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Old 09-08-2011, 09:51 AM   #61
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Well, here's the thing: They've kept places like that (tiny, underutilized places serving a very small population) open since the very beginnings of the USPS and it has never caused repeated financial crises until the last couple of decades. So maybe there's a different root cause to the problem?

There's one such PO in our county, in a very small town (population about 100) that will be holding "public hearings" as publicized in the local paper. Presumably that one may be on the chopping block.

The root cause is that revenue is going down and not expenses...

Now, what do you do about it

Raise the cost of a stamp again and get more people off mail...

Or reduce expenses to the size of your revenue....

Most people are voting for #2.... so then what expenses do you cut

To me it is a no brainer to cut the post offices that are very underutilized such as some mentioned.... but like the federal budget that will not close the gap, so people will have to be let go or benefits will have to be reduced.... which will be hard to do... and productivity will have to increase, which will also be hard to do....

If the UPS was a private company, probably all of these things would happen and quickly... but it is likely that nothing major will happen and we will bail it out and it will slog along for a few more years until it need another bail out....
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Old 09-08-2011, 10:00 AM   #62
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The fact is the USPS has been in a death spiral for years and it is now reaching the end game. Even with major layoffs and PO closings the govt. will have to step in to prop it up (no comment on the politics here) or it will go under.
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Old 09-08-2011, 10:30 AM   #63
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The fact is the USPS has been in a death spiral for years and it is now reaching the end game. Even with major layoffs and PO closings the govt. will have to step in to prop it up (no comment on the politics here) or it will go under.
+1

I don't think delivering mail one or two less days will be the solution. What would happen say for instance to the daily newspapers that are delivered via USPS? My Wall Street Journal comes that way. Anything else delivered daily that might create an issue for other companies?

Would be interesting to see but I'd wager a guess that it is salaries and benefits that are breaking the back of the USPS. From a quick look, starting salary for a carrier is more than a starting salary for a teacher in most locations...here in Va. anyway.

Bothers me a bit....that the USPS would consider reducing services before they take strong measures to reduce their "other" overhead. But perhaps they ARE also looking at that.

While I know it is unpopular, it just seems government workers at all levels are going to have to start contributing more for their benefits ...just like the private sector has from day one. Goes along with the mantra...that "everyone is going to have to share in this pain".
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Old 09-08-2011, 10:35 AM   #64
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While I know it is unpopular, it just seems government workers at all levels are going to have to start contributing more for their benefits ...just like the private sector has from day one. Goes along with the mantra...that "everyone is going to have to share in this pain".
I do think the private sector can, in the long term, only afford public sector wages and benefits that the private sector worker is able to keep up with. (I'd like to think there are other options than having everyone share a race to the bottom, though).

Having said that, in *this* case I think that's a side issue.

The main issue in *this* case is simply that the USPS is a service that is providing an increasingly obsolete product. You could immediately cut the workforce, freeze the pensions and stop retiree health insurance and you'd be okay for a little while... but the same forces of obsolescence would, in this case, come back in a few years. The service needs to either reinvent itself to become relevant in 21st Century communications or accept that it's dying.
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Old 09-08-2011, 10:51 AM   #65
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The main issue in *this* case is simply that the USPS is a service that is providing an increasingly obsolete product.
This is precisely the problem and the gov't has propped up the USPS financially for far too long. I agree that cutting PO hours, workers, and benefits will only slightly affect the situation, and won't solve the problem. The USPS needs to be dismantled, and it's assets sold. Let private companies take over the "mail"
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Old 09-08-2011, 10:57 AM   #66
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This is precisely the problem and the gov't has propped up the USPS financially for far too long.
Is that the case? I thought the USPS became an independent, non-taxpayer supported entity back in the late 50's 70's.
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Old 09-08-2011, 10:58 AM   #67
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I do think the private sector can, in the long term, only afford public sector wages and benefits that the private sector worker is able to keep up with. (I'd like to think there are other options than having everyone share a race to the bottom, though).

Having said that, in *this* case I think that's a side issue.

The main issue in *this* case is simply that the USPS is a service that is providing an increasingly obsolete product. You could immediately cut the workforce, freeze the pensions and stop retiree health insurance and you'd be okay for a little while... but the same forces of obsolescence would, in this case, come back in a few years. The service needs to either reinvent itself to become relevant in 21st Century communications or accept that it's dying.
All that real estate and labor and no real ability to offer additional products or services that have greater value add.
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Old 09-08-2011, 11:01 AM   #68
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Is that the case? I thought the USPS became an independent, non-taxpayer supported entity back in the late 50's 70's.

Was it that far back


Oppps.... see a correction when I quoted you....
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Old 09-08-2011, 11:05 AM   #69
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I disagree a bit... sure, the business is dying over time, but it is not like it is not a service we do not need... just that we need it less..

This is from memory, so it could be off... but the largest industry in New England back in the late 1800s was the shipping ice to other locations... that industry dies with new technology... the buggy whip industry is dead... because of new technology.... I still see the need for someone to deliver 'mail' or 'stuff' to us.. maybe the cost will go up... but we still need the service.
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Old 09-08-2011, 12:03 PM   #70
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Is that the case? I thought the USPS became an independent, non-taxpayer supported entity back in the late 50's 70's.
I did a little research and you are essentially correct - wikipedia mentions that it has not received Tax payer dollars since the early 1980's with the exception of subsidies.... I don't know the extent of the subsidies given by the fed gov't, but i have a gut feeling that they are in the millions of $.

And I can not foresee how the USPS is to "pay off" their billions of deficit with decreasing revenues without a lot of financial help from Uncle Sam.
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Old 09-08-2011, 12:17 PM   #71
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And I can not foresee how the USPS is to "pay off" their billions of deficit with decreasing revenues without a lot of financial help from Uncle Sam.
They can probably start by selling off excess assets. Or, at the very least, selling them to the federal government by giving Uncle Sam equivalent property value for the financial assistance they are seeking. I don't know what the feds would do with these assets immediately, but they'd have them in case they needed them in the future, or they could sell some of them off to private entities (and that would let local governments collect property taxes if nothing else).

One of the leverage points Uncle Sam had with private sector bailouts to get paid back -- no big executive bonuses until you pay us back -- isn't really in play here.
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Old 09-08-2011, 12:23 PM   #72
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Is that the case? I thought the USPS became an independent, non-taxpayer supported entity back in the late 50's 70's.
A quick look says your are right REWahoo....except it is 80's rather than 70's..according to Wiki...

The USPS has not directly received taxpayer-dollars since the early 1980s with the minor exception of subsidies for costs associated with the disabled and overseas voters. Revenue has been in freefall due to declining mail volume.[3] The postal service has attempted to look to other sources of revenue while cutting costs to reduce its budget deficit.

ooppss see than Ronstar beat me to this !

And I sort of agree with TexasProud's statement:

"I disagree a bit... sure, the business is dying over time, but it is not like it is not a service we do not need... just that we need it less.."


Maybe they should only deliver junk mail once a week instead of every day. But then they would have to store it...which could present space problems. Still don't think this would help...as the same labor hours are required regardless of delivery times...right?

Thinking out loud: We could have a national "do not deliver junk mail" data base....similar to the national "do not call list". Of course ..If it was done at the point of the marketers...it might take more revenue from the USPS.
What other consequences??
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Old 09-08-2011, 12:27 PM   #73
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They can probably start by selling off excess assets. Or, at the very least, selling them to the federal government by giving Uncle Sam equivalent property value for the financial assistance they are seeking. I don't know what the feds would do with these assets immediately, but they'd have them in case they needed them in the future, or they could sell some of them off to private entities (and that would let local governments collect property taxes if nothing else).

One of the leverage points Uncle Sam had with private sector bailouts to get paid back -- no big executive bonuses until you pay us back -- isn't really in play here.
I was thinking of the possibility of selling off PO buildings when I went in to my local one last week. An older building - ornate trim, marble? floors, prime location. I would think that many PO's are similar, and would make great private office buildings.
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Old 09-08-2011, 02:13 PM   #74
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Well, here's the thing: They've kept places like that (tiny, underutilized places serving a very small population) open since the very beginnings of the USPS and it has never caused repeated financial crises until the last couple of decades. So maybe there's a different root cause to the problem?

There's one such PO in our county, in a very small town (population about 100) that will be holding "public hearings" as publicized in the local paper. Presumably that one may be on the chopping block.
The difference is that the USPS actually made money to a break even level, and never really lost any, until several years ago when it was required to make huge deposits for their retirement plan, and was able to subsidize all those underutilized post offices. If you take away the now required deposits, they are a lot closer to break even, but they can't deal with the loss in mail without cutting people and locations. Not even close in the coming years.
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Old 09-08-2011, 04:18 PM   #75
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The difference is that the USPS actually made money to a break even level, and never really lost any, until several years ago when it was required to make huge deposits for their retirement plan, and was able to subsidize all those underutilized post offices. If you take away the now required deposits, they are a lot closer to break even, but they can't deal with the loss in mail without cutting people and locations. Not even close in the coming years.

But I think they should be making deposits to pay for accrued benefits... look at the states that have not made big enough contributions to their plans and you see what happens when the payments get to big to fund with current revenue...
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Old 09-08-2011, 04:42 PM   #76
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Junk mail is their primary source of revenue. Less of that means more problems for the post office, and eventually, us.

Pension and retirement funding is not optional. Just because others do not fund their obligations is no reason for the post office not too.

The USPS is obligated to incur high cost low productivity operations in the name of the public good. Nothing wrong with that, and also nothing wrong with paying a living wage. But they need to be able to move into value add services. For example, money transfers.
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Old 09-08-2011, 05:15 PM   #77
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The USPS is obligated to incur high cost low productivity operations in the name of the public good. Nothing wrong with that, and also nothing wrong with paying a living wage. But they need to be able to move into value add services. For example, money transfers.
I would love to see them reinvent themselves to become more relevant to the 21st century. I'm not sure how you expand into other "higher tech" segments without complaints from the private sector that they are being forced to compete with a (quasi-) government agency.
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Old 09-08-2011, 06:05 PM   #78
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I disagree a bit... sure, the business is dying over time, but it is not like it is not a service we do not need... just that we need it less...
You can mail a card or a letter with FedEx or UPS, but obviously it will cost way more than 44 cents. So you would still have the service. Fact is, USPS can't afford to do it for 44 cents from Nowhere to Timbuktu either. So it's going to cost more or USPS service will be dramatically reduced (a few days a week, PO boxes only). If delivery costs more, so be it, that will just expedite moving what can go online to move. And that which can't will cost more or find another way. We're trying to prolong the utility of the buggy whip, why?

Like many others here, we do everything we can online. So our mailbox has a little useful mail wrapped in a bunch of unwanted trash (junk mail).

I saw Sen. Claire McCaskill D-MO recommend (during the hearing with Postmaster General) they launch a marketing campaign to encourage people to write more letters. Yes, it's relatively small, but what a mindset given the deficit backdrop - let's throw money at the buggy whip! Absolutely clueless...
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Old 09-08-2011, 07:04 PM   #79
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It seems a bit warped that the Post Office has a big blitz of EXPENSIVE advertising to try to get people to use the post office at a time when they are apparently going belly-up. Wasted resources, perchance?
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Old 09-08-2011, 10:25 PM   #80
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I cave without Saturday mail, Pobably could live with just getting mail 2 or 3 days a week. But it is gonna take alot more than Saturday closing and shutting down a thousand rural 1 postperson type post offices.

The USPS 2011 deficeit is expected to be about 8 Billion dollars and 11 Billion dollars for next year. I even here talk of a shutdown in early 2012. A bandaid will be applied soon (probably Sarurday delivery ended, some rural POs shutdown, early outs) but the overarching issue (the USPS needs business process rengineering applied) will be bow waved until 2013. Wow, I do think the USPS has a huge liability for retiree pension/medical thats not reallu accounted for properly in the USPS/Govt. current cooked book data we see.
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