrootsAnnie.com
Posted by Grass Roots Annie at 9/9/2011 6:02 PM 
Categories: News - Your Views
Tags: postal service default 5.5 billion due sep 30th saturday mail delivery post office service cutbacks postmaster general stamps postage
Categories: News - Your Views
Tags: postal service default 5.5 billion due sep 30th saturday mail delivery post office service cutbacks postmaster general stamps postage
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