USPS Losing Battle Against the E-mail Age

An anonymous reader writes "An article in the NY Times explains how the United States Postal Service is in dire financial straits, and will need emergency action from Congress to forestall a shutdown later this year. Postmaster General Patrick Donahoe said simply, 'If Congress doesn't act, we will default.' Labor agreements prohibiting layoffs are preventing one avenue for reducing costs, and laws forbidding postage rates from surpassing inflation rates keep income down. On top of that, the proliferation of e-mail and online bill-paying services have contributed to a 22% reduction in snail-mail volume since 2006. They're currently hoping for legislation that would relax their economic requirements and considering an end to Saturday delivery."

an engineered crisis

[Anonymous Coward]

Strange that /. is missing the real crux of the problem; a bad 2006 law:

>In 2006, Congress passed a law requiring the Postal Service to wholly pre-fund its retirement health package – that is, cover the health care costs of future retirees, in advance, at 100%.

most organizations are allowed to fund retirement and pension funds in a graduated manner that provides funding at the time of need rather than decades in advance. Its almost like this crisis has been engineered...

Source:
http://news.blogs.cnn.com/2011/08/18/is-benefits-law-dragging-down-the-postal-service/

Re:Nonsense

[yourmommycalled]

It's not the unions idjiot look at the bill the Rethuglicans passed to destroy the USPS so Rethuglicans could sell it of to their masters

Re:Battle?

[halowolf]

Well the USPS should come to Australia and see what Australia Post is doing. They saw the writing on the wall, and took steps to adapt to the internet age and keep themselves relevant by doing all they can to get themselves into the delivery chain for the influx of packages being sent to compensate for the decline in letters et all. Plus they offer so many services (government and private) to get people into their stores.

The only real problem is that this can lead to a little more junk mail as businesses pay Australia Post to deliver their junk instead of private contractors.

Re:duh

[vlm]

Unsolicited stuff and junk mail? Why should the government pay for something to be hauled to my home, which will land in a recycle bin, which the government will pay to pick up at my home.

My wife, the retired postmasters daughter, has explained, and I have verified, that the most profitable segment of delivery is junkmail due to intense automation, and frankly, zero insurance claims (who really cares?). The next most profitable market segment was magazines. Commercial bills break even, more or less. Finally they lose money, big time, for each handwritten envelope. He retired in the 80s, supposedly not too much has changed since then.

To be honest, the simplest and least painful way to balance the books for the USPO would be to make the sale of greeting cards and postcards illegal. So few handwritten/homemade ones would be created and sent that it wouldn't matter.

Re:It's true

[ScentCone]

They are an supertanker with 2 steering wheels- the USPS leadership on one and congress on the other.

You're forgetting the third steering wheel that congress built, and turned over to: the labor union that has the USPS by the short hairs, fiscally. Their contract prohibits any layoffs, even when they close down an under-used post office. Those union employees don't pay as much for their own health care or contribute to their own retirement plans as do normal government employees, and so on - and there's nothing the USPS management can do about it, except hemorage money in that general direction.

Re:duh

[hrvatska]

You missed can't fund its pension plan at the same lower level as its private competitors.

Re:Battle?

[nschubach]

Put a 3x5 note card on your mailbox door that says "No Advo please". I put a note on my box stating something along the lines of "No Current Resident mail or mail not addressed to ____ please" and the mail person replaced it with a "No Advo" symbol (like the No Smoking signs, but with Advo crossed off.)

Re:It's true

[devotedlhasa]

Congress and the Bush Administration passed the 2006 PAEA law which forced the USPS to submit over $5 billion a year in trust fund payments. This trust fund serves the purpose of transferring federal deficit to the USPS and artificially lowering the government's accumulated debt. This is really a story about bad government policy and not about how technology is replacing the need for a post office.

Re:an engineered crisis

[Chowderbags]

This really is the single largest problem that the USPS has. They basically have to pre-fund 75 years of retirement benefits and they were only given 10 years to do it. There is no other business or government agency that has to do anything even remotely similar to that and without that their financial situation would be impeccable.

Re:Do your part! Snail-mail your comments!

[hedwards]

In cases like that you send a registered letter to the agency requesting proof that you owe the debt. That will stop them dead in their tracks, especially given that lately even legitimate mortgage debt often can't be proven to be owed to the party wanting to collect.

Another Bush Presidency casuality

[Frankie70]

The real reason for USPS problems is not e-mail or online bill pay. The real reason is the Postal Act of 2006 which requires USPS to pre-fund 80% of future retiree health-care obligations by 2016. This costs USPS 5.5 billion $ per year. If not for this, USPS would have shown a 600 Million $ profit over the last 4 years.

None of the USPS competitors (or for that matter any other company) has this burden. It's very likely this was lobbied for by USPS competitors - No lobbyist left behind.