StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



U.S. Postal Service: Too Big to Mail?

22 Jun 2009
Posted by Pete Davis

Do we need the U.S. Postal Service?  Today's Washington Post editorial offers a well-researched and thoughtful wake-up call suggesting the answer may be no unless USPS can "reinvent itself for the 21st Century."  The Post estimates the USPS will lose between $6 and $12 b. this fiscal year, and cutting back deliveries to five days a week seems inevitable.  Mail volume has declined for seven years in a row, and it plummeted 14.9% in the first quarter alone.

If you're like me, you wonder why you have to sift through so much junk mail to find the few pieces of mail you want.  I rarely mail anything anymore.  Most of my payments are made electronically.  On the rare occasions when I need postal service, I usually stand in line for 10 minutes or more despite all of USPS's efforts to improve customer service.  When I want to mail a package, I go to the United Parcel Service (UPS) store.

The U.S. Postal Service doesn't get it - the Internet has destroyed its business model.  Its technology is outmoded.  The Post recommends an immediate shift to the Swiss Post model, where you check your mail online and decide whether you need physical delivery, but the postal workers union, junk mailers, and Congress won't let that happen.

One other impediment looms large: the U.S. Postal Service was established by the Constitution.  I'd be interested if any constitutional lawyers think the Postal Service could be dismantled without amending the Constitution.

The USPS is another bailout waiting to happen.

 

cut off

Eliminating the postal service would cut off some poor and elderly who rely on it to get checks in the mail. A requirement for FDIC banks to provide no cost accounts for purposes of direct deposit or other means of sending payments would be necessary.

Especially the elderly lose faculties as they age and may not be online. Getting rid of the post office could raise the cost of sending any paper to several dollars or whatever the delivery services charge.

Reinvention after careful consideration of the effects the changes would have on the lives of vulnerable Americans would be a better option.


"The USPS is another bailout

"The USPS is another bailout waiting to happen."

Look at the good side - it'll be around 1% of what the finacial system has sucked up.


Protected from competition

bakho, it's been made against the law, by the Private Express Statutes, to compete against the USPS in the delivery of those checks for 'the poor'. Which would seem to indicate your theory needs revising.


S&P 500 operating EPS are

S&P 500 operating EPS are down about 40% from a year ago.

How does the USPS earnings decline compare with this?

Is the USPS doing better or worse than private firms in this recession? I can not tell from the data you provide.




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