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  • Postal Service: Down the Chute?

    Will the last one to leave the post office please turn out the lights?

    Things are looking pretty grim at the Postal Service. In a report made public today, the U.S. Postal Service (USPS) proposed cutting 220,000 positions, leaving its workforce—which once ranked with Indian Railways and the People’s Liberation Army as among the world’s largest—at 425,000. Some 120,000 of these cutbacks would be through layoffs, which are barred under current union contracts.

    The reason for the cutbacks is clear: The Postal Service is running out of money. According to the USPS report, which was made public today in The Washington Post, the Postal Service is on the “precipice of insolvency.”

    That’s no exaggeration. The recession has hit the postal service hard, accelerating a long-term trend away from mail delivery and toward electronic communications. The numbers are stark: USPS mail volume has declined by 20 percent over the past four years, during which it has lost $20 billion, including over $3 billion in the last quarter alone. Even after the overall economy recovers, these numbers are not expected to rebound: Once business moves over to the Internet, it tends not to come back.

    There’s no guarantee that the USPS can be saved. In the not-so-long run, paper mail delivery may be as dead as the singing telegram. But whatever its future, cutbacks are a financial and business necessity. Postal management knows this: In addition to the workforce reductions, it wants to drop out of the expensive federal health and retirements systems and drop Saturday delivery service and has targeted over 3,600 post offices for closure.

    To achieve the needed changes, however, action by Congress is needed. First, approval is needed to break the union “no layoff” contracts (if USPS were a private company, such action would be the first step taken by a bankruptcy court). Congress should also eliminate current laws that restrict the closure of post offices and that mandate six-day per week service.

    In the past, efforts at such reforms have been stymied by political pressure to preserve the postal status quo. That is no longer possible. The world has changed, and the postal service must change with it. Congress should not stand in the way.

    Posted in Featured [slideshow_deploy]

    28 Responses to Postal Service: Down the Chute?

    1. Bobbie says:

      really! wherever the government impedes for government's benefit, remove.
      just a suggestion, how about having Saturdays open a full day and dropping a m-f because most people work m-f and Saturdays aren't open long enough for full time m-f patrons? no biggie? just a suggestion none the less.

    2. J. Alec West says:

      On August 3rd, I retired from the Postal Service. And, I brought in my own “designer” retirement cakes for a farewell party. One of those cakes showed a cruise-liner sinking, bow first. The name of the ship shown on the stern was “USPS TITANIC.” Floating away from it was a wooden plank. On it, a rat (me) deserting the sinking ship said, “Boy, that was close.”

      I honestly didn’t know I was THAT close (grin). But any postal worker with half a brain knew this moment would come. Sadly, it didn’t have to come. USPS should have known years ago they were a business model in sunset mode. And they should have had a scenario of gradual cuts in place so this moment of reckoning would have been easier to bear on the employees I left behind. But sadly, USPS lacks foresight and has been in denial for far too long.

    3. John G says:

      USPS should have reduced normal mail delivery down to 2-day service (Tu, Thu) 2 or 3 years ago — once it was clear that more people were moving their communications online, and only have priority overnight and things of that nature go out each day. But since Congress holds the strings, it gets political. This is a precursor to how our healthcare system will be and any other system that may end up subject to political whims.

      • J. Alec West says:

        John — As the Postal Regulatory Commissioner once said, "Days don't cost money. People do." With mail volume on the decline, USPS shouldn't distance itself from its customers by cutting back delivery days. They should distance themselves from our wallets by getting rid of excess employees and enlarging the carrier routes to compensate for diminished mail volume. The Postmaster General is, quite frankly, an idiot to suggest decreasing delivery days … and an even worse idiot for not mandating a steeper decline in workforce numbers.

        So now, in 2011, we have a crisis situation. If USPS had put into place a scenario of "gradual" layoffs that equaled the decline in mail volume, this crisis would have never materialized in the first place. No foresight, pure and simple.

        • John G says:

          "USPS shouldn't distance itself from its customers by cutting back delivery days"
          Haven't people have already distanced themselves as evidenced by their less frequent use of the service? Any changes USPS makes would be to simply align with that new reality, no? By reducing delivery service you reduce your labor costs.

          An alternative to having uniform delivery (Tu and Thu everywhere) would be to have a rotating delivery schedule, similar to how garbage pickup is run (if it's run the same way where you live as it is where I live). Garbage pickup is once per week. The exact day is based on where you live. 1 small crew handles pickup for whole city. Reduced labor force = less cost.

          • J. Alec West says:

            John G. — The Postal Regulatory Commissioner and the GAO have studied the Postmaster General's plan to cut back to 5-day delivery. And they reason they don't like it is because, according to them, Donahoe's "math" is wrong.

            Let me use a simile. If you ran a burger joint and your sales of chocolate shakes went down 50%, would you only make chocolate shakes 2 or 3 days a week? Or would you decrease the number of employees assigned to make chocolate shakes and simply make fewer shakes?

            Again, as the PRC commissioner said, "Days don't cost money, people do."

            USPS has already cut staffing considerably. But the cuts they've made have nothing to do with decreased mail volume. They're based on the notion that automated mail processing has replaced the employees that were previously needed to process the mail by hand. In short, USPS has been making cuts for "one" reason when they should have been making cuts for "two" reasons.

            In the mid to late 1980s, when the first online services (Compuserve, et al) started to make a dent in first class mail volume, USPS should have realized that a paperless future was on the way. And at that point, they should have put in place a policy of gradual staffing cuts in place that equaled the decline in mail volume. And mind you, this was "before" the first automated machines even ended up on the workroom floors in processing centers. Instead, the mindset in upper management was to "scoff" at the coming personal computer revolution as if it was merely a passing fad. Here's an example of what I mean from my own career.

            When I was hired, I had a rather primitive (compared to now) personal computer. Internet providers had not yet surfaced in my metropolitan area. But, I did have 2400baud dialup modem access to two online services – GEnie (owned by General Electric) and QuantumLink (now known as AOL). Through them, I was communicating with people all over the world almost instantaneously. In any case, when I was hired, my hire-group was given speeches by local department heads. When the marketing rep finished his speech, he called for questions. I asked him, "Has USPS considered getting into the electronic mail business?" This was a valid question to ask back then – during the pre-internet years. The rep belly-laughed and replied, "Ha ha, we don't see a future in it."

            USPS became so infatuated with their new automated toys in the early 1990s that they were certain all their problems could be solved this way. They were wrong. Automation only solve problem #1, not problem #2 – which has been given lip service by upper management for an awfully long time.

            BTW, here's an idea I've toyed with regarding mail delivery. The carrier's union would HATE this (grin) but it's practical. My ex-wife used to work for Jantzen (making swimsuits and other fashions). They gave employees a choice of either being paid an hourly wage or being paid for work by-the-piece. The fastest workers always chose piece-work because they could make more money.

            So … why not, instead of laying off carriers, pay them by-the-mailpiece they deliver? With our modern automated equipment, we can accurately predict mail-volume route by route. On days with high mail-volume, they make more. On days with low mail-volume, they make less. As overall mail-volume diminishes, carriers would be finishing their routes early. And THAT is the time to "re-route" the delivery area and layoff unnecessary carriers – leaving the remaining carriers with a route that will provide them a living wage. Then, when overall mail-volume takes another nosedive, simply repeat the process of re-routing and layoffs.

            • John G says:

              "pay them by-the-mailpiece they deliver?"
              Because they can't control how much mail they get to deliver. In the example with your wife, if I can increase my productivity (something I can control), then I earn more money. As a mail carrier, I can't increase the number of mail items I can deliver, therefore, IMO, that's not a fair metric to base compensation on. Perhaps a better metric would be mail pieces delivered per hour? I can control the speed at which I deliver mail, and since the volume would already be known, it should be fairly simple to calculate the rest. Those that are the most productive will keep their jobs the longest as mail volume continues its declining trend.

            • J. Alec West says:

              I wrote: "pay them by-the-mailpiece they deliver?"

              You replied: "Because they can't control how much mail they get to deliver."

              Exactly (grin). The customers are the only people who can control the day to day volume. That way, as overall mail volume diminished, pay would diminish – until it came time to re-route the delivery area to create fewer routes and lay off excess workers.

              The problem with "mail pieces delivered per hour" is that a number of carriers are disabled (some, disabled vets). A "mail pieces delivered per hour" scenario would scare the beejeezuz out of management – especially in my former office. A few years ago, they were taken to court by a worker disabled in a horse-riding accident (like Christopher Reeve). They fired him – even though he was capable of doing light-duty work. He sued and won nearly 2 years of back pay/benefits, a $300,000 punitive award, and reimbursement of his attorney fees and court costs.. The ADA (Americans with Disabilities Act) is not to be taken lightly – even in the private sector.

              Paying strictly by the mailpiece delivered (with no time constraints attached) would pass ADA muster.

            • John G says:

              Part of this issue is the fact that USPS is public and is subject to more rules and regulations than a private business would be, but if I'm thinking about this from a profit-maximizing (or at least loss-minimizing) POV, I need to get the most production out of each worker I can, which means I have to set up the proper incentives to achieve that. If your compensation metric is something the worker can't control, then that is a crap metric. It's like paying a Customer Service Rep based on the number of calls that come into the call center. No one in their right mind would set up a system like that because all you end up with are unhappy, unproductive employees. Those types of employees lead to unhappy customers which lead to fewer customers which leads to no more company.

              I don't know how your ADA example is relevant. If I have a disabled employee who can't fill the role I primarily need him to fill, then I find him a suitable alternative. If paying people based on their value-add to the company (aka productivity) "scare(s) the beejeezuz out of management", then I find new management. As a business executive, my job is to make my company as profitable as possible, not to worry about the emotional effect such a positive change would have on my managers.

    4. Commonman says:

      UNIONS are History! Only a matter of time and I can't wait!! Then the USA will be able to compete with anyone in the world with highly efficient operations.

      • Retired Termite says:

        The government loves people like you, you are blaming the unions and not the government. I have been a union carpenter for 30 years and I make a good wage, and compete with the non-union every day of the week. We win 60 to 75% of the bids because our price is better and having educated employees. Our safety record is much better then the non-union and we know if we don't make our contractors money we will be out of work. In Iowa it might be different. I know when I go to the doctor or hospital I have insurance and a lot of the non-union don't, so where lies the problem? The GOVERNMENT. When they want to take your Social Security is it the doctors fault? No, it's because the politicians stole the money out of the fund and to pay there buddies off and other countries. They love it when we point fingers at each other instead of at them. Do you remember in the Nineties when the postal service gave all the higher up big bonuses and the next month raised the price of stamps? It's funny how that works.

        • Corky W. says:

          The preceeding was a paid political announcement. The problem is you union guys are stuck in a rut. Your union bosses use your money to go out and "pay off" contractor's to get the jobs. Just because you work for a union does not make you smarted than me, just the opposite is true. You pay them dues and they get to have the fun on your dime.

        • Marvin B. says:

          How much of your Union dues goes to the liberal politicians re-election campaigns, whether you like it or not, do they ask you first if you support that candidate? The big union bosses are the only ones who benefit from this system, to support their extravagant lifestyles.

    5. Commonman says:

      I have been posting comments, but since they are not pro Union…..you are not posting them??? Sounds like union control to me.

    6. Chuck, Mailhandler says:

      You CONsevatives keep missing the two real reasons the USPS is in dire financial straits. 1) The $5.5B/Yr. payment required to pre-fund retiree health benefits. At the risk of sounding like a broken record/CD, no other federal gov't agency, no gov't lower than federal, and no private company is required to do this. This is pre-funding 75 years of retiree health benefits in 10 years. 2) The massive overpayment into both the CSRS ($50-75B) and FERS ($7B) retirement fund. Correcting these overpayments (reminding all once again, this is NOT, I repeat NOT taxpayer money, but USPS money) and tranferring these funds to the retiree health care fund will take care of these financial problems. Period.

    7. Jeff, Illinois says:

      There's more to this story . .

      Around 2006 . . for some obscure reason a bill was passed mandating that the retirement benefits of postal workers be secured for many many years in advance and now those funds are being attacked for other purposes. That's at the root of this issue. The workers are being unfairly dealt with.

    8. Gunther Rust says:

      Typical union busting crap. Postal system is in financial trouble because CONGRESS requires it to FULLY fund all retirement benefits – the only business in the country that is required to do this. So how can the postal System run as a business when Congress keeps sticking it's nose in where it doesn't belong.

    9. Stirling says:

      Annother example of Failed Big Government. Privatize the postal service and watch it actually turn a profit.. Well obviously it won't happen under the current administration, but maybe after 2012 we can have a cleaning of the government's failed programs..

    10. Gayle says:

      Pretty sure no one is weeping over this….I think the USPS has shot itself in the foot on multiple levels: poor customer service, inability to change with the times, etc. Were the USPS a non-government aligned entity, it would advance with the times to offer expanded services…..when was the last time you purchased stamps?

      On another note, I dare say that the USPS surly attitude (not all representatives of course) has prompted customers to seek friendlier, more efficient pastures, especially for shipping packages, I am willing to pay private competitors a bit more….the convenience, and service are worth it. What has been the incentive to change?

    11. Mike, Wichita Falls says:

      Just because the Constitution says Congress has the power "to establish post offices and post roads" doesn't mean they have to do so especially when it's helping break the Treasury and is outdated. The left loves to tell us the Constitution is a "living, breathing document" that must adjust with the times. Well, the USPS is just another part of that adjustment.

      • Bobbie says:

        Mike, do you really feel comfortable with all personal information communicating through electronics that has a rationale for hacking fraud amounting to a variety of endless problems? where "people" are in control but who knows who and how many and what's what? Including the potential chance regarding electro magnetic pulse?

        The postal service shows much more integrity and respect for personal information. We hope the postal service survives and both will pursue…

    12. texac says:

      Cut workforce, M-W-F delivery, stop subsidized junk mail

    13. Paul says:

      The US Post Office does offer some good services. Priority mail and registered mail are quite good and are fairly priced plus very useful. The USPO needs to simplify its offerings to just three – First Class, Priority Mail, and Registered Mail. This would eliminate a massive amount of junk mail and the personnel needed to sort and deliver it and allow the USPO to focus on value added offerings.

    14. jcc says:

      The Feds could have helped every year by requiring all IRS forms still be mailed by April 15..The revenue lost on state and federal forms e-filed——- think about the amount lost.

    15. RennyG says:

      There goes part of the 2+trillion that the house gave him, "TO THE UNIONS!!!!!" "VOTES!!!"

    16. Hazel Moon says:

      The Union will not all the PO to eleminate the 200,000 employees that it does not need. The money is needed for the Union benefits to workers. The PO has been HiJacked by the Unions!

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