Post Office loses billions

[Ursa Majoris]

USPS lost over $2 billion in the first quarter.

 

So, what is to be done? Bear in mind USPS is not taxpayer funded, apparently.

 

WASHINGTON – The Postal Service is continuing to hemorrhage money, reporting a loss Tuesday of more than $2 billion over the first three months of the year and warning it could be forced to default on federal payments.

 

Such a default would not interrupt mail service to millions of Americans, but it could further hobble an agency struggling with a sharp decline in mail because of the Internet and a tough economy.

 

The agency says the $2.2 billion loss covers Jan. 1 to March 31 — sharply higher than the net loss of $1.6 billion for the same period last year. The post office also said it will have reached its borrowing limit, set by Congress, of $15 billion by the end of the budget year on Sept. 30.

 

Unless Congress intervenes, the Postal Service said, the agency won't have the cash for certain payment to the government, such as billions for a trust fund to provide health care benefits for future retirees.

 

"The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model," said Postmaster General and CEO Patrick R. Donahoe. "The Postal Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens."

 

Total mail volume, about 41 billion pieces, was down 3.1 percent for the January to March period, compared with the same time a year earlier, the Postal Service said. A modest increase in revenue from standard mail wasn't enough to offset the revenue loss from less first-class mail.

 

In the last three years, the agency has cut over 130,000 jobs. And it's making more cuts, with the elimination of about 7,500 administrative jobs in regional offices.

 

The Postal Service does not receive tax money for its operations.

[Pope Flick]

Tough call. I get that email has cut into their bread and butter, but the rise of e-commerce and the fact that chit still needs to get shipped should have helped. Their Parcel Post rates are fiarly competitive and it's easier to find a post office than even a UPS store which always seems to be more expensive.

 

They've failed at rebranding away from letter to packages, even with competition from FedEx and UPS which have rebranded themselves pretty well in the past 20 years. FedEx used to be THE overnight hookup, whereas UPS was THE 'ship your box' hookup. They've both claimed each other's mantle now and appear to be nearly identical companies in service. The postal service, not so much...

[Ursa Majoris]

Tough call. I get that email has cut into their bread and butter, but the rise of e-commerce and the fact that chit still needs to get shipped should have helped. Their Parcel Post rates are fiarly competitive and it's easier to find a post office than even a UPS store which always seems to be more expensive.

 

They've failed at rebranding away from letter to packages, even with competition from FedEx and UPS which have rebranded themselves pretty well in the past 20 years. FedEx used to be THE overnight hookup, whereas UPS was THE 'ship your box' hookup. They've both claimed each other's mantle now and appear to be nearly identical companies in service. The postal service, not so much...

And yet I ship all my personal parcels USPS because I like their rate and service, plus the people behind the counter seem able to read, write and count up to three. Maybe they just haven't publicized their service well or, alternatively, their business services need an overhaul?

[Pope Flick]

And yet I ship all my personal parcels USPS because I like their rate and service, plus the people behind the counter seem able to read, write and count up to three. Maybe they just haven't publicized their service well or, alternatively, their business services need an overhaul?

 

 

So do I - and I'll also say this but getting stuff from LA to around the country is FAST with them.

[MrTed46]

I would NEVER use USPS over FedEX or UPS. USPS has the worst tracking system and no reliability. I've had more incidents with USPS than UPS/FEDEX combined and I have used UPS/FEDEX MUCH more.

 

Yes, it is cheaper to use USPS in some instances but they are a pain in my arse. That is the general feeling I think around NYC area. People avoid using them.

[The Irish Doggy]

IIRC, they have to get special permission from some idiotic regulatory body to raise the price of first class mail and haven't been able to get the rate increases they've wanted.

[Pope Flick]

I would NEVER use USPS over FedEX or UPS. USPS has the worst tracking system and no reliability. I've had more incidents with USPS than UPS/FEDEX combined and I have used UPS/FEDEX MUCH more.

 

Yes, it is cheaper to use USPS in some instances but they are a pain in my arse. That is the general feeling I think around NYC area. People avoid using them.

 

 

Hmmm. I've got just the opposite out here, basically run all my eBay selling through them. Rates are tough to beat and I think I've had an issue exactly once in the past five years.

[rajncajn]

They should raise their rates for advertising (junk) mail.

[borge007]

They should raise their rates for advertising (junk) mail.

This

[DMD]

The inescapable reality is that the USPS is a business model that is hard to sustain because they deliver to every house six days a week. UPS and Fed-EX only go to select homes and businesses and around here they pretty much just throw the box at the front door and run. The ever rising cost of fuel and what has to be a continued drain of rural to suburban/city means there are a lot of hugely expensive routes. I was talking to a mail courier a few weeks ago that spends all day driving around to 300 mailboxes out in the country. Six days a week.

 

With electronic deposit and Fed-Ex/UPS and e-mail, the mail service should completely redefine what they do and how they do it. They are just not nearly as needed as they once were. You probably get your bills and junk mail now and that is all. If your bills go electronic and they will at some point, then the USPS exists to distribute junk mail only. The country could get by with mail delivery twice a week since it is pretty much nothing but bills to pay. Stagger those days and you could cut most variable costs in thirds.

[SeductiveNun]

The inescapable reality is that the USPS is a business model that is hard to sustain because they deliver to every house six days a week. UPS and Fed-EX only go to select homes and businesses and around here they pretty much just throw the box at the front door and run. The ever rising cost of fuel and what has to be a continued drain of rural to suburban/city means there are a lot of hugely expensive routes. I was talking to a mail courier a few weeks ago that spends all day driving around to 300 mailboxes out in the country. Six days a week.

 

With electronic deposit and Fed-Ex/UPS and e-mail, the mail service should completely redefine what they do and how they do it. They are just not nearly as needed as they once were. You probably get your bills and junk mail now and that is all. If your bills go electronic and they will at some point, then the USPS exists to distribute junk mail only. The country could get by with mail delivery twice a week since it is pretty much nothing but bills to pay. Stagger those days and you could cut most variable costs in thirds.

All but maybe one of our bills are electronic now. It seems the smaller companies are the ones that still mail out their bills/invoices. Also I know when I've had contractors work on my house they usually send a final invoice through the mail. But you're right, very few items are sent by mail anymore.

 

However, there are probably a fair number of senior citizens who still rely on the USPS for all their mail/correspondence and will not or do not know how or care to go to an electronic format for those things. That may be the biggest fight to keep delivery as it is.

[Seahawks21]

I can't find the report at the moment, I'll try to dig it up from work, but the USPS is actually significantly more accurate and efficient than UPS or FedEx. A higher percentage of packages arrive on time with USPS without damage. And the amount was significant. My company ships about 300 packages per day. We used FedEx for 5 years and about six months ago switched to UPS for cheaper rates. Boy, was that a mistake. UPS is a horrible, horrible company. Almost 10% of our packages arrive damaged (they are golf clubs, so the box is strange, but still.....). They will find any excuse they can come up with to not cover the damage claim. Also, their Next Day Air success rate has only been 82% with our company. This is the most expensive service they offer, and by far the least reliable. What a joke. A guy pays $100 to get a large package Next Day Air, and they don't even ATTEMPT delivery. FedEx routinely sends their drivers back to their facility to grab the package and make sure it is delivered as promised. The UPS reps are complete idiots and even their Preferred Customer team provides ridiculously horrible customer service. FedEx was vastly superior in every single way except price.

 

USPS is BY FAR the cheapest option. Even with the highest UPS/FedEx discounts you can get, USPS is 50% cheaper on domestic shipments and 66% cheaper on International services. Also, they generally deliver in the same time frame as the other two. Cheaper and more accurate. Now, with their flat-rate international boxes, you can send a box internationally for $15. Try taking that box to a UPS store and you're looking at $75. I can't see how USPS can make much profit at that price.

 

Our manager wants us to switch to USPS, but our ownership is against it. Their reputation is just so bad. If we told customers we ship everything USPS, they'd laugh at us and shop elsewhere. I'm really not sure where it all came from, but UPS is certainly not a better option. You are right though, the USPS tracking system leaves tons to be desired. You'd figure that would be a pretty simple fix though. Just scan the packages into a database.

[MrTed46]

I can't find the report at the moment, I'll try to dig it up from work, but the USPS is actually significantly more accurate and efficient than UPS or FedEx. A higher percentage of packages arrive on time with USPS without damage. And the amount was significant. My company ships about 300 packages per day. We used FedEx for 5 years and about six months ago switched to UPS for cheaper rates. Boy, was that a mistake. UPS is a horrible, horrible company. Almost 10% of our packages arrive damaged (they are golf clubs, so the box is strange, but still.....). They will find any excuse they can come up with to not cover the damage claim. Also, their Next Day Air success rate has only been 82% with our company. This is the most expensive service they offer, and by far the least reliable. What a joke. A guy pays $100 to get a large package Next Day Air, and they don't even ATTEMPT delivery. FedEx routinely sends their drivers back to their facility to grab the package and make sure it is delivered as promised. The UPS reps are complete idiots and even their Preferred Customer team provides ridiculously horrible customer service. FedEx was vastly superior in every single way except price.

 

USPS is BY FAR the cheapest option. Even with the highest UPS/FedEx discounts you can get, USPS is 50% cheaper on domestic shipments and 66% cheaper on International services. Also, they generally deliver in the same time frame as the other two. Cheaper and more accurate. Now, with their flat-rate international boxes, you can send a box internationally for $15. Try taking that box to a UPS store and you're looking at $75. I can't see how USPS can make much profit at that price.

 

Our manager wants us to switch to USPS, but our ownership is against it. Their reputation is just so bad. If we told customers we ship everything USPS, they'd laugh at us and shop elsewhere. I'm really not sure where it all came from, but UPS is certainly not a better option. You are right though, the USPS tracking system leaves tons to be desired. You'd figure that would be a pretty simple fix though. Just scan the packages into a database.

 

I do not like when I purchase something online and USPS is the only method of delivery. I hate dealing with them.

[Yukon Cornelius]

they need to cut Saturdays

[Ursa Majoris]

they need to cut Saturdays

Or Tuesday. Or Wednesday.

[bpwallace49]

Clearly the Postmaster General needs to declare martial law

[SteelBunz]

I've caught UPS and FedEx on at least a dozen occasions scanning a package of mine as being 'delivered' with a timestamp, only to have it show up 3 hours later or even the next day. And on these occasions, I was home waiting on the package (usually to install for a client or myself). No knock, no truck....and definitely no package when they said they left it.

 

Granted USPS tracking isn't as good, but I don't sit around the house waiting on it because I paid some exorbitant fee to get it there before a specific date.

[MikesVikes]

Maybe the next Unabomber can use Fedex or UPS so the Post office will be back in vogue again.

[MikesVikes]

I think the Gubment is back on track now. I just noticed the mail going to Canada is now 80 cents up from 75.

[frenzal rhomb]

maybe this is over implistic but within the rule of supply and demand - less people use their service yet they continue to raise prices. Would it not make sense to reduce prices to attract more users?

[nuke'em ttg]

Big fight now that we may lose our post office, that's a lot off trucks in that parkin lot and tacos out of town. Agree with the idea of cuttin brack days but what stands out is that they just deliver junk mail, all our bills are paid on line....losing the mailmen in bars bitchin bout chit would be great, if they still do that

[buddahj]

If their customer service didn't suck so bad...

[nuke'em ttg]

If their customer service didn't suck so bad...

 

 

ya mean "STAY BETWEEN THE TAPED AREA" rubbed ya the wrong way, my goal is always ta try and make these people laugh

[Fatman]

It's odd to me that the Postal Service is explicitly outlined in the Constitution yet it receives no government funding (and is terrible at business, apparently).

[Sox]

There are two big reason the Post Office is losing money.

 

1:They are forced to pre pay into retiree health benefits.They are the only government agency that is required to do this,and this alone is nearly half of their deficit.It is also considered part of their yearly budget.I wonder what the federal government does with this prepaid money?

 

2:The economy is still sucking wind.

 

These two things alone would pretty much solve the problem if fixed.

Edited May 17, 2011 by Sox