The battle lines have been drawn and the expected alliances have been formed, but both sides acknowledge that the assets (if there are any) of the dying patient known to us as the U.S. Post Office (but whose epitaph will read: "Dead Letter Office") is at stake. The family gathered for the preliminary reading of the last will and testament include the politicians and their allies, with the Republicans and taxpayers on one side and the Democrats, their hired hands in the media and in the unions on the other. The losers under most scenarios that can play out are the management, employees and customers of the postal service. The left-wing on-line magazine
Slate , sums up the whole problem nicely (with a little editing on my part) in
"Deliverance: The U.S. Postal Service must make massive changes if it is going to survive."
America's postal service is [seemingly] elegant, efficient, even amazing, given the enormous size of the country and the low cost of stamps. But the U.S. Postal Service is a hulking, foundering, money-hemorrhaging bureaucracy. A government watchdog has deemed the whole business unsustainable. . . . It raises the question: How is the postal service going to be viable as mailed letters become increasingly obsolete?
One thing is for sure: The fiscal situation at the USPS is bad—really bad. According to its most recent quarterly report, the USPS lost $3.1 billion between April 1 and June 30. Add that to billions of dollars in losses racked up since the recession hit—the USPS has been in the red for 18 of the last 20 fiscal quarters. It has also amassed tens of billions in unfunded liabilities, mostly in pension [$18B] and retiree health-benefit obligations [$49B].
The problem is not mismanagement [??? "We said, 'What's your 10-year plan?' " . . . "They didn't have one." ???]. The problem is that the USPS has an enormous, expensive physical and [unionized] human infrastructure. It operates more than twice as many U.S. outlets as McDonald's. It runs the largest vehicle fleet on Earth. It has a [extremely bloated] staff of nearly 600,000, despite considerable reductions in the last decade. To pay for all those people, trucks, and buildings, the USPS needs to handle a lot of mail.
The catastrophe is twofold. The USPS is going to need a higher debt limit or big changes pronto, or it is going to run out of cash. Then it needs significant—maybe even radical—changes to return it to fiscal stability. Indeed, a congressionally ordered Government Accountability Office report from April 2010 starts with the blunt line: "USPS's business model is not viable due to USPS's inability to reduce costs sufficiently in response to continuing mail volume and revenue declines." The "business model" is not "viable." Changes are necessary. So what might those changes look like?
Most of the press coverage talks about short-term solutions which will ultimately result in the termination of government-distributed "snail mail."
Tim Pawlenty,
The Cato Institute, and
Rich Geddes favor privatization of the enterprise (with and without employee ownership
i.e. ESOP), but that will guarantee that the American taxpayer will get soaked since the largest part of Post Office assets were paid with tax dollars and retirement and union termination contract clauses will likely have to be honored by "you guessed it."
USPS management has a plan that will
downsize the service by eliminating 220,000 employees, stripping the unions of collective bargaining power, closing thousands of facilities, mostly post offices, freeing itself from unrealistic postage pricing rules and (take a breath) abandoning government retiree health and defined pension plans. Yeah - that could work - but I cannot see the regime and the its unions buying into that fairy tale. If there is a buy-in, the Postal Commission will end up granting the same excessively enhanced reduction-in-force (RIF) provisions already given to APWU to all other postal unions. My guess is that the "All Bailout -- All The Time" Obama will suggest a massive infusion of freshly-printed cash to "save" 220,000 postal jobs in his "jobs" speech after Labor Day.
Notice that the solutions addressed thus far recognize that the government cannot run "for-profit" enterprises and, despite stated desires to make the Post Office self-sufficient and self-funding, no USPS administration has ever attempted to break the USPS umbilical cord - until now. Sadly, that will not happen because of a deep-seeded need among career politicians and bureaucrats (the no-risk crowd) for government protection.
If I am correct, the U. S. Postal Service or whatever new name (not likely the Dead Letter Office) or form it will take, will rollback to the protective bosom of Mother Gov. The
good news available for U.S Snail Mail is that 30% of its customer base has drawn the line in the sand against electronic mail and another 55% appear to be willing to get correspondence from both physical and electronic sources. Even more surprising is the public's attitude toward
transactional mail. Studies show that
"although mail volumes have been declining rapidly in the US, 71% of US consumers still feel more secure holding an official paper copy of their bills and statements, and that to push them forcibly into digital channels could risk losing those customers altogether." This flies in the face of society's increase in computer literacy and the attitude prevails despite pressure from most companies that want to save costs by sending billings and receiving payments electronically.
A behemoth the size ot the Post Office has to select a new business model that permits "dancin' with the one what brung ya." That means continuing to physically deliver hard-copy correspondence, advertising and parcels to the addressee. The paradigm shift that has to happen is the removal of the long-distance hauling of mail for ridiculously low prices; actually the secret probably involves the elimination, for all intents and purposes, of the hauling of most paper correspondence to any and all locations throughout the country. The change also must permit delivery of mail electronically to those who want such service.
The business models have been developed to deliver mail electronically and front end data capture systems have been perfected to permit handling of electronic document files. The USPS already has Optical Character Recognition Scanners which possibly could be converted to document reading and conversion.
Zumbox, a relatively new start-up that likely would be willing to lease its technology, has launched a paperless electronic postal mail service which will encourage advertisers and transaction mailers to deposit their correspondence into electronic mail boxes available for every address in the United States.
The mailing party pays and access and registration are free to end users -- but the Zumbox system does not provide for delivering physical mail. In a limited geographic area,
Earth Class Mail offers scanning and forwarding of mail electronically, but their service costs are in addition to other shipping cost and they must first receive your mail, open it, then scan it for your benefit and of course they then have the opportunity to read your mail. Earth Class Mail service is aimed at business customers with large mail volumes.
The New Post Office, as I see it, would provide brick and mortar locations where customers can register their address and specify service levels, compose electronic mail, scan physical documents and even chat with a favorite postal employee. The New Online Post Office would also provide all of the above services except visiting time, since postal patrons would have to do all the work themselves.
The intriguing possibilities for customized mail service include (1) a mechanism for banning junk mail by source, since all mailers would have electronic I.D.s; (2) the ability to lower your mailing costs by doing the scanning and preparation work yourself; (3) the option to upgrade information received electronically by purchasing a filing cabinet service which can organize and classify your mail receipts; and (4) most importantly, the joy of receiving printed paper correspondence delivered into your real mailbox -- if you so desire.
There should be no doubt that the Post Office would operate at a lower cost and much more efficiently. There would be fewer brick and mortar post offices needed, less route trucks would be required, physical deliveries could be computer scheduled to run as often as needed. Instead of sorting, stamping and hauling mail, time would have to be taken to print scans onto paper already in an envelope ( like your W-2). Do I believe any of this pipe dream ? No, the New Post Office would still be run by the bureaucrats and manned by worthless union thugs armed in advance with a mountain of work rules and an "I get mine first" attitude.
Meanwhile . . . back to the drawing board!