USPS-$5bil Loss, CanadaPost- $433mil Profit

[votrechien]

It's outrageous.

USPS just reported a $5bil + annual loss: [money.cnn.com...]

Canada Post in August reported its highest profits ever - nearly half a billion (for a country with 10% the population of the US) [cupw.ca...]

Clearly declining mail volumes is not the sole cause of the problem. And while labor contracts might be partly to blame anyone who ever uses USPS knows how prehistoric many of their systems are. I cringe every time it costs me the same amount of money to send a package from Blaine, WA to Surrey, BC (about 5kms apart) as it does from Blaine, WA to Toronto, ON (about 5000kms apart).

[Wlauzon]

The postal systems problems are about 75% interference from the government

I would say more like 90%. Those idiots in congress insist that USPS be self sufficient, and then impose rules that UPS and FedEx do not have to follow. <insert long rant about the idiocy of congress critters here>

As far as unions go, UPS and FedEx also have that to contend with so not sure how much of an issue that is, except (again) for the congressional mandates.

[Rugles]

Sorry, IMO Americans are spoiled by their postal service. I have no sympathy. I pay more for postage than you do and I get less service. Not surprisingly my postal system is not losing money. Our postal workers get decent pensions and have full health coverage as well.

You want to send an envelope from Key West to Anchorage for less than 50 cents .. and it better get there on time!

Blaming the workers or the politicians is not going to fix anything. At the end of the day, if you are not charging enough for your service to cover your expenses, it is an unsustainable business model.

Y'all want your free boxes and you rationalize it to make it sound like you are entitled to them. Well, in the end somebody has to pay for those "free boxes".

[jwolthuis]

Y'all want your free boxes and you rationalize it to make it sound like you are entitled to them.

(What is "y'all", aye?)

The free flat-rate boxes offered by USPS are one thing they did right.

Spend any time in the post office, and watch that everyone in line is using them, even though 90% of those shipments would ship cheaper via regular Priority Mail rates, or via UPS.

Also, those "free boxes" are not all 200lb-test corrugated boxes. The Regional Rate boxes are cheap cardboard, and probably cost them a dime each. Not a bad investment to secure a $5+ shipment. UPS should take note.

[Planet13]

Our postal workers get decent pensions and have full health coverage as well.

Yes, but due to Congressional requirements, the USPS has to PRE-FUND the pensions 75 years out. And they have to pre-fund pensions for 250,000 employees WHO NO LONGER EXIST!

Blaming the workers or the politicians is not going to fix anything. At the end of the day, if you are not charging enough for your service to cover your expenses, it is an unsustainable business model.

That might be, but since it is a semi-government enterprise, USPS needs permission from the politicians to raise rates. The rates are, in effect, controlled by congress.

So how can the politician's NOT be to blame if every time USPS suggests a rate increase, their is no political support from Congress?

The USPS is similar to Fannie Mae and Freddie Mac; semi-autonomous organizations that must follow federal restrictions and requirements. The USPS CAN'T just raise rates without getting Federal approval first. And no politician wants to be known for raising postal rates...

[Planet13]

Here is a brief example of some of the political challenges that the USPS faces. Congress has to pass legislation to increase rates on the discounted postage rate that non-profits get, for example:

[case.org...]

[Planet13]

The free flat-rate boxes offered by USPS are one thing they did right.

Yes, indeed.

One thing that I THOUGHT was going to work out well are the automated Postal Counters (APCs).

they work well for about 905 of most people's mail needs. But for whatever reason, people don't seem to be willing to use them.

There are times when I swing by the post office to pick up some flat rate envelopes or something and there will be a LINE of 10 or 15 people for the counter, and NO ONE is using the APCs. I go over to see if they are out of order or something, but they aren't; just people are afraid to use them.

[dpd1]

The free flat-rate boxes offered by USPS are one thing they did right.

Yes, indeed.

One thing that I THOUGHT was going to work out well are the automated Postal Counters (APCs).

they work well for about 905 of most people's mail needs. But for whatever reason, people don't seem to be willing to use them.

There are times when I swing by the post office to pick up some flat rate envelopes or something and there will be a LINE of 10 or 15 people for the counter, and NO ONE is using the APCs. I go over to see if they are out of order or something, but they aren't; just people are afraid to use them.

This goes back to the 'dinosaur' mentality. How long is Congress going to force them to keep the same level of service, for a minority of people that refuse to adapt. I actually know business owners that don't even use an online postage service. They lug dozens of boxes to the PO every day and stand in line. Been doing it for years. Go to any PO... You'll see them standing there.

There's a happy medium between what they have now and what they would have with full privatization. With full privatization you need profit. And for virtually any large corporation, the more the better. They don't have to make a profit now, they just basically have to break even. They could probably do that by making the changes they'd like to make. So the cheaper service could stay for the most part, but Congress and the public just have to give a little. Otherwise the whole thing is going to go down and you're going to lose ALL the benefits.

But lets face it, the flat rate box thing is a scam and they know it. That's why they push it. I've actually made the mistake myself a couple times, assuming that the rate is lower, then after putting it in... realizing regular would have been cheaper. I don't blame them though, they're just trying to make money where they can.

[Planet13]

...but Congress and the public just have to give a little. Otherwise the whole thing is going to go down and you're going to lose ALL the benefits.

+1

[Rugles]

I seized upon the "Free Box" thing as an example of how some Americans expect these kind of things .. yet are then surprised that USPS is running a massive deficit. It is a symptom of a larger problem .. hint, hint.

You can complain all you want about over funding a pension plan. But that money is not going into a black hole. It is likely better to over-fund the pension plan than under-fund it and pass the bill to your grandchildren.

I have yet to see anyone here offer to pay more for a stamp or a measly $1 for the "free box". Amazing.

Why does this bother me? Partly, because I have to compete with American companies who are taking full advantage of these discounted postal services and "free" packaging.

So how can the politician's NOT be to blame if every time USPS suggests a rate increase, their is no political support from Congress?

It really should be free of politics. I would guess that very people have ever been elected in the US proposing a tax or fee increase.

[Rugles]

Dropped a word. That last sentence should read:

I would guess that very FEW people have ever been elected in the US proposing a tax or fee increase.

[HRoth]

Rugles, the US Postal Service is not funded by taxes, so that is right off the table. It is an agency funded by what it takes in. There is no company in the world that has had to fund pension funds for 75 years in advance. Not one. This was mandated specifically to cripple the post office so it could be dismantled and turned into another feeding trough for corporate pigs, I mean, private corporations. But hey, let's level the playing field then and make UPS and FedEx fund the next 75 years of their employee pensions. Oh wait--do they even have any?

[Rugles]

Rugles, the US Postal Service is not funded by taxes

Completely aware of that. However, if they run an operating deficit forever eventually the taxpayers will be on the hook.

Agree?

[dpd1]

I seized upon the "Free Box" thing as an example of how some Americans expect these kind of things .. yet are then surprised that USPS is running a massive deficit. It is a symptom of a larger problem .. hint, hint.

You can complain all you want about over funding a pension plan. But that money is not going into a black hole. It is likely better to over-fund the pension plan than under-fund it and pass the bill to your grandchildren.

I have yet to see anyone here offer to pay more for a stamp or a measly $1 for the "free box". Amazing.

Why does this bother me? Partly, because I have to compete with American companies who are taking full advantage of these discounted postal services and "free" packaging.

So if you were operating in the US, you would buy your own boxes in protest? lol If the box costs are measly, than why is it an issue for you? Come on... We're just using what is available, just like you would.

If pensions and employee costs are so meaningless, than why are they always the first things giant companies go to when they look to cut, even when they AREN'T in the red?

I agree stamps can go up and fees can go up a little. But charging people for some boxes isn't going to erase billions in the negative. I doubt many people demand free boxes. Cheap stamps yes, free boxes... No. I assume they have probably paid a lot of money for studies on this stuff, and they apparently think the free boxes are worth the cost. I would bet there are millions taken in by people using free flat rate boxes, because they assume it's the cheapest, even though it's not. In many cases, you have flat rate box users paying almost double what they could. So the USPS may not be as dumb as everybody thinks.

[Planet13]

Completely aware of that. However, if they run an operating deficit forever eventually the taxpayers will be on the hook.

Agree?

Not exactly...

Here's the deal; Politicians know they will be really unpopular if they agree to the postage rate increases that the USPS will need to keep it solvent.

so they want to kick the can down the road by basically forcing it to HAVE to become a private organization.

They don't want to fund the USPS with taxes, but they don't want to be held responsible for rising postage rates.

So, kick the can down the road...

BTW: The newish Priority Mail Regional Rate boxes rock! Took me a while to figure out what they were, but the Rate Box A is basically the rate for a two pound package, no matter how much you put in it (up to like 14 pounds).

Too bad they are only domestic.

[pinterface]

I actually know business owners that don't even use an online postage service. They lug dozens of boxes to the PO every day and stand in line.

Maybe I shouldn't admit this, but that used to be us! Fortunately, our postal clerks are awesome people, and encouraged us to use Click-n-Ship (admittedly, it's nowhere near as nice as the various services that charge a monthly fee, but it's still an overall improvement). Nowadays we just drop stuff off and avoid the line entirely.

I even wrote a little Greasemonkey script, so we don't have to enter addresses manually. Just punch in a reference number, and it pulls the address info in. Not as good as total automation, but way better than standing in line. :)

But lets face it, the flat rate box thing is a scam and they know it. That's why they push it.

It really depends on what you're mailing. We mail plenty of things where an FRB costs half of what the regular Priority Mail rate would be.

The newish Priority Mail Regional Rate boxes rock! ... the Rate Box A is basically the rate for a two pound package, ...

We certainly love those things around here! Almost everything we were shipping in the 04 boxes got cheaper to ship, and fits better, in those lovely RRAs.

[dpd1]

Maybe I shouldn't admit this, but that used to be us! Fortunately, our postal clerks are awesome people, and encouraged us to use Click-n-Ship (admittedly, it's nowhere near as nice as the various services that charge a monthly fee, but it's still an overall improvement). Nowadays we just drop stuff off and avoid the line entirely.

I admit, the times I did go in and see ladies with their bag of little boxes, I was envious. I would love to send out little boxes like that.

In the very beginning years ago, I also stood in line. But that was just once a week back then. It would be impossible today. I had to go in for the first time in a long time the other day, and I have to say... I don't miss it one bit.

[Marshall]

Too bad they are only domestic.

They do have flat rate boxes for international mail. The smallest is the size of a video cassette (remember those) and is only $11.75. I know as I just used it to ship an item to Canada which otherwise was around $22.00 for Priority International. I think the medium is around $20.00, but I would not swear to it. Check USPS.com for the rates and box sizes.

Marshall

[Planet13]

@ Marshall

They do have flat rate boxes for international mail.

Yup. But what I was lamenting was the lack of REGIONAL Rate boxes (relatively new, I think launched early 2011).

There are two sizes: Rate Box A and Rate Box B.

For Rate Box A, they charge you whatever it costs to send 2 pounds to your destination, but you can put up to 14 pounds (I think) into the box. They only charge you the same as if you put just 2 pounds in it.

For Rate Box B, I think they charge you the same as if you were sending a 3 pound box, again, no matter how much weight you actually put in it (up to 20 pounds).

[HRoth]

Thanks for mentioning the goodness of the regional flat rate boxes, planet13. I have seen those on the USPS site but haven't looked at them yet. I have been shaving a bit off shipping costs by using the small flat-rate boxes for things going to states more than a state or two away.

Re the international flat rate priority boxes, there is no tracking on those boxes. I found this out the hard way.