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USPS

An independent agency of the United States government responsible for providing postal service in the United States.

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The time has come to privatize the USPS

  • Feb 26, 2011
Rating:
+1

I take no great joy in this but in my view the time has come to completely privatize the United States Postal Service.  Despite numerous rate increases over the past several years the USPS continues to drown in a sea of red ink.  In fact, the USPS projects a deficit of nearly $7 billion for the current fiscal year!  It is a luxury that this country can no longer afford.

Despite improvements in productivity and some major reorganization the long range outlook for the United States Postal Service is dismal to say the least.  It is a business model that in my view is simply no longer viable.  Volume continues its downward slide as cost conscious individuals and businesses opt for far more efficient and less costly ways of communicating like e-mail and on-line bill payment.  Furthermore, it can now be more expensive to mail a card or letter than to make a long distance phone call which is precisely the opposite of the situation that existed just 10 or 15 years ago.  Times change and the USPS has been unable or unwilling to adjust to the new realities of their industry.  At the same time the USPS has also been unable to cash-in on the numerous competitive advantages it has been granted by being an independent agency of the United States government.  Most observers agree that at the very least the USPS needs to close hundreds of those tiny, inefficient post offices in small town America. You know what I am talking about. This would be a culture shock but is absolutely necessary if the USPS is ever going to turn a profit.  Furthermore the USPS, would have to lay off tens of thousands of workers who sadly are simply no longer needed.  Did you know that the USPS has never had layoffs??  Welcome to the real world folks. 

Now there was a time in the not too distant past when the United States Postal Service had a virtual monopoly on the services it provided.  This is simply no longer the case.  The reality is that the Postal Service's chief competitors United Parcel Service (UPS) and Federal Express (Fedex) are both highly efficient and extremely profitable world-class organizations. They do much more with a whole lot less. The USPS is simply too far behind to ever catch up with them.  And this is precisely why I believe the time has come to take the bull by the horns and privatize the USPS.  Such a move would require a bold and courageous act of Congress but I believe that this is one solution to our budgetary woes that most Americans could agree on.  Hopefully, a deal can be reached whereby most if not all of the current USPS workforce could be absorbed into the new private entity.  And of course an agreement regarding pensions and other benefits will have to be struck as well.  All sides will have to be willing to negotiate a viable and fair agreement.  But the time has come and I hope our leaders in Washington can make it happen. This one move alone could save the federal government tens of billions of dollars in the coming decade. In the long run I believe it will be in the best interests of everyone involved.  The United States Postal Service as currenlty constituted is simply not sustainable.

The time has come to privatize the USPS The time has come to privatize the USPS The time has come to privatize the USPS The time has come to privatize the USPS

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February 02, 2012
I can envision a smaller post office. The convenience of having a mail box on every other block is simply too big to give up. I think that people will opt to keep the post office despite the reduction in volume over the years due to technology.
 
September 10, 2011
But I am confident that the private sector could offer the same services far more efficiently.

I would be afraid...very afraid. A good many calls for privatization of the postal service seem unfamiliar with what the private sector companies, as soon as they are powerful enough, always do…run to Congress to lobby powerfully for special protection, to guarantee profit margins, receive tax breaks and to get red in the face about unions. A private postal organization will do exactly the same. There is no way the postal service, private or public, can save a dime without closing many hundreds of small postal offices and eliminating the jobs. Anyone really think Congress will let that happen? Junk mail could be eliminated, saving massive amounts of labor and money…except business interests would be all over Congress complaining about limiting their free speech…and Congress will respond. Anyone doubt this will happen? --------Before we privatize, might it not be a good idea to find out how that would really happen, or as close as we can determine. The history of government leaders may not be the greatest, but the history of business leaders who attempt to run big organizations is often even more dismal. Just look at the records of the CEOs 15 years ago of GE, Kodak, Xerox, IBM, GM, AT&T and many others. Plus so many of the current ones (Would you want to stand next to a bank CEO on a hot, humid day?) -----------My view: Reduce postal service reasonably (no weekend delivery, no twice a day deliveries, increase significantly junk mail costs, deliberately drive more business deliveries out of the postal service and into the existing private postal carriers, try to eliminate at least a few small post offices annually, and shape what remains as a government postal service for residence and small business deliveries only. And accept this reduced red ink as the cost of a basic responsibility that government has, like police, fire, street repairs, clean water, providing basic health services, national security, etc. --------Would it work? I don’t have the slightest idea. But I’d like to see a lot more detail, even speculative, before I’d sign a petition to try this or just privatization. Still, I admit that turning over to Halliburton a nuclear carrier task force to run might have some cost advantages, too. All we need do is look at how well our private sector contractors and mercenaries performed over the years in Iraq. The postal service should be child's play for them.  : - )
September 10, 2011
Certainly your proposal has considerable merit and would be worth considering. But however you slice it we probably have around 200,000 postal workers on the payroll that we simply no longer need. Market conditions change and the Postal Service has been notoriously slow in responding which has only made matters much worse.
 
March 11, 2011
ha, I would agree with this if fedex and UPS and the USPS would all agree to send letters cross country for 50 cents, or whatever is profitable for all 3 parties. Then there'd be competition...Still I have to wonder if competition wouldn't increase prices by creating duplicate infrastructure....not sure...
 
March 10, 2011
I know it is a big step but $7 billion per year is a lot of money. We have to begin to rethink lots of programs and services if we are ever going to get our financial house in order.
 
March 10, 2011
I use mailing services a lot and USPS is my favorite to use since it's the one that's easiest and most comfortable for me to use, and I hate to see it in such a dismal state. I see your point though. Privatizing seems like such a huge step. I've gotta wonder how that would even start to happen. Great, thought provoking review, Paul!
 
March 10, 2011
I am well aware of your concerns. Perhaps under the new arrangement people living in really remote areas would only get pickup and deliveries once or twice a week. I am quite certain it could be worked out. What I do know is that the current system is unsustainable and needs to be dramatically overhauled.
 
March 10, 2011
I couldn't agree more, but I sometimes struggle with the comparison to FedEx and UPS, and that's largely b/c what those companies do is NOT entirely what the USPS does. If FedEx and UPS were taxed to deliver EVERY piece of mail, then they probably wouldn't be in the same profitable boat, though I firmly believe they could engineer a program that would work at, minimally, the same level of efficiency that one gets with the USPS. But I strongly agree: it's time for a serious re-boot of the Postal Service.
 
February 26, 2011
It is very likely that ordinary paper mail will soon be a thing of the past because of emails and such But isn't UPS only a parcel service ? do you think anyone could make a profit from delivering ordinary mail ?
February 26, 2011
You make a valid point because USPS is required to make deliveries everywhere no matter how remote. But I am confident that the private sector could offer the same services far more efficiently. It would be interesting to see who would make bids if the decision was made to privatize.
 
February 26, 2011
Great review, Paul! I completely agree. The USPS is definitely stumbling into the future. On the positive side, they support new technology like Stamps.com. On the negative side, they don't provide any economic incentive to use the new technology. The USPS has huge costs in designing, printing, inventorying, storing, and selling physical stamps. Self-printed stamps like Stamps.com eliminate all of these costs. However, the USPS still charges Stamps.com the price of the full stamp, so Stamps.com must charge their customers a premium in order to make a profit. Therefore, very few people utilize Stamps.com, because of the increased cost. If the USPS would make it cheaper for the consumer to use this type of technology, they could reduce their own costs and become a more efficient organization.
 
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Paul Tognetti ()
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I guess I would qualify as a frustrated writer. My work requires very little writing and so since 1999 I have been writing reviews on non-fiction books and anthology CD's on amazon.com. I never could … more
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Wiki

The United States Postal Service (USPS) is an independent agency of the United States government responsible for providing postal service in the United States.

Within the United States, it is commonly referred to as the Post Office, Postal Service, or U.S. Mail.

The United States Postal Service employs over 760,000 workers, making it the third-largest employer in the United States, after the United States Department of Defense and Wal-Mart. Its employees deliver mail at an average yearly cost of $235 per residence as of 2009.

The USPS operates the largest civilian vehicle fleet in the world, with an estimated 260,000 vehicles, the majority of which are the easily identified Chevrolet/Grumman LLV (Long-Life Vehicle), and the newer Ford/Utilimaster FFV (Flex-Fuel Vehicle), originally also referred to as the "CRV" (Carrier Route Vehicle), as shown in the pictures below. In an interview on NPR, a USPS official stated that for every penny increase in the national average price of gasoline, the USPS spends an extra $8 million to fuel its fleet. This implies that the fleet requires some 800 million gallons (3.03 billion liters) of fuel per year, and consumes an estimated fuel budget of $2.4 billion, were the national gasoline price to average $3.00. Some Rural Letter Carriers use personal vehicles. Standard postal-owned vehicles do not have license plates. These vehicles are identified by a seven digit number displayed on the front and rear.

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