Tuesday, September 06, 2011

The Internet Killed the Postman

So the US Postmaster General, Patrick Donahoe, said if Congress doesn't act soon - that the US Postal Service will cease operations in the early part of next year.


It seems that they're going "miss" a $5.5 billion payment this month (to fund future retirees healthcare); and Mr. Donahoe is asking to fire 120,000 workers; not replace 100,000 more jobs (due to attrition/retirements); close 3,700 post offices (out of 36,500); close 300 (out of 600) sorting facilities and stop Saturday delivery - in an effort to stop hemorrhaging an estimated $10 billion this year. That's on top of the over $20 billion in losses over the past 4 years.

The big problem for Mr. Donahoe, is that he needs to get congressional permission to do any or all of the proposed cuts.

Yeah, good luck with that.

We can't even get the Congress to agree on a budget for the country, let alone one government agency!

So why is the agency losing so much money? Well, as I said above, volume is down 22% in just the last 5 years - and the USPS says it could drop another 35% by 2020. The real elephant in the room is the people who work for the post office. Or, rather, their retirement and health benefits.

Labor costs make up 80% of the entire post office budget. Compare that to 53% at UPS and 32% at FedEx - and well, it should be obvious that some of those folks have to go.

As usual, the unions are screaming bloody murder at even the mere mention of layoffs. You see, the postal workers and their unions have a "no-layoff" contract. All 653,000 of them (down from 900,000 ten years ago). The source of all the red ink is mainly due to a 2006 law requiring them to pay an average of $5.5 billion annually for 10 years to finance retiree health costs for the next 75 years.

Ummmmm.... yeah.

So yes, online statements, online bill pay, email, free video chat with relatives a world away, instantly accessible catalogs and daily specials - all these modern conveniences are spurring the decline of printed (and mailed) spam documents.

And, even though the postmaster has been beating the drum since (at least) March 2010; Congress' inaction has now come back with the potential to bite it in the butt - and all during an election year run-up.

I'm sure no one wants to tell his/her constituents (especially those with rural populations) - "Oh, by the way - because we were caught up in political wrangling, posturing and inaction - the Post Office is dead. I sure hope you have one of them thar' interweb thingies..."

It's time (again) - to call, write, email, Skype, social media, tweet and bug the hell out of your Congress Person to get off their butts, take a man pill, and work out a way to keep the Post Office from going away. 

Some numbers (from back in 2010):



jonro said...

It's a problem. We need the services that the post office offers and the post office needs its infrastructure. Imagine saying that not too many cars drive through Podunk, Nebraska, so we'll just close the roads to the town. On the other hand, we need it less than we used to. Ten years ago, all of my bills were sent my first class mail. Today, nearly none of them are mailed. We need to work out a solution for the post office. Your town may only have one or two fires a year, but you still need a fire department.

It's ironic. I used to collect stamps (stamp collectors are a profit center for the post office) and now I print stamps with a Dymo label printer. I haven't bought stamps from the post office in a long while. The post office may need to consolidate and cut deliveries to five days a week, but it must survive.

Bob Cusick said...

Well said! I totally agree. It's a mess - but like most thing, if we just ignore it - it will get worse, not better. But we DO need to work it out - there are millions of people that depend on the USPS to keep in contact with the outside world!

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