The U.S. Postal Service Nears Collapse | Hacker News Reader

The U.S. Postal Service Nears Collapse

businessweek.com

126 pointsjedwhite135 comments

Every day I go to my mailbox and put 98% of its contents directly into the recycle bin.

I have followed all the recommended steps to remove my address from various mailing lists.

The USPS is a garbage-spamming environmental disaster that solicits money from companies to do direct marketing, offers no opt-out features, and every day drives tens of thousands of polluting vehicles to stuff unwanted paper into mailboxes across the country.

In addition to its monopoly, the post office is one of the most unpleasant retail locations anyone could imagine -- filthy counters, grudging employees, and long lines.

Since "first class" mail takes between 2-12 days, there is no reason to have first class mail delivered every day. Doing so is just a handout to the employees' unions. There may be a case to be made for more frequent delivery of expedited mail, but this would take a fraction of the number of vehicles and personell that the current system does -- and with less reliable guarantees, nearly identical prices and worse service than UPS, I always choose UPS over USPS for parcel shipment.

It's fine to be nostalgic about the pony express, but the USPS needs to either be phased out or drastically scaled down, and laws forbidding other companies to deliver standard mail must be changed.

I have pretty much the opposite experience with USPS.

Got almost no spam, maybe 10-20% of my mail, mostly sent by local businesses and free local newspapers.

It's not a monopoly. Forgot about UPS, DHL and FedEx?

Their employees are usually very hard working and have to deal with all kinds of assholes.

Plus, it's much cheaper than their competitors.

The USPS holds a monopoly on non-urgent mail.

http://en.wikipedia.org/wiki/United_States_Postal_Service#Un...

You are correct that non-urgent mail (what the USPS sells) is cheaper than urgent mail (what their competitors sell).

As someone else pointed out, the USPS has a monopoly on non-urgent mail.

As for spam, you must be fortunate that you have not managed to wind up on spammers' lists. If you donate to charity that's an easy way to get on the lists, and some of the spam is just unnecessary garbage sent by business I use b/c sending it to everyone (via the USPS) is cheaper than implementing an opt-out policy.

I forget the URL, but I opted out of junk mail years ago via the Direct Marketers Association web page. I think that's the name. After a couple of months, my dead tree spam fell to a trickle.

It's not perfect. I still get local grocery and retail circulars that I could do without. But at least the daily credit card offers stopped, which cut down the volume dramatically.

If someone would drop a bomb on Geico's direct marketing arm, I'd be a happy camper.

I did this too, as well as a couple of extra precautions, and I did not notice any decline in the junk mail at all.

> It's not a monopoly.

From http://en.wikipedia.org/wiki/United_States_Postal_Service

Article I, section 8, Clause 7 of the United States Constitution grants Congress the power to establish post offices and post roads, which has been interpreted as a de facto Congressional monopoly over the delivery of mail. Accordingly, no other system for delivering mail – public or private – can be established, absent Congress's consent. Congress has delegated to the Postal Service the power to decide whether others may compete with it, and the Postal Service has allowed an exception to its monopoly for extremely urgent letters.

So when google advertises pretty much the e-version of it in your search, you are ok with it?

I'm sure most people, probably all people are ok with it. It's the difference between hiking out to your mailbox just to throw useless paper into the recycling bin (why can't my USPS mailman do that for me?) and pollute the environment versus ignoring the small text comment on the right side of your monitor while you look at lolcats.

Regarding long lines: that's a common complaint (e.g. Of the DMV), presented as evidence of government inefficiency (not that you were making that argument).

But sizable lines are evidence of government efficiency here; one unskilled employee is able to process a huge number of people.

In return for for the massive taxpayer savings, you have to wait in line for ten minutes 2x a month (or per year in the case of the much-maligned DMV), and occasionally endure employees who are unenthusiastic to be earning very few of your tax dollars per hour.

efficiency. I don't think that word means what you think it means.

In any free market situation, like retail stores, you don't see lines as long, or employees that unhelpful. If there are 40 people in line (not uncommon at my local DMV), their time is actively wasted by one DMV employee who should be making as much as a retail cashier, but isn't because of gov't and union benefits. Opening up one more 'cashier lane' at the DMV would reduce everyone else's wasted time, so they can go back to being productive.

It's not enough to analyze just the DMV's side of the equation, you have to look at both sides to get the whole story.

It's the same story with, e.g. traffic. Minimizing traffic repair costs, at a cost of longer repair times, forcing every single person in town take longer to get to work is a huge net loss.

Efficient for whom?

Most grocery stores I frequent have replaced several lanes of "efficient" cashiers with the much slower (for shoppers) self-checkout systems. Yes, the lines may be shorter, and the store needs fewer checkers (one can cover multiple self-check lanes), so the store is saving money. But I feel a loss in service quality and am not convinced my checkout time (waiting + service) has been shortened.

So, yes, it's more efficient for the _store_, but not for _me_ as a customer.

Maybe that's what you're saying—there are two sides to efficiency. Corporations maximize it for themselves, sometimes at the expense of customers. Every once in a while one is enlightened enough to realized that improved customer efficiency is a long-term win.

Everything is a tradeoff. Your grocer probably feels that customers appreciate lower prices in exchange for that setup.

There may also be an upscale grocer down the street that tends to provide ample staffing at checkout lanes.

The problem due to the monopoly held by the postal service, its system is not subject to competition. Competition might result in competitors trying new approaches with similar staffing (improving processes, etc.) or in different staffing levels and even better service.

It's hard to know what all the clever people actually doing the work would have come up with, since their jobs will never exist when there is only one entrenched monopoly.

> Most grocery stores I frequent have replaced several lanes of "efficient" cashiers with the much slower (for shoppers) self-checkout systems. Yes, the lines may be shorter, and the store needs fewer checkers (one can cover multiple self-check lanes), so the store is saving money. But I feel a loss in service quality and am not convinced my checkout time (waiting + service) has been shortened.

Yes, I don't use them either, for the same reasons. But other people do. They've chosen to use that line. If the lines get too long, I can choose to go to another store. Having 1 cashier for each customer in the store would obviously be impractical too. But an equilibrium forms. People get short, not unreasonable wait times, and the store saves money (lowering prices for the customers).

At the DMV, that equilibrium doesn't happen, because people don't have that choice. They can't choose to go to another "store".

"the post office is one of the most unpleasant retail locations anyone could imagine -- filthy counters, grudging employees, and long lines."

i'm within a post office that is about 5 years old and clean. just because your post office is crap doesn't mean that every post office is.

Every post office I've been to has been dingy, depressing, poorly lit and has had very long lines.

It's cruel to make people work in this environment, and so it's no wonder that occasionally an employee "goes postal".

Sure there will occasionally be a new post office built, but I don't think this says anything about the values of the institution.

I send small parcels through mail every day. They go all over the world and the error rate is less than 1one percent.

I am consistently amazed that I can put something in a slot in Woodstock NY and have it turn up in the correct slot on the other side of the world in just a few days. They even come to my house and pick up.

When I do go to my local post office the only surly people are the people behind me in line.

As to junk mail, I opt out where I can and recycle the rest. And quietly thank the spamming businesses for subsidizing mine.

It's the usual story: capture of the USPS by its unions, such that 500k employees are getting raises simultaneously with their reports of "We're dying!!!"

America in 2011 simply doesn't need to set aside half a million lifetime sinecures to deliver two pieces of mail a week which actually matter. The nation receives no value from a civil servant whose full-time job is literally to convince BoA not to go paperless.

It's a cool institution. Let's remember it in a small museum somewhere.

The full story is more complicated. The USPS is in an unattractive position of being supposedly independent of the taxpayer's money, yet any major operating issues are at the whim of Congress. Predictably, it goes like this:

  USPS: "Volume is down, we need to raise prices."
  Congress: "Nope, sorry"

  USPS: "Uhm, ok.  We'll have to cut Saturday delivery then..."
  Congress: "No can do, sorry"

  USPS: "Well I guess we have to close a bunch of post offices at least"
  Every member of Congress in unison: "Sounds great, but not in my district"

etc...

I'm a big fan of the USPS -- I've found them to be more reliable than UPS and FedEx by far and they're amazingly inexpensive to boot. They know what they need to do to fix themselves, but sadly it seems to take a crisis before Congress will get out of the way and just let them do it.

Not even a crisis will convince Congress to let them do it. I mean, look at what happened with the budget.

They are insane if they raise prices when volume is going down. The only thing that will happen is that the volume will go even further down.

Oh really? What if they raise the price of postage on First Class mail by one cent. Would you look at the stamps, scream bloody murder, and stamp (hah!) out of the Post Office?

Sure, increase prices, and demand will fall, but it's not perfectly linear, and even a one cent increase boosts revenues considerably.

If you increase prices and demand falls enough, you don't get a revenue boost. Upon one USPS increase, they lost my business altogether (save for maybe 5 stamps per year, instead of 120); a one cent increase cost them a lot more.

Really? I hope you're not talking about first-class postage: http://en.wikipedia.org/wiki/File:US_Postage_History.svg

That's silly. Of course volume would drop marginally if the price increased marginally. Why do you think you know whether the relationship is linear?

Why do you assume that demand for USPS mail is elastic? (at the current low price point anyway)

Right. So pedantry wins. The point is that there is some number of pennies after which the demand is elastic notwithstanding the original poster's indifference to a one cent price increase now.

What class of letter(s) would not be sent if prices went up?

The class for which there is only a marginal benefit to sending it in hardcopy vs. email. Or the class of items whose delivery could be delayed long enough to combine it with another item.

Yes, and what type is that? Got an examples.

Here are some types of letters that won't fall under that:

* Birthday/Christmas cards. The postage is a small fraction of the card. * Legal-y letters, (e.g. when you make an offical complaint ), since the price of the stamp is again a tiny fraction of what you're complaining about. * Big padded envelops of A4 print outs of contracts or something (again, postage is insignificant)

Most utilities are switching to electronic billing, and/or charging for paper billing, so they are already getting rid of postage.

What other post is that price sensitive?

Are you really arguing that the demand for first class mail is completely inelastic based on my lack of examples of what the marginal cases are? After some number of pennies of increase, demand will fall - are you actually disputing this?

All you're arguing is that there are some pennies of increase which could increase revenue. Fine. That's not saving the post office.

> Would you look at the stamps, scream bloody murder, and stamp (hah!) out of the Post Office?

Maybe not me and not by one cent but eventually, if they keep raising the prices, I would look at the price and think, "hmm this is getting kinda pricey. I wonder what UPS would charge to deliver this..."

You can go check. USPS has a long way to go before it comes close to the prices UPS and FedEx charge. It's like comparing coach to business class airline tickets for the vast majority of mail. The postal service is truly an amazing service for small parcels within the United States.

That is why I said "eventually" ... it will be more than one cent and it will happen slowly. As price keeps cropping up some people will choose to use other services.

A whole heck of a lot more. Have you ever tried mailing an envelope via UPS? We're talking orders of magnitude difference in price.

USPS could double their first-class rates, and they'd still be undercutting the competition.

I personally doubt that the drop in volume is all that much related to prices. If they cut the price of a first-class stamp in half, mail volume would not go up much, because what we mail vs what we call/e-mail/fax/whatever is almost always based on capabilities, not cost. Likewise, if the price of a first-class stamp went up by 50%, I really don't see the extra 22 cents (or whatever it would be now) influencing all that many people to stop sending mail. A letter is already vastly more expensive than an e-mail. It seems to me that those items which are being mailed are those items which more or less have to be mailed.

It's the usual story: capture of the USPS by its unions

Except, you know, not really. You might want to read this: http://www.buffalonews.com/editorial-page/viewpoints/article...

Especially this bit:

What about those news reports of multibillion losses? Well, the $20 billion in losses over the last four years has nothing to do with what you’ve been told about a failing business model or obsolete mail. Here’s the real skinny: In 2006, Congress mandated that the Postal Service prefund future retiree health benefits for the next 75 years, and do so within a decade—something no other public agency or private firm does. The resulting annual payments run $5.5 billion a year, costing the Postal Service $21 billion since 2007. That’s the difference between a positive and a negative balance sheet, as it would be for virtually any entity facing a similar burden — if any did.

Remove that unreasonable obligation and the Postal Service would have been profitable.

But the unions do have influence. The Business Week article is from May. A few days ago, the USPS proposed a plan that would break existing labor contracts in order to keep it solvent. The plan includes cutting the workforce by 120,000 and running their own health care plan. Naturally, the service unions opposed it, making congressional highly approval doubtful.

Here's the related article from the Washington Post:

http://www.washingtonpost.com/politics/usps-proposes-cutting...

There's a difference between "influence" and "bad influence", and between "influence" and "running it into the ground".

The union quite reasonably objects to cutting 120,000, because there's no need to. The postal service could be quite solvent if Congress -- which is not the union and not, so far as I know, acting at the union's behest -- would take away the idiotic mandate to fund 75 years worth of benefits.

In other words, this is something the union should oppose.

I don't get it. Why is it unreasonable? If I promise to pay somebody $40,000 every year after they retire, but I don't set aside money to do it, you can guarantee that down the road, I'll come crying to the government to get them to pay for it. It's not like they have to set aside the future value of that promise, just the present value - in other words, the amount that they're effectively promising to the employees today. It should be considered fraud if they don't do this.

That's a reasonable argument for a general change in accounting standards, requiring all pension plans to be pre-funded. Specifically requiring the USPS and nobody else to do that, though, feels more like something political is going on.

...and I strongly support the general accounting change, particularly for government or semi-governmental entities that might be counting on taxpayers footing the bill they run up. Just because USPS suffers by having to do something reasonable because of politics doesn't mean that it's a bad idea.

It's unreasonable to impose a much tougher standard on one and only one organization, even if you think that standard would be good if applied to everyone.

Even if true that it's only the USPS, and yummyfajitas implies that it's actually a broader requirement, here it's a difference between a mistake and not making a mistake. It's not simply an accounting treatment. It's not a defense of the USPS to suggest they should be allowed to make the same mistake that other companies make.

They should be subject to the same standards as other companies. If they aren't, that's unreasonable.

As a business owner concerned about cash flow, I can tell you that paying for anything in advance is always a pain. Reasonable or not, setting aside enough cash to fund the retirement needs of all their workers for 75 years and generating that cash from revenue sounds like a huge pain.

It's not unreasonable from the taxpayers' perspective to require the Postal Service to fund its pension obligations as they are incurred. And this is also not unreasonable from the employees' perspective. When the US government runs out of new creditors (as has already happened to Greece and Italy) employees who are relying on government revenues for their pension will be out-of-luck.

Correct me if I'm wrong, but isn't this the same standard required by the PPA for pretty much every private company?

http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR00004:@@@L...;

Yep, the political angle reason why is that all of the prefunded pensions help national debt forecasts as they count as income against national debt.

What happens with inflation and interest over that 75 year span? Does the mandate to pre-pay use some formula to take that into account?

I'm not familiar with general accounting practices, but it seems like if it didn't it would be potentially forcing the business to save far in excess of the funds necessary to meet it's obligations when the bill actually comes due?

No. As I understand GAAP, the projected inflation and projected income (including interest) are taken into account at least annually. The company then pays the delta (or underpays the next installment by the delta, if appropriate).

A problem many govt agencies had over the past decade (even before the collapse) was too conservative of estimates on inflation and too exuberant estimates of interest. There was, for example, a federal policy (law, IIRC) passed early in the decade (2004-ish?) that many school districts and other agencies struggled with.

Exactly. I worked for the USPS for a short time 13 years ago & my dad still does. A lot of the postal workers want to get rid of this clause as well. They realize that it is a giant albatross hanging over their necks and they are willing to work something out. It is Congress that will not allow it.

If a) you're borrowing $10 billion from taxpayers, b) you are telling future retirees that you're going to give them gold-plated pensions, and c) you claim to be profitable, you are lying. My heuristic as to who is being lied to is simple: you guys actually get a check every month and I don't? Drats, you're lying to me.

I look forward to when you move back to Kansas and expect mail delivery six days a week, or the ability to ship a package anywhere for less than fifteen dollars.

Like ubernostrum and bodyfour point out, the real story is much more complicated than this.

This isn't to say that the USPS hasn't made many terrible missteps along the way, or that they don't need to dramatically revise their business model: they have and they do.

But, the fact remains that they are critical to many aspects of American life, even for stalwart market-driven replacements [1]

[1] http://fedex.com/us/smart-post/outbound.html and http://www.ups-mi.net/packageID/, for example

>It's the usual story: capture of the USPS by its unions...

Oh, if only it weren't for all those undeserving, greedy workers! Clearly the problem is that they banded together to protect each others' wages, access to medical care, and dignity in the workplace! Thank goodness we have Businessweek to confirm our reactionary free market biases for us.

You guys must be loving these budget crises — they provide such a convenient pretext for attacking worker's rights and consolidating the power of the owning class while sidestepping the inherent contradictions of the system which caused those crises at the outset.

Yes, it's irresponsible to _only_ excoriate the line workers. But wholly absolving them does no good either.

Surely, there's enough blame to go around.

(With an added helping for Congress, perhaps?)

I agree completely.

I'm surprised that nobody has asked the question in this thread yet--why is the government still in the mail business?

Pure libertarians would say the government should only exist to protect citizens from each other and external threats. I see a somewhat wider role: government is where we pool our money to accomplish projects that are beyond the scope of any private institution, like building an interstate highway system.

But mail? The USPS is fairly unique among government entities in that it competes directly with industry: FedEx, UPS, etc. It might have been legitimate a hundred years ago, when delivering mail nationwide was an epic undertaking that no private organization could do, but today, the USPS is obsolete.

It provides a public good and is part of our national infrastructure. Maybe you don't see the point of it but it keeps a lot of our economy and communications lines going.

So do supermarkets.

Do we ask the highway system to be profitable? If we eliminate the rural routes and only leave the profitable ones, we might as well get rid of the entire thing - the profitable routes could easily be privatized, but as it is, they offset the cost of the rural routes a bit.

I support keeping country folk connected to the rest of the nation as a public good, not a profit center.

The same subsidies which "keep the country folks connected" act to systematically encourage people to be wasteful and pollutive in their lifestyles and habits. http://bloggingheads.tv/diavlogs/37986?in=28:46&out=30:1...

If we did ask the interstate highways to pay for themselves (e.g. by raising the federal gas tax to fully cover the cost of the interstate highways), we'd go a long way towards putting various modes of transportation on even footing and enabling people to choose the optimal solution for each trip.

I can't think of a more easily targeted tax.

I don't think cutting mail service to 2 days a week would disconnect 'country folks.' Anything time sensitive could use email, fax, or (more expensive) private delivery services.

Plus, it's managed horrifically. What sort of real company would have a union contract that categorically prohibits layoffs and mandates rich pensions for basically unskilled workers?

I live in a semi-rural area and honestly, I'd rather pick up my mail at the post office. Our carrier delivers letters to the wrong houses at least once a week. I really don't know how much of my mail I never get, I only assume that other neighbors do as I do and redeliver the mail correctly.

I support keeping country folk connected to the rest of the nation as a public good...

I support having country folk subsidize the rents of people who live in cities.

I'll then attach the word "public good" to goods which are rivalrous and excludible in order to confuse the issue with ideological feelings.

I guess whatever line of argument you thought you were laying out, it got lost in the attempt at snark?

Because I don't follow this even a little.

Pessimizer is advocating having people in cities subsidize private goods purchased by "country folk" for no apparent reason. He also misleadingly referred to delivery services (which are rivalrous and excludible) as a public good.

I was doing the same thing, but swapping city people and country people.

It's a very convenient simplifying assumption to know that you can send a message to anyone in the country via the exact same method without having to do any complicated lookups. It's going to complicate everything that touches the mail system (read: almost every business) to have this facile assumption become untrue. It is very good for business, and by extension the economy, to streamline this kind of thing. It's not just subsidizing people out in the country.

Flat rate mail delivery is convenient for some businesses. Other businesses would find the benefits of cheaper mail delivery outweigh the costs of `curl www.privatemailcarrier.com/api/cost/?from=12345&to=67890`.

Why should the businesses capable of handling lookups be forced to subsidize the businesses unable to do so?

It's convenient for all businesses in that it's one less thing to worry about/have to analyze/potentially have to negotiate. The tech savvy businesses in this case (don't fool yourself into thinking that a majority of businesses can do what you just pointed out) provide a tiny subsidy in order to help improve the general health of the economy, which in turn benefits them by providing a healthy customer base and a pleasant place to live.

For large businesses that rely heavily on mail for customer communications, the solution you point out is laughably oversimplified. The difference between Chase knowing that they can definitely send mail to 100% of their customers is vastly different from them being able to send mail to 99%, especially if there's any sort of legal mandate to provide something via mail.

If you are correct, variable rate mail will find few customers and flat rate mail will survive.

Regardless, you still fail to explain how forcing technophilic companies to subsidize technophobic companies is good for the economy. Would it also be good to force companies with computerized ledgers to subsidize companies with paper and pencil accounting ledgers?

Keep in mind that that vast majority of businesses in the US are technophobic. It's not us subsidizing them, it's doing what is best for the majority. Technical literacy is not a driving factor or even particularly relevant in success in most businesses, and it's important to remember that before making pronouncements on sweeping changes that the government should enact. Having a healthy economy where conducting business is a simple and straightforward matter is something that technophilic companies should care about, since they're the ones that pay most of our bills.

Also, it's not just the flat rate, it's also the guarantee that the govt. provides of being able to send mail to everyone with an address which is important. Private mail carriers are unlikely to make the same guarantee.

From what I understand, the entire reason why we have public goods is because to have it private would cause many people to be left without service.

If it were privatized, the companies would not bother to spend money servicing routes which do not add to their profits, leaving many Americans without mail service.

And honestly, if the private companies had to deliver to every house 6 days a week, they would probably be far less profitable than USPS is.

A public good is something that is nonrivalrous and nonexcludable. Air quality, for instance. If a good is rivalrous or excludable, it isn't a public good. That's the definition of the term.

I support keeping country folk connected to the rest of the nation as a public good, not a profit center.

What, exactly, is the public good in having the rest of us subsidize mail service to rural people? It's not like they couldn't get mail - they'd just have to pay what it costs.

Where I live I pay more for land than people in rural areas do, but I don't expect them to subsidize my house. Why do they expect me to subsidize their mail, their airports, and their roads?

Have you thought about all the people who are unemployed thanks to gridlock on the US highway system? The massive inefficiency of people (in cities like Chicago, Los Angeles, etc.) wasting 2-3 hours per day sitting in their car going 5 miles per hour is astounding.

If the highway system were not held back by government planning, much of this inefficiency and waste could be eliminated, and reallocated into productive pursuits. Imagine if 80% of a city's' commuting professionals had two hours more per day to spend money on things (or to work more).

It's easy to assume that highways are one aspect of central planning that works, but in urban, congested areas they are a disaster that hits the poor the hardest.

Also, by making it seem "feasible" to live in suburbia and commute into the city, they led many middle class workers to flee cities, eroding the tax base, and causing the decay of city governments/services, etc.

Everything has tradeoffs. The highway system got us a way to ship military personnel and tanks across the country, and benefitted home builders and strip mall owners, at the expense of the urban poor.

I see there is another Kunstler fan on HN! An upvote for you, sir.

For anyone else interested in this line of argument, there is a great introduction that Kunstler did for his TED Talk.

http://www.youtube.com/watch?v=Q1ZeXnmDZMQ

Never heard of him but I'm definitely going to watch that talk :)

I don't understand your argument. I don't know how gridlock on the highway system causes employment. I was born, raised, and currently reside pretty deep in the city of Chicago, so I'm familiar with commutes, though usually on public transportation, because the interstates are largely for long distance travel. They remain 2-3 hours a day (sometimes) without touching a highway, as they were before cars were even owned by average working class people. I have never owned a car in my life, and have no interest in or ability to drive.

The highway system is a result of government planning. If it hadn't been "held back" by government planning, it would lack existence. This would be a tax on every good imported into the city (which is virtually every good.)

I don't assume that highways are one aspect of central planning that works, I think that highways are one of a multitude of aspects of government (which I suppose you mean by "central planning") that are justified because, while not being profitable in themselves, they reduce friction for the entire system. The government is the only actor who can levy fees for that from the entire system, therefore the only one who can execute it.

If the tax base is eroded in a city, this is a failure of paperwork, not a physical event. If black people and the white people who ran from them were in slightly closer physical proximity, but still entirely homogenously clumped together (assuming a huge decline in public transportation not caused by the highways) you're saying that there would be some benefit to the urban poor?

"I don't know how gridlock on the highway system causes unemployment," rather:)

>If the highway system were not held back by government planning,

What do you mean by this? Are you opposed to the EIS/EIR process?

No, but such a process would be compatible with a far more aggressive/creative approach at facilitating the widespread cooperation (among public and private entities) needed to solve the problem.

Perhaps government has a role in highway planning, but I think it should act more like cooperation infrastructure provider rather than system designer.

>No, but such a process would be compatible with a far more aggressive/creative approach at facilitating the widespread cooperation (among public and private entities) needed to solve the problem.

That's pretty much what happens now in the environmental process. The problems tend to come because of political, engineering, legal and/or financial issues that get in the way.

It's not as though the government says "this road shall be built here!" and then does it. A problem is identified ("we need to move people from here to here"), several options are created ("we could build a transit line, expand an existing road, build a new highway, build a bridge, etc"), and then opinions from the community are sought as part of the Draft EIR/EIS.

One area that does need improvement is more consideration of projects on a regional basis (the effect on neighboring states for example rather than just looking at the immediate project area), but public and private entities are most certainly in the loop for current projects. If they weren't, these entities would just tie the project up in court.

Well, I think the ideal role of government would be to facilitate the sort of meta-cooperation necessary to solve the problem. The current planning/funding role clearly doesn't work.

How would the free market fix that problem? Do you have to pay a subscription fee to get a road to your home or business?

A link for the full article, if you don't want to hit "next page" seven times:

http://www.businessweek.com/print/magazine/content/11_23/b42...

This quote summarizes what is wrong with the Post Office: "They are supported by junk mailers, greeting card manufacturers, and magazine publishers whose businesses are, in some cases, subsidized by the post office's generously low mailing prices. Never mind that their benefactor loses money on some of their products, most notably magazines and some junk mail.

If you are "los[ing] money on some ... products" then just maybe you need to increase the cost of delivery of those products until you are no longer losing money...

Assuming they can increase cost of delivery (something that, apparently, congress is against), chances are this is what would happen: they raise prices to cover (marginal) costs, and some customers run away. A commercial company would reply by either cost-cutting, shutting down (parts of) the company, increasing productivity, or finding new revenue streams.

The USPS does not have first or second options, and the third on its own only helps if it brings in extra work, which it does not (remember the 'some customers ran away' part?)

It all boils down to the fact that the USPS is not operating in a free market. They have huge expenditures that they cannot get rid of. If you have an employee, but no work for him, and cannot fire him, it makes economic sense to take on work that pays less than what the employee costs. Sure, it loses you money, but it loses you less money than not taking on that work.

So, that leaves the fourth stream. In e EU, that has seen post offices turned into shops, selling mail-related stuff such as postcards. That may work, but especially in smaller villages, it is easier to outsource the post office tasks to existing shops, rather than trying to compete with them in a market that cannot sustain two shops.

it is a politician's jobs to make actions that result from basic economic realities illegal when those actions conflict with the warm fuzzy picture their constituency has of the world.

I found myself surprised to agree with the USPS position that online-services are a bad idea (for the USPS). I mean generating a postcard from your mobile picture just seems like something that a tech-company will do a better job at.

I can only imagine how much money the USPS would spend on some of these applications, only to have a startup with $250K funding (or, you know, Facebook) steamroll them.

Yes I dont think thats whats making money in Europe. Deutsche Post is making money from owning DHL I think. Not that USPS buying fedex is likely. Closing post offices has reduced costs, delaying the issues. Here in the uk we are in a similar position to the US. There is a shift to banks and utilities sending by email, and junk is shifting to phone as it is more effective.

However merging and being profitable has probably helped some of these outside the uk be less government minded and more commercial.

>> generating a postcard from your mobile picture just seems like something that a tech-company will do a better job at

I think the point was that the overseas mail services have become tech companies.

I agree with that - but they should at least build an API that would let other applications send digitally-generated mail, or to order stamps, get parcel information, tracking details etc.

I think USPS would have been in a great position to be an online identity depository and payment platform for consumer to business dealings. They should have done it 10 years ago.

Imagine an email like system where you and the companies you do business with can communicate, and you can pay them. Some sort of whitelisted communications channels, whereby when you enter in a service contract with a company, you also add them to this comm channel. No spam. Just valid communications and invoices. Verified identities and verified payments.

The USPS is in a great position for that sort of thing, being they actually come to your house every day. They already know who you are, and where you are. They have a pre-existing business relationship with every entity in the US.

Whereas now I have to tell my parents and grandparents to basically not believe anything they see in their email inbox -- it would be nice if a more secure channel existed. $250K startup -- get on it!

The USPS has a shitty track record for not spamming people. Maybe half of my mail is spam. While the USPS might have been in a position to do as you suggest for quite some time, the fact that they haven't indicates something, doesn't it?

The USPS (or Fedex or UPS or DHL or anyone else) were not conceived to be whitelisted services - they just deliver stuff. USPS does it cheaply, so bulk mailers use them. I don't know the rules and regs, I'm not actually sure the USPS has it within their control to white list actual mail.

I'm proposing a different service -- my main point being that because of who the USPS is, they'd have an enormous natural advantage to offer that type of whitelisted new service. The fact that its a no brainer and that nobody has done it probably means it is hard, more than anything. But it seems it would be easier for someone with the reach and institutional trust of a quasi govt organization (compared to a startup).

Perhaps the USPS would be more likely to do a better job in curtailing their reliance on bulk mailings if they had an exploding, high margin revenue base around ecommerce payment and being a more trusted, secure form of business communications channels. Mail spam sucks, but that is their revenue base. From their point of view, as an institution, they of course would like to see it replaced, institutions don't themselves like to generally just commit suicide.

Tech is what is going to replace them, at least attempting to transition to tech while leveraging what advantages they do have isn't a terrible idea -- because there quite possibly are some things they are able to uniquely bring to the table.

It's a hard problem because email is good enough for communications (the good is the enemy of the perfect) and any improvement in payment systems would require changes to major backend components of the banking system. The USPS brings legitimacy and business relationships to the table, but they're hamstrung by Congress and by the unions.

The best chance is if someone follows the Hulu model and immediately gets BOA, Chase, Wells Fargo, Citibank, and US Bank to buy in from the get go. Even then it may require a regulatory change, but getting the top handful of American banks to buy in should be enough to build the necessary lobbying support.

Here's what I don't understand about the USPS situation. They deliver 200 billion pieces of mail per year. So if they're short 2 billion dollars, then they just need to raise the price of a stamp by 1 cent. Problem solved, no? Can somebody tell me why I'm wrong here? Would volume really fall that substantially if they raised the price of a stamp by a few cents?

Much of the mail is bulk (aka junk) mail sent by companies and organizations that have lobbyists. These lobbyists make it very difficult to raise postal rates as you suggest.

Add this to the Mephistophelean bargains that they have made with their unions over the years (because they too are politically powerful) and you can start to see the predicament. They're being squeezed dry.

The abundance of bulk mail sent is a clear sign that the market could very easily sustain higher rates.

Demand is there and it's strong. Raise the prices.

what? are you claiming that the unions would have a problem with raising the price of stamps by a cent?

No, what he's saying is on the one side the junk mail senders are blocking rate increases with lobbying and on the other side unions are asking for high amounts of benefits and pay raises. This is what he meant by squeezed (from both sides) dry.

You're wrong because you have no idea what the relationship is between price and demand. Even though you might not care if the price is raised by x, it is obvious that for essentially every x, there are people who do care and will no longer pay it.

The postal service is being forced to make a massive prepayment for decades of pensions all at once. No regular business would even think of doing that on it's own. It's congress behaving stupidly as usual.

Also, it needs to stop the practice of employees purposely retiring early and then being hired back by friends as contractors. So they get both retirement benefits and then a second paycheck. If they leave, make it so they cannot be a contractor, would solve an expensive labor abuse.

I mail and receive small packages weekly that would be unaffordable (and mishandled) by UPS. I'd hate to lose Saturday delivery but it would be a bearable compromise among alternatives.

While it _seems_ bad to hire someone who's already receiving a pension, what's the alternative? Hiring someone else, who's unskilled, and _still_ paying the pension? Maybe the problem is the pension itself, not the double-dipping.

The problem is the person was offered early retirement to reduce costs.

If you hire someone outside the system you are reducing unemployment in a helpful way. The retired person is already doing just fine with benefits and medical coverage, give the outsider a help up.

I'm willing to bet that if there a private company had to operate under the same stifling rules as the USPS, they would have quit a long time ago.

The USPS could raise the price of delivering mail to match the costs. BUT THEY CAN'T! Even though the Government does NOT provide any funding to the USPS, the Government (specifically, the Congress) keeps thwarting the USPS' efforts to operate like a business.

You want to fix the USPS? Take away the Congress's ability to interfere with it. The USPS' only mandate should be to deliver mail to every physical address. That's it. Just let them fix their rates, their benefits, etc. and I'm willing to bet they'd be just fine.

The stifling rules go both ways--USPS has a government granted and enforced monopoly on mail. It may be a shitty business, but at least you can't have competition.

"USPS has a government granted and enforced monopoly on mail."

What? Does Fedex and UPS know?

Yes, which is why no one else delivers non-urgent mail. You'll get shut down by the postal inspector.

The vast majority of the routes that the USPS runs are money losers. Try delivering a 44-cent piece on a mule to the Havasupai at the bottom of the Grand Canyon.

Don't you think, the way the Congress can be bought, that a private company that thought it could do the USPS' job wouldn't have bought its way in?

The vast majority of mail isn't delivered to the money losing routes the USPS always likes to mention (mules, snowmobiles, bush planes, etc). The vast majority of mail is bulk rate and sent from/to urban areas.

I always thought that they should do home pick up & delivery 3 days per week but adjoining regions would have different days. So region A would get mail M,W,F and region B would get mail on T,Thurs., Sat. The mail carrier would alternate between regions A and B. It seems like you could almost halve the number of mail carriers this way.

That assumes that the trucks/carriers in regions A and B are running almost half-empty right now. That's not likely.

It's hard to feel sorry for an organization that is going bankrupt even as they maintain a government-enforced monopoly. If business is really so bad, why doesn't the Postal Service allow private businesses to compete with it? If there's no money in the business, then there's no need to fear competition. No one wants to enter a business you can't make money in.

I don't even know why I'm replying to this, but this sort of reasoning makes my blood boil.

A lot of clueless people throw in the "p" word (privatization, or private competition) without really thinking things through.

The USPS is based on the idea of cross-subsidies. The fact that it's easy to deliver mail to, say, 100 addresses in San Francisco (a carrier can just walk a block and do it), subsidies the fact that in, say, Nebraska they would have to drive 100 miles to deliver to the same number of addresses. No private company would do this; they would just deliver in the cities, and tell the rural folks to fuck off. The private operators would just cherry-pick the profitable routers, and dump the rest. Is that what you want to see happen?

The solution is quite simple: Offer the private carriers the rights to carry ordinary mail, on the condition that they do the same kind of cross-subsidization. You don't necessarily need a monopoly, just regulation.

I have thought it through, and I still think it's a good idea. People who choose to live in the middle of nowhere should pay the full price of doing so.

I'm sure private companies would have no problem delivering mail to the middle of nowhere, but the people living there will have to pay the actual, higher, cost of delivery. Why is that such a big deal?

Why should urban dwellers subsidize rural dwellers? Yes, I'd like to see a system where price of service is proportional to the delivery cost.

I don't want to subsidize mail for people in rural areas. If you do, feel free to donate for that cause.

I can't think of a good reason to subsidize mail. If people live where mail delivery is expensive, they should have to bear the cost. This would cause them to conserve their mail use. Instead of getting mail once a day, perhaps they should receive it once a week, or once a month. Maybe they could pick it up where they buy groceries. Maybe they could just use email or phone. Maybe they would get less junk mail. It's hard to tell how they would adapt if they had to pay market prices. But they would adapt and that's a good thing. It's not a good thing to pretend that delivery costs 40 cents when in reality it costs 40 dollars. And it is unjust to force people who chose to live in areas where it's efficient to deliver mail to subsidize people where it's not efficient.

Also, if subsidized rural mail service is something the taxpayers want to pay for, they could just as well subsidize private carriers.

In short, I don't see any good reason why the USPS should have a monopoly on mail service, any more than it should have a monopoly on email, or fax, or telephone, or TV or any other means of communication.

The reason for subsidizing rural mail delivery can be found in the U.S. Constitution, Article I, Section 8, Clause 7 (aka, the Postal Clause).

The Founding Fathers considered postal delivery to be important enough to mandate it in the Constitution.

From Wikipedia[1]: Article I, Section 8, Clause 7 of the United States Constitution, known as the Postal Clause or the Postal Power, empowers Congress "To establish Post Offices and post Roads".

Without this clause, Congress would not have the authority to establish Post Offices. But note the clause does not say anything about making postal service an exclusive government function. In fact the clause does not even mandate that Congress establish Post Offices, Congress merely has the power to do so. If Congress shuts down the Post Office, it would be perfectly Constitutional. The clause is definitely not a "reason for subsidizing rural mail delivery" anymore than Congress's power to Declare War is a reason to have a war.

[1] http://en.wikipedia.org/wiki/Postal_Clause

On a lighter note: This was forewarned long time back - http://www.youtube.com/watch?v=Hox-ni8geIw

After decades of mismanagement and neglect, service broke down completely in Chicago in 1966. "The sorting floors were bursting with more than 5 million letters, parcels, circulars, and magazines that could not be processed," Lawrence O'Brien, the Postmaster General at the time, would recall somewhat poetically. "Outbound mail sacks formed still gray mountain ranges as they waited to be shipped out."

And here I thought Terry Pratchett's Going Postal was fiction.

How about organizing a summit to disrupt the USPS?

I got involved in the question of the future of postal, oddly, because of my book, What Would Google Do? [sorry for the plug], when postal execs asked what the USPS would be if Google ran it. Hmmm. You guys could help answer that.

A consultant in the industry organized an event in DC, PostalVision 2020, and we had Vint Cerf come keynote. I'd like the next phase to focus on how to disrupt postal entirely.

First class will die and with it its subsidy for media and other mail. Parcels will take off but the private sector can handle that. (If we need to guarantee universal service, that can be done with subsidies -- a la, phones -- better than by owning the infrastructure). There are entrepreneurial ventures such as Manilla aiming to disrupt physical bill delivery..... It's an area ripe for innovation and investment.

A few of my earlier posts: http://www.buzzmachine.com/2011/05/18/why-do-we-need-a-posta... http://www.buzzmachine.com/2010/03/23/post-postal/

Why should the postal monopoly exempt "urgent package delivery" (aka FedEx and UPS)? If we want an economically healthy postal service, ceding that profitable segment of the postal business to private industry was a strategic error. I personally believe that a healthy postal service is critically important.

The USPS needs to come to terms with the shift in communication mechanisms. People don't write letters as a common means of communication anymore. I believe there is some value in maintaining the Postal Service but its role will need to shift dramatically if we expect to see any sustainability from there.

I think that people in the USPS definitely realize this, but they are unfortunately prohibited from doing any of the obvious things that one would expect them to do in response. They can't close unprofitable post offices, lay off redundant employees, increase prices, or decrease the level of service being offered.

All they can do is let it blow up and then hope Congress gives them enough leeway to put the pieces back together into something better and more sustainable ... hopefully using profitable semi-privatized Western European services as a model.

Businesses still pay many bills with paper checks sent via mail. I wonder when we will no longer need the USPS for that.

When the banking and payment systems are fixed. In the year 2011, there is no legitimate technical reason for paper checks and the mail being a legitimate payment system. But the digital alternatives are little better.

Do your part to save the post office. Write a letter.

Convert USPS into a Bank

Poll: Should the USPS be allowed to go out of business? http://www.wepolls.com/p/1900483/Should-the-USPS-be-allowed-...

I have a solution that is guaranteed to save the post office money: crowdsource the delivery of mail. How does it work? Mail is sorted and placed in bins by USPS. Individuals who work close to or drive by the post office on their way home can stop by and pick up the bin for neighborhood/apt complex/building/center. The person who picks it can either drop the mail or let others come pick it up.

That would be a nightmare in terms of reliability and security.

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