Monday, September 5, 2011

The United States Post Office Is Near Default

If I were to create a business that primarily existed to benefit a labor union, the United States Postal Service (USPS) would be that business. Through its pricing structure for low-cost junk mail, pre-sorted mass mailings, and flyers, the USPS has guaranteed that a mail carrier makes a delivery to nearly every household on a daily basis and does that 6 days a week. That. to me, makes the USPS the most labor intensive and labor beneficial business in the country and it is because of this that they are losing billions of dollars every year. That's why today, the U.S. Postal Service is claiming that they will become insolvent in 30 days unless the Congress passes legislation to bail them out.

I know from my own experience, the legitimate mail I receive each month only accounts for 7 or 8 days of actual delivery. Yet, with all the junk mail I receive, the mail carrier is forced to visit my mail box a total of 24 times in an average month. That means that the ratio of junk to legitimate first class mail is about 3 to 1. In other words, the USPS has 3 times more postal carriers than necessary -- if it only focused on the delivery of legitimate first class mail.

Through its entire history, the management personnel of the post office have risen up through the ranks of its postal workers. In its modern history, the management has grown out of a labor union pool. Over the years, the influence of the postal workers union (American Postal Worker's Union) has created a business model that is too labor intensive and totally unsustainable. I think its high time that the USPS changes its business model. Junk mail should not get a free ride because it is the junk mail that is actually killing the post office. The only way that the USPS can save itself is to get leaner and meaner with its total focus being on delivering first class mail.

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