Why Is The Post Office Failing?

The most recent reason the Post Office is in trouble because the coronavirus has sharply curtailed how much mail is being sent by businesses. Back in April, then-Postmaster General Megan Brennan informed Congress of the dire situation.
In December 2020, a combination of the cost-cutting measures instituted by Postmaster General Louis Dejoy and increased holiday season shipping volume resulted in widespread package shipping delays and ‘buckling’ of the Postal system.

Why is the post office in trouble?

The Post Office’s problems are business-wide, because its expenses keep exceeding revenues. The Postal Service was designed to be self-sufficient — unlike other federal agencies, it does not live off dollars collected as taxes. Rather, it tries to cover its operating expenses by charging postage.

Why is the postal service losing money?

The Postal Service has limited tools to control its overhead. Laws and political pressures harry its every effort to reduce delivery frequency (presently mandated at six days per week) and shutter money-losing post offices. By law, the vast majority of all USPS positions are held by unionized federal employees who have robust job protections.

Is the post office going out of business?

The Post Office is going out of business. There are few organizations as efficient as the U.S. Postal Service. Really. But operational efficiency is insufficient for survival in today’s competitive marketplace, and almost impossible to create success! Think about the Post Office’s value proposition.

What happened to the postal service plan to close rural post offices?

A plan to close thousands of rural post offices was abandoned after postal officials deemed the closures would “upset Congress a great deal,” Barnett said. But one of the Postal Service’s biggest problems has nothing to do with the mail.

Is the post office in trouble?

The U.S. Postal Service is an essential service that is facing extreme financial hardship at the moment. Menu Toggler Entertainment Trending Influencers Gaming Terms of Service DMCA About Privacy Policy Home> Trending Source: Getty Images Here’s Why the U.S. Post Office Is in Trouble and What We Can Do to Help By Robin Zlotnick

Is the postal service losing money?

The Postal Service is losing money and needs to make changes. The problem is that Congress refuses to let it raise more money, refuses to let it spend less money, and refuses to let it cut service: Postal officials recently tried to end Saturday letter delivery, which could have saved $2 billion per year, but Congress blocked it.

Why did the USPS fail?

Thus, USPS was stuck doing what it has always done, as market shift pushed it increasingly into irrelevancy. Missing a market shift is what causes to most business failures. They don’t fail because they are lousy at execution. Or because of lousy, inattentive managers. Or even because of unions and high variable costs such as energy.

What happened to the postal service plan to close rural post offices?

A plan to close thousands of rural post offices was abandoned after postal officials deemed the closures would “upset Congress a great deal,” Barnett said. But one of the Postal Service’s biggest problems has nothing to do with the mail.

The Post Office is in Trouble. Here’s How to Help.

On the 13th of April, 2020 Is the United States Postal Service, which is established in the Constitution, truly on the verge of becoming bankrupt?Yes, the United States Postal Service is in financial trouble.It is also true that they have previously had severe financial difficulties and have gotten assistance from Congress.So, what exactly is going on right now?

Let’s take a short look at what’s going on.

Why is the Post Office in trouble?

The most current reason for the Post Office’s predicament is that the coronavirus has significantly reduced the amount of mail being sent by companies in recent weeks.Megan Brennan, the then-Postmaster General, alerted Congress of the catastrophic situation back in April of this year.″The pandemic has entirely transformed the climate here,″ said Rep.Gerry Connolly (D-VA), the chairman of the subcommittee that supervises the Post Office following their briefing: ″It has absolutely changed the environment here.″ ″The reduction in mail volume is devastating.″ When the pandemic started, mail volume dropped by around 30%, and it is predicted to decline by as much as 50% as the epidemic progresses.

The Postal Service need $25 billion in direct financing to remain operational, which was included in the most recent coronavirus relief plan by the Democrats.(To put this in context, the Post Office makes $1 trillion in revenue on an annual basis.) However, knowing that Trump would be reluctant to sign the bill if that provision was included, Senate Republicans have refused to collaborate with Democrats in order to pass the next disaster relief bill, which was enacted in December.What exactly is Trump’s beef with the United States Postal Service?There are three major aspects to consider.First and foremost, Trump despises Amazon’s CEO, Jeff Bezos, who also happens to be the owner of the Washington Post.

Bezos has refused to bow down to Trump, and as a result, Trump receives a disproportionate amount of bad coverage in the Post.One of the ways Trump believes he can penalize Amazon is by increasing the Post Office’s pricing, i.e., the amount it charges Amazon to ship all of those parcels all over the world.Second, Republicans have long advocated for the privatization of the United States Postal Service, which is challenging the capacity to support the Post Office system.Behind additional information on the push-pull nature of privatization and the reasons for the Post Office’s underlying financial problems, please see THIS.) Finally, and perhaps most importantly, Trump believes that if he can prevent votes from being shipped to and from voters in the presidential election, he will be able to scrape out a victory.Louis DeJoy, the new Postmaster General, is a Trump contributor who has a number of conflicts of interest.He took over the position in May after being appointed by President Donald Trump.

  • Since then, he has fired or replaced a number of top Post Office officials, and the nationwide slowdowns have become worse rather than better.

Can the Post Office be allowed to fail?

Since the country’s establishment, the Post Office has played an important role.It is one of the very few federal agencies that is specifically mentioned in the United States Constitution.Congress was entrusted with the job of ″establishing post offices and post roads,″ according to the document.(Article 1, Section 8 of the Constitution) Interesting fact: Benjamin Franklin was the first Postmaster General of the United States!

However, it is precisely that provision of the Constitution that legal academics have used to argue both for and against the Post Office.Proponents argue that the provision signifies that the Post Office’s existence is incorporated in the Constitution and that it cannot be eliminated.Opponents point out that the phrasing implies that Congress has the authority to establish the Post Office, but that this is not a requisite.This is a question to which there is no straightforward solution.

How you can help

  • Nonetheless, it seems evident that if we want to rescue the Post Office, we must move swiftly and decisively. Some options that we can consider are as follows: 1) Invest in stamps. It is first class mail that generates the vast bulk of the money generated by the Post Office. So go out and get some stamps. Alternatively, you may participate in a postcarding or letterwriting campaign to increase your visibility. The following is the website to purchase stamps: Store for the United States Postal Service 2) Write to your Senators and Representatives in Congress. Inform your congressional representatives that you want them to support the Postal Service at this difficult time. (You may find their contact information HERE.) Moreover, request that they vigorously campaign for direct financing in the upcoming coronavirus relief bill. Adapted from the Americans of Conscience Checklist, here is a simple script you might use to communicate with your audience: Hello. I’m calling from and I’d like to encourage you to support emergency financing for the United States Postal Service so that critical supplies and postal election votes may be delivered on time. Is it safe to assume that you will support providing direct financing in the upcoming coronavirus relief legislation? Thank you very much. In order to make your request stronger and more effective, I strongly advise that you include a reason or two in your request. They could include the following: preserving the jobs of nearly 500,000 postal workers (including a significant number of veterans)
  • ensuring that rural areas continue to have access to mail
  • ensuring that the approximately 1 million lifesaving medications that are shipped every year reach their intended recipients (source)
  • ensuring that all of our military personnel, particularly those serving overseas, have continued service (as private companies such as UPS and FedEx have done in the past).
  • Everyone, regardless of where they reside, should have the same access to a valued channel of communication, according to your beliefs.

Alternatively, if you’re accustomed to sending emails to your elected officials using Resistbot, you may SMS USPS to 50409 to do so.It is important to note that for those of you who have never used this service before, once you text them, they will send you a series of questions in order for them to fill out the required fields on your representatives’ websites in order to send them this email: For those of you who have never used this service before: Thank you for taking the initiative!I hope you would consider forwarding this message to others in order to increase awareness of the necessity of rescuing the United States Postal Service.If you enjoy this type of stuff, I hope you will also enjoy: Subscribe to Political Charge and follow the blog on Facebook to stay up to date on current events.

Follow me on Twitter @DHStokyo and Instagram @DHStokyo for updates on my personal life.Congress, Constitution, featured, How to assist, Jeff Bezos, Post Office, US Postal ServiceTags: Explainers, Jeff Bezos, USPS

There’s more than one reason the Postal Service is losing money

President Trump is being listened to.Donald Trump, a former West Virginia senator, entered a guilty plea in a case filed on January 6.Trump will visit a rally in Michigan in April.Trump is considering withdrawing his backing of Brooks in the Alabama Senate race.

Furthermore, it is possible to obtain the idea that the United States Postal Service is unprofitable as a result of its undercharging of Amazon.com.What is it about the United States Post Office, which is losing billions of dollars every year while charging Amazon and others so little to deliver their parcels, that is making Amazon richer while making the Post Office dumber and poorer?″ It was the president who screamed, ″We should be charging MUCH MORE!″ The United States Postal Service’s financial predicament, on the other hand, is not limited to parcel delivery.Because its spending continue to outpace its profits, the Post Office is experiencing issues across the board.The Postal Service was created to be self-sufficient; unlike other federal agencies, it does not rely on money collected through taxes to fund its operations.

More specifically, by charging for mail, it attempts to recover some of its operational expenditures.Sorting and carrying mail is a time-consuming and expensive undertaking.The United States Postal Service (USPS) distributes mail to 157 million homes and post office boxes around the country (including Puerto Rico, the American Virgin Islands, etc.) It has a fleet of 230,000 trucks and other vehicles to assist it in transporting all of that mail.However, this is not the entire story.In addition, the USPS operates a vast retail business consisting of 31,000 post offices and another 4,000 contractor-run mail shops, each of which has its own set of overhead expenditures.The Postal Service only has a few measures at its disposal to keep its overhead under control.

  • Legal and political obstacles stand in the way of its efforts to lower delivery frequency (which is now legislated to be six days per week) and close money-losing post office locations.
  • In accordance with federal law, the great majority of all USPS posts are held by unionized government employees who are entitled to comprehensive job protection.
  • An ill-fated effort by the United States Postal Service (USPS) to install postal counters at Staples demonstrates just how expensive these protections can be – this consumer friendly and inexpensive initiative was struck down by the National Labor Relations Board because it dared to allow Staples employees to sell postage and accept parcels for shipment.
  • The refusal to replace personnel who retire or leave has been the Postal Service’s go-to cost-cutting strategy for many years.
  • There are 300,000 fewer workers working for the agency today than there were a couple decades ago.
  • Nonetheless, the United States Postal Service has 500,000 employees and 600,000 retirees who are eligible for health and pension benefits.

As a result, the compensation expenses of the agency have increased by $2 billion since 2015.The United States Postal Service recorded a $2.7 billion deficit this past year.The reason for this may be found on the revenue side of the ledger.The volume of mail is decreasing.

  • Less mail means less money in your pocket.
  • The United States Postal Service brought in $75 billion in income a decade ago; this year, it brought in just less than $70 billion.
  • In 2006, the amount of mail reached a peak of 213 billion postal pieces; in 2017, it was 149 billion.
  • That is a 30 percent decrease.
  • The number of letters, postcards, marketing mail (often known as junk mail), and periodical publications being delivered has simply decreased as large mailers and the general public have transitioned to electronic delivery.
  • The only exception to this trend is the number of shipments, which has gradually increased in recent years.
  • The leadership of the United States Postal Service feels that transporting more packages is essential to the organization’s existence.
  • However, that appears to be a little far-fetched.
  • Packages continue to constitute a meager part (four percent) of the total volume of mail carried by the postman.
  • Furthermore, it is unclear if the USPS makes any money from the delivery of shipments.
  • USPS income from boxes increased by a stunning 28 percent last year, yet the postal service’s accounting for the costs associated with transporting packages (which are plainly bigger than letters and magazines) is not included in either its annual report or year-end financial statement.
  1. The fact that I can purchase a polyester trombone case online for $20 — and that the United States Postal Service would ship it for a fraction of the purchase price all the way from California to Washington, DC — is amazing.
  2. You’ll have a difficult time finding a private courier who will work for so little money.
  3. Add to this the fact that the United States Postal Service (USPS) has reported that its parcel revenue stream may be negatively impacted.
  4. Over time, the company’s major shipping clients are ″developing the technology that will allow them to redirect tonnage away from the Postal Service,″ the company says.
  5. (Examples include Amazon lockers, Uber delivery drivers, and other similar services.) The business model of the United States Postal Service is ineffective.
  6. In addition, private couriers and 21st century delivery modalities (drones and delivery robots, for example) are posing a significant threat to the company’s operations.
  1. Despite the efforts of its staff and leadership, the United States Postal Service is expected to continue to lose money.
  2. Making the Postal Service sustainable in the twenty-first century will necessitate a complete overhaul of the organization.
  3. Parcel prices set at profitable levels may be an element of that new paradigm, but more broad and comprehensive reform is required if taxpayers are not to find themselves in the position of having to bail out their postal system.
  4. R Street Institute, a free market think-tank in Washington, DC, is led by Kevin R.
  1. Kosar (@KevinKosar), who is the institute’s vice president of policy.
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Why the Postal Service Is Going Out of Business

The United States Postal Service is going out of business.The United States Postal Service is one of the most efficient organizations in the world.Really.However, operational efficiency is insufficient for survival in today’s competitive economy, and it is nearly hard to achieve success in this environment!

The United States Postal Service is a model of efficiency.Consider the value proposition of the United States Postal Service.They send someone to practically every single house and company in the whole United States six days a week in the hopes that there will be a demand for their service, which is marketed for as little as 44 cents each visit!They can transport your handcrafted, signed letter anyplace else in the whole United States for the low price of $.44!They will even deliver your physical document the very following day if you need it delivered within a reasonable distance of your location.

Furthermore, if you are a high-volume client, you may be eligible for even lower prices!The Postal Service, on the other hand, has excelled in the area of operational improvements.It is estimated that literally billions of things are handled every week (about 700 million per day); they are picked up, sorted, and dispersed across one of the most geographically diverse countries on the planet.The distance between Anchorage and Miami is a mind-boggling 5,100 miles, which equates to a meager.009 cents per mile for a first-class letter sent by the mail!In comparison to Pony Express pricing (in 1860, $10/oz and 10 days from Missouri to California), and when adjusted for inflation, you will be hard pressed to find any business that has continuously improved its service while maintaining or even decreasing prices (which are constantly declining when adjusted for inflation).And, whereas AMR is declaring bankruptcy primarily to compel a new union contract, the Post Office has achieved its record improvements with a staff that is virtually completely comprised of union members.

  • The salary for executives is surprisingly modest.
  • The CEO earns around $800,000 per year.
  • CEOs of competing companies earn far more.
  • The CEO of Fedex (where the Post Office distributes more products every day than Fedex does in a whole year) earned more than $7,400,000, and the CEO of UPS (where the Post Office delivers more items each week than UPS does in a full year) earned more than $9,500,000 in compensation.
  • In other words, despite his or her extraordinary effectiveness, the CEO is just one-tenth the CEOs of far smaller delivery firms.
  • The Post Office understands what it has to perform and does it very well in the process.

It understands the ″hedgehog principle″ and tirelessly pursues it to achieve unrivaled performance levels.Despite this, it is prohibited from raising rates, is losing money, and is now intending to eliminate 3,700 outlets and drastically reduce services – such as overnight and Saturday delivery – as part of a comprehensive cost-cutting initiative.The United States Postal Service is fast losing its relevance.Faxing was the first major attack on snail mail in the 1980s, but it was the widespread availability of free email that triggered the major market change that began 15 years ago.

  • Texting and social media are now available through mobile devices, which has resulted in a move away from the use of physical letters.
  • People are writing fewer letters, sending fewer invoices, and even paying fewer bills through the postal service.
  • Have any actual Christmas cards been mailed out to family and friends this year?
  • How many are there?
  • Even the traditional ″junk mail″ has become far less viable.
  • Coupons are being used less and less by consumers, and when they are, they must be much more immediate and compelling, such as those offered by GroupOn, FourSquare, and other similar companies, which are delivered to consumers via email and social media, and are typically accessed through a smartphone or tablet mobile device The market has changed.
  • The Postal Service didn’t do anything particularly inappropriate.
  • The market has changed.
  • For whatever reason, the Post Office’s value proposition is no longer as valuable as it once was.
  • We don’t particularly care if our mail is delivered on a regular basis; in fact, many of us fail to check our mailbox for several days in a row.
  • We don’t give a damn whether a physical letter can get across the nation in a single night since we normally want to connect as soon as possible.
  1. Furthermore, for 99.99 percent of our conversations, we do not require a physical legacy.
  2. We don’t require the services of the Post Office, which is excellent at what it does.
  3. We don’t require much more than a nice horse shoe or a modest offset printing press (or newspaper, magazine or CRT monitor.) This was anticipated by the Post Office.
  4. A decade ago, the Post Office attempted to enter new businesses in record retention (medicine, income, and taxation), automated bill payment, social security check administration, and a host of other opportunities that would provide government delivery and storage services to various agencies as well as under-served users such as the low-income and elderly.
  5. This effort was a failure.
  6. However, these services were not included in its scope, and expanding into new areas necessitated a revision in the organization’s charter, which was not authorized by Congress.
  1. While a result, the United States Postal Service was forced to continue doing what it had always done as the market shifted and pushed it farther and further into irrelevance.
  2. Most company challenges are caused by a shift in the market.
  3. The majority of business failures are the result of failing to recognize a shift in the market.
  4. They do not fail because they are incompetent in the implementation of their plans.
  1. Or because of bad, inattentive supervisors.
  2. Or even because of unions and expensive variable expenses like as energy.
  3. They go into difficulties because they either don’t detect market trends, or for some reason respond to, or take advantage of, them.
  4. It’s not  lack of focus, management laziness or worker intransigence that kills most businesses.
  5. It’s an inability to do what customers really want and value, and spending too much time and money trying to ever optimize something customers increasingly don’t care about.

Winners Shift To their credit, both FedEx and UPS have shifted their businesses along with the market.Both do much, much more than deliver packages.Fedex bought Kinko’s and offers people their ″office away from the office″ globally, as well as multiple small business solutions.UPS offers a vast array of corporate transportation and logistics services, including e-commerce solutions for businesses of all sizes.Their ability to move with markets, and meet emerging needs has helped both companies justify higher prices and earn substantially better profitability.

The U.S.Post Office is the poster child for what goes wrong when all a company does is focus on efficiency.More, better, faster, cheaper is NOT enough to compete.Being operationally efficient, even low-cost, is not enough to succeed in fast shifting markets where customers have ever-growing and changing needs.

Leadership has to be able to recognize market shifts early, and invest in new growth opportunities allowing the company to remain viable in changing markets.The boomer generation will wax nostalgic about the post office.We’ll weave in ″mail″ stories with others about days before ubiquitious air conditioning, when all we had was AM radio in the car and 3 stations of black & white television at home.It will be fun to reminisce.

But our children, and certainly grandchildren, simply won’t care.Not at all.And we better remember to keep the stories short, so they can be related in 140 characters or less if we want them saved for posterity!Links: Winners Shift, Losers Don’t – Amazon vs.

Sears and Wal-Mart comparison How failure to follow market shifts creates failures and opens doors for winners – Playboy vs.Oprah Why missing market shifts creates revenue stalls – indicating impending problems (Microsoft and Wal-Mart featured cases) (Microsoft and Wal-Mart featured cases) How Netflix created a market shift bankrupting Blockbuster How to recognize market shifts and take advantage of them – like Apple does How newspapers called revenue declines ″market softness″ ignoring the shift until bankrupt Recognize market shifts to move investments from historical to new growth opportunities

The Post Office is Failing, and It’s Congress’s Fault

Disinformation must be combated.Receive a daily summary of the most important facts.Sign up for the Mother Jones newsletter, which is completely free.The United States Postal Service is losing money and must make adjustments.

The difficulty is that Congress is refusing to allow it to generate more money, refuses to allow it to spend less money, and refuses to allow it to reduce service: Postal authorities attempted to eliminate Saturday letter service lately, which might have saved the government $2 billion per year, but Congress intervened and vetoed the move.In the previous year, a legislative plan to replace doorstep delivery with curbside delivery, which would have saved the government $4.5 billion, was defeated by a slim margin.Thousands of rural post offices were to be closed, but the idea was scrapped when postal officials determined that the closures would ″upset Congress a great lot,″ Barnett said.However, one of the Postal Service’s most serious difficulties has nothing to do with the delivery of mail.Its financial situation deteriorated in fiscal year 2007, only a few months after Congress approved the Postal Accountability and Enhancement Act of 2006.

Among other things, the legislation mandated that the Postal Service begin pre-funding the health benefits of future retirees 50 years in advance at a cost of about $5.6 billion per year, starting in 2019.The Postal Service’s ledgers indicated a $5.1 billion deficit the year after the legislation was approved.….As a result of this legislation, the Postal Service was prohibited from raising rates above the rate of inflation as measured by the federal consumer price index.Stamps in the United States are now 46 cents, making them among the most affordable in the world’s wealthy countries.I have a strange notion that if the United States Postal Service deunionized, all of its issues would be solved overnight.

  • Republicans would be pleased to provide it with the full amount of funds it required.
  • However, until then, the more difficulties there are, the better.

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Why The U.S. Post Office Is In Trouble – 678,539 Employees And A $9.2 Billion Loss In 2020

As a result of his prospective proposal to eliminate two-day first-class mail service and raise the cost of postage in order to make up for the billions of dollars in yearly USPS losses, the Postmaster General came under fire from members of Congress this week.The United States Postal Service has a big budget, but it also has significant losses, and the problem dates back years.According to the Postmaster General’s testimony before Congress, ″there is no end in sight″ to the agency’s budget troubles.According to a study by the General Accountability Office (GAO), the United States Postal Service (USPS) has lost $69 billion over the preceding 11 fiscal years, including $3.9 billion in fiscal year 2018.

Then, in 2019, a $6.6 billion deficit that had been predicted turned into a $8.9 billion loss.The Postal Service reported a $9.2 billion deficit in 2020, despite the fact that overall revenues climbed by $2 billion (to $73 billion) throughout the year.Package delivery surged significantly (18.8 percent) during the pandemic, whereas first-class mail saw a 4.2 percent drop, and marketing mail experienced a 15.2 percent decline over the period.In other words, a $1 increase in income resulted in a $1.15 rise in costs over the course of the year 2020.It appears that the more mail the Postal Service sends out, the more money they lose.

The United States Postal Service has not been deterred from expanding its workforce despite sustained losses.Last year, the agency hired 163,257 new workers, the highest number in its history, resulting in a net gain of 54,867 new people on the payroll for the year.According to Freedom of Information Act requests made by our auditors at OpenTheBooks.com, the United States Postal Service recruited 40,174 workers in 2019, 38,126 people in 2018, and 26,161 employees in 2017, for a sense of scale.And the check is on its way, especially for those who work for the United States Postal Service and make a lot of money.With a salary of $303,460, Postmaster General Louis DeJoy was the highest paid official in the country.Previously, Megan Brennan, who made $291,650 per year, resigned from her position in October of this year.

  • In fact, the postmaster general makes more than genuine four-star generals in the United States, who receive $268,344 per year.
  • DeJoy and Brennan are surrounded by a large number of people.
  • In 2020, 50 workers of the United States Postal Service earned more than $200,000.
  • Only 29 employees made more than $200,000 in the preceding year, according to the company.
  • In 2020, an additional 5,346 employees, the majority of whom were executives and attorneys, earned more than $100,000.
  • Last July, Congress provided the United States Postal Service with a financial lifeline in the form of a $10 billion loan from the United States Treasury under the CARES Act, sometimes known as the coronavirus bailout bill.

He also claimed that the loan ″will buy time till a liquidity crisis occurs…″ In contrast, the Postal Service continues to be on an unsustainable course, and we will continue to concentrate our efforts on enhancing operating efficiency and implementing other reforms in order to put the Postal Service on a road toward long-term financial stability.″ Critics have said that the service has become ossified and that it is in desperate need of workplace change.According to our research, the United States Postal Service does not have a forced retirement policy, which means that employees can continue to receive high wages for as long as they choose.Approximately 550 workers have worked for the company for at least 50 years; 8,500 have worked for the company for at least 40 years; 76,500 have worked for the company for at least 30 years; and 215,000 have worked for the company for at least 20 years.The United States Postal Service did not reply to our request for a statement.

  • Defenders of the Postal Service would argue that the USPS could rely on its pool of experienced employees to assist create best-in-class solutions that would help to balance the budget.
  • This was attempted by the executive suite in 2020.
  • When they appointed Richard Uluski, who had retired in 2016 after a 36-year career and had been complimented by the then-Postmaster General for ″demonstrating great leadership and delivering outcomes,″ they were hailed as a success.
  • Uluski’s new role is ″Executive Coach,″ with remuneration of $100 per hour and a statutory limit on the number of hours he may work.
  • A spokeswoman for the United States Postal Service responded to our request for comment and gave more explanation.
  • In accordance with the National Defense Authorization Act (NDAA), which was signed into law in December 2019, he (Uluski) is employed with us as a reemployed annuitant.
  • Mr.
  • Uluski is permitted to receive his Postal Service pension while still earning a government salary—with some restrictions, as specified in the contract.″ If the United States Postal Service is to continue, it must decide whether it will function like a private enterprise or like an agency of the federal government.
  • If it opts for the latter, it should be more open about how it uses its funds in the future.
  • Despite the fact that it benefits from its status as a federal agency, the United States Postal Service (USPS) does not participate in usaspending.com, a searchable database of federal spending, contracts, and grants that was created by Senators Barack Obama (D-IL) and Tom Coburn (R-OK) in 2006 to promote transparency and accountability in government spending.
  • The United States Postal Service has similarly refused our requests for access to its vendor checkbook expenditures under the Freedom of Information Act.
  1. Despite several Freedom of Information Act demands to make its spending checkbook visible, the United States Postal Service has so far refused to provide access to its financial information.
  2. In reality, USPS informed OpenTheBooks that disclosing its procurement records would jeopardize the integrity of its procurement process and the privacy of its contractors.
  3. Consequently, while you may be able to monitor your mail in 2021, you will still be unable to track how individuals who handle your mail use public money in that same year.
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Why the Failing US Post Office is Hiking Up Rates…and 9 Surprising Realities to Stop the $50 + Billion Bailout and Make Mail Delivery Great Again

  • In the coming weeks, President Trump will have a historic chance to spare the American taxpayer from a $50 billion bailout. to turn around the postal service, which is in trouble. The existing postal monopoly is a disaster waiting to happen. Why? As a result of. Politicians, labor unions, the Postal Service bureaucracy, and the general public’s hostility and misunderstanding about the value of direct mail, which is employed by thousands of businesses, are all to blame.
  • Here are nine terrifying truths about the United States Post Office. and what has to be done in order to prevent a large bailout from being forced onto taxpayers and consumers. Reality1: The United States Postal Service (USPS) has lost $65.1 billion.yes, billion.in the previous 10 years.right, that’s billion dollars. This year, the Postal Service reports losses of $2.7 billion over the previous year, which is smaller than the previous year’s losses of $5.6 billion. However, it is still a significant loss for which the taxpayers will be held responsible. The enormous, inept, and corrupt bureaucracy failed to make any contributions toward the $6.9 billion in unfunded pension and benefits liabilities that were owed to the government. In reality, the post office has experienced a net loss every year for the past 11 consecutive years. The fact that more individuals are paying their bills online and less people are relying on first-class mail is part of the explanation for this. Another component of the post office’s debt stems from legislation that mandated the post office to prefund retiree health benefits for a period of 75 years in advance. The system as a whole is unsustainable, yet the post office continues to execute things incorrectly. Reality2: Under President Obama, the entire system has devolved into a farcical situation. The Postal Board of Governors is in charge of running the post office. A total of nine members are appointed by the President and confirmed by Congress. In addition, the Postmaster General and Deputy Postmaster General are both members of the board, for a total of 11 members. The governors provide managerial advice to the postal service and have the authority to terminate the postmaster general, among other things. They also provide their approval to rate increases. A quorum of the board must consist of at least six members. As of right now, there are just two members on the board: the Postmaster General and the Deputy Postmaster General. The remaining nine seats are up for grabs. Why? Because of the postal unions, one US senator, most likely Bernie Sanders (I-VT), is preventing any nominations from being made. Since 2010, there has been no new governor appointed. President Trump has nominated three individuals to serve on the agency’s board of directors, including the agency’s former inspector general, but the positions remain unfilled. Allow the United States Postal Service to make judgments based on their own self-interest. In reality, the Board of Governors has made full use of the current situation to its benefit. Because there was no quorum, the Board created three new regulations out of thin air. They were as follows: It is possible to make decisions about hiring, firing, and postal rates without a quorum.
  • It is not necessary to have a precise number of governors in order to make decisions
  • A ″Temporary Emergency Committee″ has been constituted, which grants total authority to the Postmaster General and his senior staff.
  • With no control or responsibility, it has total authority. As a result, despite the lack of a quorum, the post office raised prices on January 20th, 2017, putting itself and companies that rely on the mail to generate sales—and jobs—at risk. And now they intend to raise them in 2018, despite the fact that there is no legal quorum. Third, the Postal Service bureaucracy is antiquated and resistant to reform. The postal bureaucracy has grown costly and inefficient as a result of overstaffing, battling automation, and facing opposition from powerful postal worker unions. They make judgments that are not based on market demand or commercial realities, but rather on what is pleasing to bureaucrats, labor unions, and political leaders. Reality4: The Postal Service is a government-protected monopoly that is in desperate need of competition to remain competitive. Monopolies, and particularly monopoly bureaucracies, are ineffective. Efficiency and advancement can only be achieved via choice and competition. If the automobile industry, computers (including email and texting), and eye surgery were bureaucratic monopolies, their goods would be prohibitively expensive, second-rate, and resistant to beneficial change in the marketplace. As a matter of fact, if the horse and buggy business were protected in the same way that the post office is, we would be riding horses instead of high-powered automobiles. Instead of iPhones in every house, we’d have enormous computers like those used in the 1960s. Instead of Lasik, we would wear spectacles that were approved by the government. The United States Mail Service has attempted to stifle technological advancements and improvements in postal service. Several years ago, the post office attempted to prevent UPS, FedEx, and other private delivery businesses from operating. The government’s monopoly was ultimately defeated, which was good news for entrepreneurs and consumers. The United States Postal Service (USPS) then attempted to restrict email. However, thankfully for companies and consumers, they were unsuccessful. Reality5: Post offices have gone by the wayside and are in serious need of repair, adding to the nation’s mounting financial burden. Post offices all around the country are in disarray. Even the United States Postal Service’s Office of Inspector General has said that the vast majority of facilities around the country violate security and construction codes. And over half of them do not adhere to basic cleaning and maintenance standards. Many buildings have been discovered to be plagued with mildew, pests, or rodents, and others have even had greenery growing within the structure itself. Furthermore, most post offices do not even maintain a consumer complaint record, which means that the vast majority of complaints go unsolved and ignored for long periods of time. Despite the fact that the Postal Service has begun to close post offices located within retail establishments such as Staples, the USPS government employee union is opposed to this practice. Just another example of an inefficient and obstinate bureaucracy that is resistant to change and does not listen to the needs and wishes of the consumer. Reality6: Congress will never be able to govern the Postal Service. The Senate and the House of Representatives of the United States are responsible for most of the dysfunction. Individual members work to prevent the closure of inefficient postal facilities, the recruiting of qualified employees, and the application of technological advancements in the postal industry. The political establishment prefers to appease its labor-union backers rather than allowing the market to function. Reality7: The United States Postal Service intends to raise postal rates, which will be detrimental to thousands of companies. Rate increases of 34-41 percent over the next five years are the Postal Service’s answer to its tremendous debt, and they will take effect without the permission of Congress. It is only a government entity that has the authority to raise rates on its own, without consulting the market, which is an inefficient and expensive action that helps the agency while harming customers. However, postal service commissioners have opted to ignore the law’s inflation rates and instead use their discretion to set their own inflation rates, thus violating the principles of the free market. The following measures are included in the proposal: In addition, the customary rate hikes connected to fluctuations in the Consumer Price Index will continue (with an estimated 2.05 percent annual rise for the next five years)
  • Prices for all ″market-dominant″ mail, including First Class and Standard mail, would be raised by an additional 2 percent as a result of this rise.
  • A further 2 percent surcharge would be applied to mail that does not pay its own costs (which includes many newspapers and magazines).
  • If the post office can achieve particular efficiency and service targets over the following five years, an additional one percent gain will be realized.
  • Once compounding takes place, these rates will add up to a total rise of 34-41 percent, depending on how effectively the post office achieves its objectives in the future. These price rises are not authorized by the 2006 Postal Accountability and Enhancement Act, which is the primary statute that oversees the United States Postal Service and its operations. This massive rise in rates would have a negative impact on hundreds of small and large businesses who rely on direct mail, as well as periodicals and newspapers in general. The increase would be lower than the national average for publications that utilize co-mail and greater than the national average for magazines that use less efficient mailing methods. Already, increased postal charges are having a negative impact on businesses, resulting in the loss of employment and trade. Because of the exorbitant rate rises, less income is generated, and the postal service’s deficit continues to worsen. The current raise is a major job-killer, with the postal service, consumers, and businesses bearing the brunt of the consequences. Final approval of this proposal is expected in March 2018, providing all interested parties the time to fight against this harmful policy that will further harm consumers and the economy. Actuality #8: The Post Office is analogous to Obamacare – Let’s repeal and replace The postal service’s planned reform will result in continuous inefficiency, tremendous debt, and further measures that would harm customers while placing a significant burden on taxpayers. There is a better way to deal with the tremendous multi-billion-dollar debt that the postal service is saddled with. A repeal and replace mechanism for the United States Postal Service (USPS) must be devised, similar to that of Obamacare. It is necessary to have a well-thought-out transition strategy. It is impossible to correct the dysfunction without massive and fast transformation. With the upcoming raise, my clients will send less direct mail, and some will not send any at all. The company will lose potential clients while also seeing a decrease in income from existing clients. The customers″ prospects will not be able to take advantage of their unique offers. They are losing out on a fantastic product. In addition, instead of the post office collecting income, the post office will not get any revenue at all. It’s a bad policy. There will be less mail. There is no revenue. Everyone suffers as a result. Reality9: Competition and choice are the only ways to get out of the quagmire that is the United States Postal Service. The United States Postal Service is harming the American economy and jobs.and it is harming taxpayers. Trump has gotten off to a strong start by appointing three new members to the Board of Governors of the Federal Reserve System. However, there is still more work to be done. Here are some further things that President Trump must take in order for everyone to win: Work nonstop and as rapidly as possible to bring about improvements. Toss out the bureaucracy, the labor unions, and the politicians
  • fight against the projected increase in postal rates
  • fire poor employees and shrink departments
  • appoint staffers and hire employees who understand business, competition, and job creation
  • Altering the dysfunctional regulations, privatizing critical postal activities, ending the monopoly, and putting an end to waste are all possible solutions.

Apart from the fact that the United States Postal Service is on the verge of bankruptcy, its needless inefficiency and misuse is causing harm to company owners, customers, and jobs.There can’t be any stalling.Trump must move quickly to restore postal service to its former glory, or at the very least inform the government monopoly that ″You’re Fired!″ Contact your elected officials immediately and demand that they ″reform the postal service immediately!″ What are your thoughts?Please contact me at

Opinion

At the same time, the Postal Service is on the verge of becoming bankrupt due to the current economic crisis.Because companies account for the great majority of mail sent, Covid’s halting of the economy has resulted in a significant drop in mail flow.We do not yet know how much, but it is possible that volume has already decreased by 30 percent.And, in the process, it may cause irreparable harm to an agency that has been running multibillion-dollar deficits for years and is burdened with $130 billion in unfulfilled employee benefits for the past decade.

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This autumn or winter, depending on how severe the revenue decline is, the agency may find itself with insufficient money and be forced to close its doors for good.In the post office’s two-century existence, this has never happened before or since.So yet, no action has been taken by Congress to save the company.This is partially due to poor decision-making by the leadership of the United States Postal Service in the run-up to the recent $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act).According to an insider who attended one of the discussions, representatives from the USPS and at least one of its unions went to Capitol Hill and briefed select members of Congress in a low-key manner.

Overall, things did not proceed as planned.Only a few Democrats actively advocated for the agency’s assistance, while the Republican Party and President Donald Trump expressed skepticism when a $30 billion bailout was inserted into a House version of the Covid legislation.In the end, the CARES Act provided the Postal Service with only a $10 billion additional loan line, which was not enough.Leadership at the United States Postal Service attempted yet another bailout this week, telling the House Oversight and Government Reform Committee that the service required an eye-popping $75 billion to avoid going bankrupt.A growing number of Democrats are calling for an emergency appropriation for the United States Postal Service, but the Republican Party has remained deafeningly silent, perhaps intimidated by liberal activist messaging that Trump and his party want to bankrupt the post office and sell it to vulture capitalists.In neither of these instances did the post office’s front office openly reveal statistics that may have aided doubtful or just befuddled politicians in their decision to accept the post office’s major request.

  • When the agency experiences a major change in its financial status, it is required to publish a publicly available report with the Postal Regulatory Commission, according to federal law.
  • There are no indications that this has occurred.
  • What politicians and the general public know about the financial health of the United States Postal Service is limited to a few isolated data points that have emerged in news headlines.
  • There’s no doubt that the United States Postal Service is suffering, and it might run out of money and close its doors.
  • A closure of the United States Postal Service, at a time when the economy is already in free decline, may push the country into a depression.
  • Because of the potential economic devastation that may result from a postal workers’ strike in 1970, President Richard Nixon sent in the National Guard to fill in for them.

However, if the agency truly wishes for Congress to release the purse strings in support of a rescue plan, it must lay all of its cards on the table.Postmaster General Megan Brennan should appear on Zoom and make a public presentation in which she gives facts on where mail volume, revenue, and operating expenses are now and where they are headed in the next several years.In order to preserve the post office from short-term insolvency while also aligning the agency’s revenue and costs over the long run, Congress must negotiate a grand bargain for postal reform.Any reform attempt may have to be implemented through the next Covid-19 legislation, which implies that the revisions must be clear and structured in a way that will garner support from both the right and the left, respectively.

  • As an example of how it may operate, here’s a clear proposal that would involve only minor modifications to existing legislation and would distribute responsibility among the major stakeholders: the general public, USPS employees, and the mailers and shippers who pay the USPS’s running costs.
  • First and foremost, Americans want assurance that their mail will assist them in navigating emergencies such as this one, and the United States Postal Service (USPS) requires funding to provide that assurance.
  • In exchange for pledging to transport medications and other necessary goods in the case of a national emergency, the United States Postal Service (USPS) should be given with a $1 billion yearly allowance.
  • Amounts of additional financial assistance are currently not provided to the organization in times of distress.
  • Surprisingly, neither postal law nor Executive Order 13527, the Obama-era guidance on national responses to anthrax and biohazard assaults, impose any obligations on the mail service in a crisis.
  • To their credit, USPS employees have performed well during Covid-19; nevertheless, if the country is struck by another pandemic or anthrax assault, we must ensure that the postal service is adequately equipped and prepared to deliver test kits and medications.
  • As recently as the 1970s, Congress provided the United States Postal Service with an annual public service obligation allocation to assist it in covering the expenses of carrying mail to every American household, no matter how distant the location.
  • The same premise applies here: public safety is a national concern, thus the Post Office should be compensated for the service that the government expects it to perform.
  • Second, the Postal Service need the ability to make changes to the way it funds its retiree health benefits fund, which currently has a $70 billion gap in funding.
  • Despite the fact that it is required to find a method to fulfill these commitments, the USPS is only permitted to invest in U.S.
  • Treasury bonds, which provide dismal yearly returns.
  1. According to a report by the Inspector General of the United States Postal Service, this investment plan almost guarantees that the agency would default on its responsibilities to its employees and that taxpayers will be forced to bail them out.
  2. The vast majority of government pension assets are invested broadly, and the United States Postal Service should be permitted to invest part of the more than $40 billion in its retiree health benefits fund in index funds.
  3. With the stock market at such a low point, this idea — which has the support of those on the right as well as one of the postal unions — has the potential to generate enormous financial rewards if it is implemented fast.
  4. The legislation to accomplish this already exists, and it can be copied and pasted into the rescue package to make it happen.
  5. Third, the United States Postal Service (USPS) should be given the authority to raise its charges a bit more – when the Covid-19 economic depression has ended.
  6. Price increases for most paper mail are now limited to changes in the consumer price index, which is set by legislation.
  1. The amendment of the legislation to allow the post office to raise rates at the rate of the Consumer Price Index + one percent might generate an additional $700 million in income per year.
  2. Price hikes are unpopular with mailers, but when done properly, they are effective.
  3. When the agency’s regulator granted it a 4.3 percent ″exigent rate hike″ in 2015 and 2016, the post office saw an increase in income of $4.6 billion over the previous year.
  4. Congress could also instruct the United States Postal Service to raise the pricing of shipments even higher, something that the USPS is free to do but is often unwilling to do.
  1. Fourth, the postal service should be allowed to decide whether or not to discontinue carrying paper mail six days a week once all of the stimulus checks have been distributed to the general population.
  2. Paper mail demand has once again plummeted, and forcing postal carriers to deliver largely low-profit advertising mail on more than five days per week is financially unsustainable.
  3. The United States Postal Service (USPS) should be allowed to continue delivering packages on weekends as long as it is profitable to do so.
  4. (And Trump has his own reservations.) According to studies conducted a few years ago, removing one day from mail delivery might save the United States Postal Service $1 billion or more in yearly expenditures.
  5. Fifth, the United States Postal Service must lower its compensation expenses even further.

The United States Postal Service spends 80 percent of its budget on paying its employees.Buyouts might be used to accomplish the decrease in costs.Congress may provide $5 billion to the agency, which could be used to provide tax-free buyouts of $50,000 to 100,000 of the agency’s most senior workers.Although laying off 100,000 employees may be more than the United States Postal Service desires, the company may always hire new, and less costly, replacement employees.Sixth, the Treasury should cancel the United States Postal Service’s current debt, which is around $10 billion.

Simply wipe the books clean, because paying these debts is depleting the Postal Service’s financial reserves, which could be used to purchase new delivery trucks and complete long-overdue capital improvements.Because the national debt already totals $24 trillion, taking on this extra debt will not cause significant harm to the public — especially if it helps prevent the collapse of the United States Postal Service.Finally, postal operational expenses tend to rise as a result of the fact that collective bargaining always results in agreements that increase compensation costs.Unions have a right to bargain hard for their members, but they are helped and abetted by federal arbitrators, who almost always rule in favor of the unions over management when a dispute arises.

The statute should be modified to mandate that collective bargaining choices take the financial health of the United States Postal Service into consideration.Years ago, the late Sen.Tom Coburn (R-Okla.) advocated vigorously for this reform, but his efforts were blocked by concerns from postal unions.This move has been long overdue – the United States Postal Service cannot be expected to exist if the majority of its overhead costs are unpredictable, especially in an era of declining letter demand.

All all, these measures would cost American taxpayers only $16 billion, which is far less than the enormous bailouts that have been suggested thus far.And, in contrast to them, they would genuinely close the agency’s structural deficit, increase income, reduce expenses, and reduce its debt load.When compared to the more than $2 trillion in Covid-19 aid that has been authorized to date, $16 billion is a drop in the bucket of assistance.The United States Postal Service is far too large to fail.

In some way or another, we are all depending on it, and as long as the coronavirus is present, we will be even more dependant on it.

The Post Office Is Always Losing Money. It’s Not Its Fault.

The United States Postal Service, an entity that has existed longer than the United States itself, is receiving more attention than it probably likes as the fight about financing and cost reductions heats up.Louis DeJoy, the Postmaster General, began testifying at a Senate committee on Friday and continued his testimony in a House hearing on Monday.The finances of the United States Postal Service, as well as its capacity to distribute mail-in ballots for the November election in a timely manner, have obvious political ramifications.In addition, important publicly listed corporations have a great deal at risk as well.

The post office, of course, is a well-known institution.Every American has had some sort of connection with the United States Postal Service, but that doesn’t make the present fight any easier to comprehend.Here is what investors should be aware of, as well as some recent historical information.

What’s Going On

Speaker Nancy Pelosi brought the House of Representatives back from its August holiday earlier this week in order to vote on a bill that would prevent certain cost reduction at the United States Postal Service.It is also part of a larger attempt by Louis DeJoy, the new Postmaster General, to bring losses under control.Later in the week, the United States Postal Service indicated that the reductions, which included removing mailboxes and mail-processing equipment, would be suspended after the November election.The United States Postal Service had a $2.2 billion loss in the most recently reported quarter.

As a result of the epidemic, the amount of mail—letters rather than packages—has decreased more quickly than anticipated.The United States Postal Service (USPS) received $10 billion in financing under the Cares Act to assist mitigate the worst consequences of the epidemic.Even if more cash as part of a second stimulus package is being explored, the Postal Service has warned that it cannot guarantee that all mail-in ballots will be delivered in time to be counted if they are received close to election day.

Why Does the Post Office “Lose Money”?

There are four major reasons why the United States Postal Service is less lucrative than the logistics corporations with which it competes: As a starting point, there is no reason why the post office should be profitable.It is essentially a federal agency with a duty to provide universal service.Postage to rural America is the same price as it is to send a letter within heavily populated cities, yet publicly listed logistics businesses charge extra for delivery to locations that are off the usual path.Second, the United States Postal Service (USPS) does not have direct influence over the cost of mailing a letter.

For example, in 2016, Congress reversed a 2-cent rise in the price of stamps because legislators determined that the Postal Service had recovered the sales decreases linked with the financial crisis of 2008-2009.The price of a stamp is a matter of political contention.Whether you choose FedEx (ticker: FDX) or United Parcel Service (UPS), the cost of shipping your cargo is just a matter of competition and strategy.In addition, Congress put increased expenditures on the United States Postal Service about 2006, in part because the service was becoming too lucrative.Finally, we can point the finger to the internet: The amount of mail being sent is decreasing.

Managing declining demand in a company’s most profitable business division is difficult for any organization.Growth aids in the absorption of fixed expenses and the recruitment of new, lower-priced personnel to help balance legacy liabilities in any firm.

Cash Versus Earnings

Although the USPS is losing money, its cash flow has become more steady.This is due to the fact that, as previously stated, the USPS has some exceptional expenditures that were imposed by Congress and which artificially reduce earnings.On the surface, Congress directed the Postal Service to set aside $110 billion over a ten-year period in 2006.According to our calculations, this amounts to $11 billion every year.

UPS, on the other hand, recorded an annual free cash flow of around $6.4 billion in fiscal year 2018.The requirement had a negative impact on cash flow until the post office could no longer bear the expenditure.Now, the Postal Service just registers the expense on its books, reducing its bottom line, but without putting aside any money for the expense.

Congress Did What?

It’s a big responsibility, but for what?It was mandated by Congress that the Postal Service prefund its health-care commitments.Aside fro

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