The US Postal Service's Business Model Is Outdated. Is It Time To Wind It Down Or Privatize It?
from the please-mail-me-a-buggy-whip dept
Just recently, we discussed whether or not ceasing Saturday delivery was a good idea for the USPS. John Potter, the US Postmaster General, recently said that the postal service's business model is as outdated as the newspaper industry's. Potter said:"Twenty years ago we would laugh at the notion that a newspaper would ever embrace the idea that maybe the channel of the future is electronic and that you may have to change your business model,"Sure, similarities between the industries definitely exist. Craigslist is a much cheaper and more efficient marketplace for local goods than the classifieds section in the newspaper ever was, and email is a much cheaper and more efficient means of communication than snail mail. That said, whereas for the newspaper industry, delivering a daily, physical newspaper to households may actually be an endangered business, the business itself of delivering physical items to households is still very much in demand. After all, with so much shopping happening online nowadays, someone still has to deliver the goods (until replicators, a la Star Trek, are perfected). In fact, for over a decade now, we've been talking about this opportunity to optimize the "last mile," and as of yet, nobody has really even come close to solving this problem.
That said, the USPS is a government institution, and even though it does not take any tax funding to run, an attempt to attack this opportunity may best be mounted by the private sector (like UPS and FedEx), especially when you consider the USPS's projected $238 billion shortfall for the upcoming decade. So, since it's not a private business, the best solution for the USPS may be to simply accept its diminishing role in the daily lives of Americans, and focus on continuing to run as efficiently as possible for as long as it remains useful. That said, the other solution may be to remove the government-mandated monopoly and privatize the USPS, and then let that private entity decide whether or not to invest in the business. Either way, it seems silly to ask taxpayers to invest anything further in the USPS since so many alternatives exist already. We should definitely all be appreciative of the part that the Postal Service has played in the foundation of our country, but what else can be done?
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Filed Under: endangered business, online shopping, usps
Companies: fedex, ups, usps
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Universal Delivery
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I sned in on another site..
why dont they raise the price of it. AT least bring it up to the same price as #1 mail..
HATe that 99% of it comes in at 1/2 the price I have to pay and its STUFF I dont want.
It will force them to WANT people to ASK for their mail.
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Re: Universal Delivery
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Here are some reasons why none of those things will ever happen. First who wants to be the senator to have a post office close in his or her district. Second there are at least 4 different commities that have oversight over the USPS and all of those senators are progressive communist bastards that all believe that government is to provide free services to all, which could not be further from what the actual role of the government is.
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really?
ANd, should i ask, what is your OPINION of How the gov should be run?
the USA gov is given the power to PROTECT the people. ANY way they see fit.
THE PEOPLE..
NOT the corps.
And what is funny about this country? is that EVERY major advancement has Been done by the USA gov. NOT THE CORPS.
The continental rail, was BACKED by the gov. Then those that had money in the railways, PULLED out the money and let it stagnate..
The CORPS didnt build the bridges..
NOR did they build MOST of the Electric power. the Dams and nuke plants were built buy the GOV..
They werent going to place FIBER, until the gov gave them the money to DO IT..
The gov should go back and PULL ALL MONEY from the corps, BUILD what is needed, then SELL IT BACK to the corps, or keep it and MAKE MONEY off it. Including along the freeways and remote areas that CELL corps WONT GO.
I would LOVE the gov to start its OWN grocery/retail outlet..to COMPETE with the corps. IF the corps WANT IT, they can BUY IT..
Only problem is the Gov sells things at PENNIES ON THE DOLLAR..ask army surplus..
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One simple change in federal law could solve this problems Under the current law only the USPS can place mail and packages in your mail box. Fed Ex and UPS cannot.
That law is the biggest impediment to competition and innovation in mail delivery. Revoke the law, let everyone compete in the mail delivery process, and we'll all benefit in the long run.
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Trivia Question
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Last mile done better
Make post office work 24 hours, 7 days a week. Schedule parcel deliveries several times a day, so that if a package comes into relay station at 4:54pm it is actually relayed and moved on to the next station as soon as it is processed. Deliver it it the destination at 9pm or 10pm or even 11pm (see: this post). I've seen lines of dozens of people picking up packages at UPS store at 10pm - so give commercial services run for their money. Make Saturday and Sunday deliveries, when UPS and FedEx are asleep. Give me something that has more value than other commercial services. Small businesses work on weekends, they could use it. Lawyers, accountants, geeks and gadget freaks, heck - even regular boring people like me who actually work the same hours UPS is open - we all would appreciate the service that's there for us.
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Re: Universal Delivery
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Re: Re: Re: union
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Vote for Change?
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Post Office Not Outdated
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already privatized
I do admit that the usps is significantly cheaper though, and they do a good job. Maybe it's time they find ways to compete, but I don't see the usps as an industry smart enough/flexible enough to do something new.
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Re: really?
> USA PROTECT ANY THE PEOPLE NOT EVERY USA NOT THE CORPS.
> BACKED PULLED CORPS NOR MOST GOV FIBER DO IT.
> PULL ALL MONEY, BUILD, SELL IT BACK MAKE MONEY. CELL
> WON'T GO. LOVE OWN COMPETE IF WANT IT, BUY IT.
> PENNIES ON THE DOLLAR.
Thanks for your time.
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Taxes
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Sponsored Bicycle Racing
How about they DON't sponsor the USA Tour de France bicycle team and keep the cost of postage down? How about they charge everyone the same for mail delivery? - That would really clean out the SPAM from my snail-mail box.
Ever since the Tour de France sponsorship / postal rate increase, I've switched over to 100% bill paying electronically. When I order something via the Internet, I specify either UPS or FedEX delivery. I'm doing everything I can to put the USPS out of business, which is exactly where they belong.
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Last mile done better
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Re: already privatized
Talk of privatization is fun but it is really moot. Nobody wants it because it would be an enormous capital investment with very, very shaky prospects for any return at all. If you own stock in a company that considers buying out the PO - sell your stock as quickly s you can. It is not a profitable business if you have to cover all addresses nationwide. You could spin off the profitable areas to private firms but that would leave the taxpayers having to subsidize USPS when we do not currently do so.
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USPS sloowwwwww
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As for killing the junk mail, that would kill the PS, too. Raise the price of spam, spammers no longer pay to send it, USPS is out of the majority of their income, we all pay more to take up the slack or they just shut down. Boo. Let them keep delivering spam to the people who haven't blocked it.
I say we all express outrage at phone books, next. Why does someone keep dumping these huge piles of wet mouldering trash on my steps every year?
Oooh, I know, daylight savings! Lets kill DST!
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Re: really?
The CORPS OWN the government.
Ok, just most of the lackies the fill key positions.
Now there's a shocker.
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Re:
please tell me you are kidding
that is by far the stupidest law i have ever heard
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Re: Re:
The purpose of this law is to prop up the USPS. Sure, UPS and FedEx does a great job with your packages, because currently it's essentially illegal to for it deliver first class mail. Why not also allow the UPS and FedEx do a "great job" delivering first class mail? Do you have any reason to think they'd do a worse job than the USPS?
And why should we erect a separate mail box? That makes no ficken sense. Let's make an asinine law for the sole purpose of protecting an inefficient service, and lets make it even less efficient by making everyone in the country install yet another mail box. I've never met you before, but I can tell you've never run a business. Your ideas are the opposite of efficiency.
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Re: Sponsored Bicycle Racing
FWIW they were attached to Lance Armstrong at his peak and it was probably the best ad dollars they spent.
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Re: really?
> people. ANY way they see fit.
Not true at all. The Constitution places strict limitations on the role and power of government. Article I, Section 8 lists the powers of the federal government. And it certainly doesn't say they can do anything they like.
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And "run things"? I don't think so. The fact that you think this is the role of government is a terrifying sign of the times.
The role of government is protect life, property, and freedom. I do believe that part of that role means ensuring a system of free-flowing communication nationwide. The question is, does it need to be physical mail anymore? If so, does it need to be government-run anymore, or can we allow private industry to take over the role with "last-mile" regulations?
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And to the person wanting to break the unions, consider this. If postal management followed the contract and treated their employees with dignity, there would not be a union. If all major employers had throughout history treated their employees with dignity, respect and a fair wage, there would never have been unions. So instead of railing against unions, maybe you need to work toward a system that makes them unnecessary.
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Re: I sned in on another site..
So all of that mail may hev to only be processed on one machine, one time. Your letter, on the other hand, must pass through at least 4 different machines to arrive at the same sort level that the major mailers have already done.
In short, they do half of the processing BEFORE the USPS even sees the mail, so they only pay half the price. Simple economics.
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1. Generate much less waste
2. Utilize far fewer resources at the USPS
3. Allow the USPS to cut some fat and run more efficiently
So, while the revenues would decrease, the costs would decrease as well.
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3.1 Basic Information for Customer Mail Receptacles
3.1.1 Authorized Depository
Except as excluded by 3.1.2, every letterbox or other receptacle intended or used for the receipt or delivery of mail on any city delivery route, rural delivery route, highway contract route, or other mail route is designated an authorized depository for mail within the meaning of 18 USC 1702, 1705, 1708, and 1725.
3.1.2 Exclusions
Door slots and nonlockable bins or troughs used with apartment house mailboxes are not letterboxes within the meaning of 18 USC 1725 and are not private mail receptacles for the standards for mailable matter not bearing postage found in or on private mail receptacles. The post or other support is not part of the receptacle.
3.1.3 Use for Mail
Except under 3.2.11, Newspaper Receptacle, the receptacles described in 3.1.1 may be used only for matter bearing postage. Other than as permitted by 3.2.10, Delivery of Unstamped Newspapers, or 3.2.11, no part of a mail receptacle may be used to deliver any matter not bearing postage, including items or matter placed upon, supported by, attached to, hung from, or inserted into a mail receptacle. Any mailable matter not bearing postage and found as described above is subject to the same postage as would be paid if it were carried by mail.
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Re: Sponsored Bicycle Racing
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Re: Re: Re: Re:
Additionally, the advantage is that we could open up first-class mail to competition without having to double our mailboxes, which is just about the dumbest idea I've ever heard. Private carriers can and do operate much more efficiently and more effectively than the USPS, and they do so without a $250 billion debt that will otherwise have to be subsidized.
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But I highly doubt that's true at all. Both UPS and Fedex have expressed their interest in that business before and most of the overhead is already established for parcel delivery. And there's no reason why a single entity would have to operate wire-to-wire; there may well be many companies operating segments, for instance specializing in local delivery. This is another reason why thinking that rural areas wouldn't get any delivery is a red herring, because if there is a demand for it, somebody will spring up to meet it. It may be more expensive, but then it should because it's more expensive to deliver mail to the boondocks than to downtown.
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I think the basic point of this article is either change your business model, or get out of the way and let someone else do it better. Otherwise you can't exactly complain about losing money.
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Not Joe Postal
I do think, however that it's probably for the best for things to wind down for the USPS. $238 billion is a lot cash over a decade. Let's keep 'em around for as long as we can, but let's find ways to do that efficiently.
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Compete?
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duhhhhh
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You seem to have the mistaken notion that USPS makes its own business decisions. To a certain extent that is true but they can not do anything that isn't approved by Congress and/or their regulator, the Postal Regulatory Commission (PRC). The PRC testimony and deliberations are public records that can be examined by anyone on their website. Anyone can intervene in their proceedings as well. I have done so on many occasions. I would recommend that the folks posting here learn a little bit about the print advertising, product fulfillment and delivery industries and the specific issues of USPS before participating. The level of discourse is significantly higher than is found on internet discussions.
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Natural Monopoly
Efficiency? Debatable. Reliability and effectiveness? Yes.
The post office delivers to places no one else wants to. If others want to compete, they absolutely MUST take on the responsibility of universal delivery. If they don't, they're not really competing, because that's a BIG part of the USPS's costs.
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Re:
Congressmen have districts. Senators represent states. However, other than that, your question is valid.
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Re: Re: really?
The gov doesnt understand it is the MAIN CORP, in this world of corps. Its being rough shod by the smaller ones.
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Re: Re: really?
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Universal Service Obligation
http://en.wikipedia.org/wiki/United_States_Postal_Service#Universal_Service_Obligation_and_m onopoly_status
It was part of the bargain they got when the USPS was granted a monopoly status exemption.
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Re: Re: Post Office Not Outdated
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If you privatize the USPS, there is no more government mail service. Not sure how you do that and not end the government monopoly on first-class mail, unless we're just gonna make it illegal to send letters.
If you open up the mailbox you are going to have kids on bicycles going in there several times a day delivering fliers and helping themselves to whatever they want.
Again...kids can already do that! It's illegal for them to take mail or to break in either way, and I'm guessing very few kids are discouraged from sticking fliers into unlocked mailboxes because it's illegal but rather because they don't really have any desire to. Whatever problems there might be, I'm sure that a solution would be quite easy compared to the larger issue of lack of competition and the USPS' debt.
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Re: Re: Re: Re:Unions
Today, like most organizations, they exist primarily to perpetuate their own power. Rather than working with management to solve problems, they're forced to demand more and more and more. More money, more benefits, more time off, and so on, all to justify their own existence and the dues members pay.
The auto unions killed Detroit, a clear case of killing the goose that laid the golden eggs.
How is it that Toyota or Honda can build a profitable plant here in the US making cars with US labor... and we can't?
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Re: Not Joe Postal
I see no serious problems with the USPS, and would hate to see it privatized. My fear is that if that would happen, we'd get worse service at a greater cost.
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Yes, but you still go to your mailbox on each of those days, don't you?
You're not listening. Junk mail is not a drain. Junk mail requires less postage because it requires less work. Your first class mail is NOT subsidizing the junk mail. If anything, it's the reason the post office still delivers mail 6 days a week; it's because you always have some kind of mail that the USPS can afford to come to your mailbox daily.
Also, junk mail does not represent waste; junk mail exists because someone buys whatever it's selling. Junk mail is a valuable tool for all sorts of businesses. Get a Parakeet if you have no use for it.
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But there aren't viable alternatives
Sure, I can send a Fed Ex, but I really prefer fifty cent stamps to twenty dollar fees.
There is simply no viable alternative, particularly for rural communities, to the USPS for mailing letters.
The only ones who would benefit from private delivery would be the CEO and board of directors of the corporation. I can't see how the employees or customers would be better off.
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Re: Universal Delivery
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Re: Trivia Question
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The USPS is a Government SERVICE - Lets keep it that way.
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Re: The USPS is a Government SERVICE - Lets keep it that way.
Really? I didn't see that in the Bill of Rights. Yet another example of entitlement thinking. I suppose you think education and health care are other things we're entitled to? Guess what? We're not.
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Post Office
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The Mail
And what the hell's changed?
Back in the 70's when it was decided that the USPS was to either fly or die on its own power, some fresh washed face on an MBA smiled, pumped the air and tantrumed 'Run like a business,dammit!"
Well, sonny, it ain't a business. Its a critical organ business,providers,government and people depend upon and it was never expected to be self-sustaining.People foam at the mouth at rising postage rates and poor service. Uhhh, compared to what? I don't need Saturday service and all that crap in my box called bulk mail is mailed CHEAP - bulk rate. The Postal Service's new "If it Fits, it Ships" is a great move towards better customer service and revenue but we need to abandon this BS that the Post Office is a business. It isn't and it never should have been remodeled as such.Return it to strict government control and forget about digitalizing the mail. I want a Penny's catalog I can take hunting next winter.
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Re: The Mail
You people think privitization and 'free enterprize' just solves everything. It doesn't. Frankly, I use FedEX for next day pouches and UPS to return cores- which are ALREADY broken. UPS counter service sucks and price ain't everything.
If the sanctity of competetion is so damn important, look at your underwear,TV, computer, our car - and the American jobs that somebody lost for the sake of Free Trade. I'll run my Ford truck against your riceburner anyday.
And don't blame it on the unions either - UPS is union, and FedEx is headed that way. Try to complain about service sometime and see where that gets you.
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Re: USPS sloowwwwww
You chose it or it was the only shippng option offered by that vendor.
Don't blame the USPS. Slow and cheap frequently go togather. By the way,mail a letter from Africa or India.
Get back with me on that....
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Re: Re: The USPS is a Government SERVICE - Lets keep it that way.
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Re: Re: Re: Universal Delivery
What is stopping all the small, rural and remote communities from getting together and creating a postal co-operative?
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Re: Re: Re: The USPS is a Government SERVICE - Lets keep it that way.
Oh God, another NeoProg, and this one with an opinion on everyone's political idologies. It's Bush's fault, too, you know.
See how stupid that sounds?
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Re: The Mail
"And you damn kids get off my lawn!"
I guess you'd like the postal service to take on all the great qualities of other government run opperations, like the DMV. Yes that's a much better way to have the government interact with the public.
In case your sarcasm meter is broken, that was sarcasm.
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Re: Re: Re: Re: Universal Delivery
In a word, "cost." Flying a plane round trip from Anchorage to Adak (2400 miles) to deliver a handful of letters and packages to the roughly 300 people there would be cost prohibitive in the extreme. Say they form a cooperative and split the cost, it's still going to cost them a boatload. Even if the plane makes several stops at other communities along the way, it's still to expensive to do the way the postal service does it now.
The only way to make it work would be to cut back to only one or two deliveries per month.
As for FedEx, go to their website and see what it costs to deliver a 1 lb. box to Adak. Then tell me that's something you'd want to do on a regular basis.
As for food and other goods, that's all brought in by barge which isn't exactly the fastest means of delivery.
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Scarcity
Where the post-office really needs to compete is with the package services that free/cheep shipping use.
2-3 day delivery is far faster, but my guess is that there is something like a $1-2 difference in cost for a typical package. I however, would typically love to choose the $1-2 option, esp since the packages would then get delivered to the nice LOCKED box instead of my porch.
The only other area that USPS is lacking is the tracking. Consumers don't necessarily need a per-package validation at every step. Merely watching their package getting closer and having a valid expected delivery date is probably sufficient.
In summary:
* Keep Saturdays
* Provide expected delivery dates
* Provide a 'best effort' "It's in a shipping block (info withheld for security), which was scanned as departing where-ever 2 hours ago headed for this new place."
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Re:unions and commie bastards
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Dizi izle
Canlı Dizi izle
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Re: Universal Delivery
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