Monday, March 8, 2010

Postal Insanity

Last week, the media's airways were filled with commentaries about the possibility that our U.S. Postal Service (USPS) just may eliminate Saturday mail delivery. The USPS is in deep financial trouble. This year it is expected that it will have a financial loss of $7 billion dollars. The year prior it was $4 billion. By cutting out Saturdays, the Postmaster General expects to save $3.5; far short of the $7 billion that they will lose this year.

Besides the Saturday mail gambit, the USPS, as usual, plans to raise rates. And, every time they do, they lose the only money maker they have: First Class Mail. By raising rates, they continue to force the typical first class mailer to an alternative service: The Internet.

The Post Office's problems aren't Saturday mail or the need for higher rates. The real problem is the amount of labor they have hired and the amount of benefits that their labor force receives while they are working, as well as after retirement.

Despite all the efforts to automate, the productivity of the Post Office has barely increased over the years. The reason for this is that it is a labor behemoth that is primarily dedicated, these days for sure, to the delivery of junk mail. Because of junk mail, the postal workforce is forced to deliver mail to almost every customer on a daily basis. A situation that truly "only" benefits the postal workers union. On top of it, they charge less for labor intensive junk mail than for a simple first class letter -- the mail that they were originally chartered to deliver.

When you think about it, the average postal delivery customer probably only gets fewer than a dozen pieces of legitimate mail per month. Yet, every day, the postman is there hand sorting junk mail into each and every mailbox. Junk mail is time consuming at the delivery end and it is also time consuming because of sheer volume. As a result of all that junk, the carrier must restock his truck or mail sack more frequently. Again, more labor.

If America is serious about saving its mail system, it should demand that the US Postal Service return to its mandated charter of delivering correspondence and not junk advertisements. If those advertisers still want delivery of their junk, they -- not us -- should pay a heavier postal rate. Let's keep Saturdays and let's stop the insanity of the constant rate increases that exceed normal inflation and just seem to push the Post Office deeper into debt.

1 comment:

Megan said...

Good insights. I've never understood why a monopoly entity has the need to sponsor/advertise, either. Why was the USPS the proud sponsor of the US cycling team?