In praise of the U.S. Postal Service

I’m a great admirer of the U.S. Postal Service.  If it didn’t exist, and some entrepreneur proposed doing what it does, it would be regarded as a miracle of free enterprise.  Consider:

Six days a week it delivers an average of 563 million pieces of mail—40 percent of the entire world’s volume.  For the price of a 44¢ stamp, you can mail a letter anywhere within the nation’s borders.  The service will carry it by pack mule to the Havasupai Indian reservation at the bottom of the Grand Canyon.  Mailmen on snowmobiles take it to the wilds of Alaska.  If your recipient can no longer be found, the USPS will return it at no extra charge.  It may be the greatest bargain on earth.

It takes an enormous organization to carry out such a mission.  The USPS has 571,566 full-time workers, making it the country’s second-largest civilian employer after Wal-Mart Stores.  It has 31,871 post offices, more than the combined domestic retail outlets of Wal-Mart, Starbucks, and McDonald’s.  Last year its revenues were $67 billion, and its expenses were even greater.  Postal service executives proudly note that if it were a private company, it would be No. 29 on the Fortune 500.

via BusinessWeek.

But now the U.S. Postal Service is on the brink of insolvency, for two reasons.  Its most profitable businesses are being cherry-picked by Federal Express, United Parcel Service and other private companies.  The USPS has the mandate to make a profit, but also the requirement to provide a universal service.

The question is which is more important—making a profit or universal service.  If making a profit is more important, there is no need for a government Postal Service.  But if we want a universal service, if we want sheep herders in Idaho and 86-year-old widows who can’t afford Internet connections to have a right to send and receive messages at an affordable cost, then we should think of it as a public service.

Here is an illustration of the difference.

The Post Office–“Neither snow nor rain…”:  During Christmas week in 2008, a terrible blizzard hit the Puget Sound region.  Not being well-equipped for blizzards, many of us were shut-in for days, and my street was one of many that went unplowed.

On Christmas Eve, my daughter and I went out to build a snowman.  Our snow-blanketed street was deserted and silent.  After a while, we were surprised to hear a vehicle approaching.  Soon a U.S. postal truck, producing the only tire tracks on the road, came into view.  The truck stopped at our house and the mail carrier delivered two packages for my daughter, one from each grandmother.

Without that delivery, my daughter would have had only one present on Christmas day, the one her father and I gave her.

FedEx–“A blizzard? Get it yourself!”:  The day after Christmas, my sister called to ask how my daughter had liked her gift, and we told her we never received it.  My sister said, “Man, FedEx sucks! I paid extra for them to deliver it on Christmas Eve!”

When I called FedEx to inquire about it, I was told that they weren’t going to deliver until the snow melted, and if I wanted the package sooner, I had to go to the main FedEx facility to pick it up.  I stood in line at the facility for about two hours that weekend.  A Tacoma News-Tribune article later reported that neither FedEx nor UPS had made any of their deliveries during Christmas week, to the consternation of their customers, but the U.S. Post Office had made all of theirs.

via Green for the rest of us.

Here is the perspective of a retired postal worker.

The truth is there is no profit to be made delivering mail when all the easily made profits are siphoned off by other package carriers.  FedEx and UPS take the cream off the top, leaving the unprofitable business to the postal service which is legally obligated to deliver to every address six days a week.  If anyone thinks FedEx or UPS wants to deliver packages to every house every day, they are mistaken.  They do not want to waste their time driving to unprofitable rural areas or stopping at every house in a neighborhood. 

If the USPS disappears, I feel sorry for anyone living any distance from a large city who expects mail at an affordable rate.  A lot of people don’t realize that the postal service currently delivers some packages for FedEx and UPS that would be unprofitable otherwise.

via Talking Points Memo.

Another problem of the USPS is a requirement to pre-pay its pension liabilities 100 percent, at a cost of $5 billion per year.  Auditors say the USPS has overpaid its pension liabilities by $75 billion.  Possibly it is coincidence, but the Postal Service only started operating in the red after Congress enacted this new requirement in 2006.

No doubt the U.S. Postal Service could be run more efficiently and creatively than it is.  But no institution can downsize its way to success, and that is what the Postal Service is trying to do.  A letter carrier friend of mine tells me that the Postal Service is being run like a failing business—shedding jobs, curtailing service, stepping up the work loads of the remaining employees.  This is not a plan, only an attempt to postpone the inevitable.

There is a right-wing faction in Congress, led by people such as Rep. Darrell Issa (R-CA), who want the Postal Service to fail.  Some oppose public service or to government enterprise.  Some would like to get rid of trade unions such as the American Postal Workers Union and the National Association of Letter Carriers.  Some would like to see the Postal Service assets sold off cheaply.

The Founders of our country saw mail delivery as a key function of government.  Article One, Section 8, of the Constitution gives Congress authority “to establish Post Offices and post Roads.”  Well, at least we still have the roads.

Click on The U.S. Postal Service Nears Collapse for a Business Week article analyzing the Postal Service’s problems.

Click on More on the Postal Service for the Talking Points Memo page giving the perspective of postal workers.

Click on Kill Good Government, Postal Service Edition for comment on the Daily Kos web site analyzing  the Postal Service pension issue.

Click on Don’t lay off 120,000 postal workers in the midst of a jobs crisis for the perspective of Fred Clark on his slacktivist web site.

Click to enlarge

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One Response to “In praise of the U.S. Postal Service”

  1. tranacria Says:

    I recently sold a rare gold coin through Amazon, which the USPS delivered and obtained the signature of the buyer automatically because the coin was insured for over five hundred dollars. The buyer claimed that the USPS never delivered the coin to him. I called his local Post Office and they were nice enough to fax me his signature card. I scanned all of the information I had and emailed it to Amazon. The USPS was a lot of help and the buyer is now classified as abusive by Amazon.

    Like

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