With Regard To The USPS

With more bad news about the US Postal Service surfacing, I am noticing a lot of what I believe to be misconceptions. Here are the misconceptions and why I believe they are so:

Generally from the Left: The Constitution mandates a Post Office.

No, it empowers the government to create one. That’s not the same as mandating one. The ability to send and receive mail is not a Constitutional Right, so far as I know.

Generally from the Right: It’s telling that labor costs represent 80% of USPS costs, while only 53% of UPS and 32% of FedEx.

It might be telling, but not necessarily. The USPS, UPS, and FedEx all do slightly different things which involve different amounts of reliance on labor and utility costs. The labor costs of the USPS are unavoidably high at least in part because going door-to-door six days a week requires a lot of people. Different mechanisms can also explain the difference between UPS and FedEx, even apart from unionization. FedEx’s reliance on air travel generates much higher utility costs, which lowers the percentage going to labor. UPS pays its drivers more than FedEx does, but pays its package handlers less (Glassdoor: FedEx, UPS). That’s not to say that unionization doesn’t help keep FedEx rates down, or that union pay and benefits aren’t inflating those of the USPS. It is saying that looking at labor costs as a percentage of operational costs doesn’t necessarily reveal all that much.

Generally from the Left: The USPS is indispensable because it delivers to places that UPS and FedEx don’t and delivers door-to-door every day. Nobody could be profitable doing what the USPS does.

There are two parts to this.

First, that the USPS does the sort of tedious door-to-door delivery that UPS and FedEx don’t. This part is true and it’s not at all certain that UPS or FedEx would step in if the Post Office cratered. However, with the existence of the Post Office, we really don’t know either way. Since that market is covered, there is no reason for them to really try.The competition and overlapping infrastructure would likely cost both companies money without seeing much return. But take out the Posal Service and either UPS or FedEx might find it worth their while to enter the market. It is likely that prices would go up, though, and service down, even in a better-case scenario where they do pounce.

Second, the USPS does deliver to places that the other two don’t. However, this is an infinitesimally small portion of their delivery. We could, at least in theory, subsidize deliveries to Barrow, Alaska, in return for guaranteed delivery. Or the USPS could become the Rural Postal Delivery Agency, that simply takes the handoffs from UPS and FedEx beyond a certain point at a loss far less than the USPS is facing. I’m not saying these things are desirable, and they might not work, but it’s far from clear that the problem with the post office is the 0.01% of packages being delivered to outposts in Alaska and Reservations.

People seem to labor under the impression that UPS and FedEx are quite selective about where they will deliver to because they just tag-team it with the USPS for places outside of major cities. I live in a pretty rural town of a few thousand (the nearest major city is five hours away) and we have a FedEx location and UPS has an outpost. Packages are delivered to me directly from UPS or FedEx. The same is actually true of rinkier-dinkier towns around here. If you take everyone that lives in or around cities of a few thousand or more, you’re not talking about everybody, but you’re talking about the vast, vast majority of people living in the continental US.

Which, of course, leaves Alaska and Hawaii. Maybe in addition to the RPDA, we’d have an Alaska Post. Or maybe, absent the ability to simply hand it off to the USPS, either UPS or FedEx would step in. Who knows? But while there are reasons to keep the USPS, these grand exceptions and special circumstances are not reasons to do so. Separate accommodations could be made. Maybe the current arrangement is better (I suspect it is), but the argument for a post office has to rest on other things.

Generally from the Right: The problem with the Post Office is that their pricing is entirely illogical. They charge the same amount to send a package from Atlanta to Seattle as a package right down the street.

Actually, there are a lot of reasons to do this, at least as far as envelopes go. Pricing simplicity has its own value. The knowledge that I merely need to stick a stamp on a letter without regard to where it’s going means that I am more likely to send letters and post cards. If every time I wanted to send something I had to confer with some pricing chart, I would do so with less frequency. The fixed costs would remain, but marginal income would drop.

And no, actually, it doesn’t cost the USPS all that much more to send a letter down the street than across the country. A goodly part of the Post Office’s expenses are the fixed costs of going house to house. The transportation network is going to make its way from Atlanta to Seattle anyway. Whether there are more letters or fewer letters doesn’t actually make all that much of a difference in terms of costs. It takes more time, to be sure, but that’s all factored in (someone sending a letter from Atlanta to Seattle knows it’s going to take closer to the 5 days or the 3-5 day delivery).

If you look at small packages with UPS and FedEx in the Great Free Market, you’ll note that the costs don’t differ all that much. UPS charges $12 to ground-send a 2lb package from Atlanta to Charlotte, $14 to send it to Seattle, and $17 to BFE in the mountain west where I live. The Seattle/Charlotte price difference is about 15%. It’s higher with BFE, though I would expect that’s due in part to the fact that UPS isn’t already going door-to-door like the Post Office does. The extra costs associated with supporting less populated places are comparatively fixed. As such, disincentivizing people from sending and receiving mail to less populated places actually increases costs per item.

I realize this is slightly in conflict with my previous point about delivery to rural outposts (because the USPS operates at a loss in more than just the nowheresvilles), but only slightly. The reason that a carrier might be willing to take a loss on BFE isn’t to serve the people in BFE, but rather to serve someone in Cincinnati sending a letter to BFE. If either UPS or FedEx entered the letter-carrying business in a serious capacity, they wouldn’t want customers wondering if they will deliver to and from some rural outland at a predictable rate. While predictable rates don’t matter so much when it comes to packages, because the average joe doesn’t send those with any regularity, it matters for letters where you want people to send letters with as little thought and complication as possible. So, even operating at a bit of a loss on some items, can make the entire enterprise more valuable.

Is it worth price complexity in order to get an extra 20 cents on a letter from Atlanta to BFE? Perhaps so, for commercial mailers and packages (which already discriminate). But given how most letters are to and from comparatively nearby locations (because they’re bills) or alternately to and from one major city to another (where you’re looking at an extra five or six cents if it’s going cross-country), I’m not sure it is. My guess is that if UPS or FedEx ever did get into the letter business, they’d offer flat rates. FedEx already has flat-rate options on packages.

In addition to commercial mailers (wherein so much stuff is sent that they can account for more varying rates) and packages (which already discriminate and are not sent out with as much frequency), there is a potential exception here for Alaska and Hawaii. People intuitively know that these are special cases and can pretty quickly learn that if you’re sending a letter to one of those two places, you’re going to have to slap an extra dollar or fifty cents on the package. The main thing to avoid is different prices for everywhere, a letter to Sioux Falls costing one thing and Seattle costing five cents more, or a letter to West Jordan, Utah, costing one thing and Trementon, Utah, costing fifteen cents more. I seriously doubt it would be worth the fifteen cents for the confusion it would cause.

Will Truman

Will Truman is the Editor-in-Chief of Ordinary Times. He is also on Twitter.

76 Comments

  1. It’s worth noting that there’s really no compelling reason why we need to have door-to-door delivery of regular mail and small parcels. People already go into town to buy groceries and other necessities; why can’t they pick up their mail while they’re at it? For large apartment buildings, it probably makes sense to have home delivery, but I don’t think that home delivery for rural and suburban residents stands up to serious cost-benefit analysis. Granted, not having done that serious cost-benefit analysis, I could be wrong.

    It’s also worth noting that there seems to be a pretty significant overlap between people who think that sprawl is a great evil and that we should all live in walkable communities, and those consider it a moral imperative that we continue to subsidize sprawl through free-to-receiver door-to-door mail delivery.

    • It’s worth noting that there’s really no compelling reason why we need to have door-to-door delivery of regular mail and small parcels. People already go into town to buy groceries and other necessities; why can’t they pick up their mail while they’re at it?

      I was about to say that it would hasten Burt’s #3 in a big way, but actually, I have to drive out and drop off my mail anyway. It could create all sorts of problems for commercial mailings, though. People who have delivery to their mailbox stopped because they haven’t shown up in a week and it’s full of junk mail are going to demand that something be done about the junk mail, and therein lies what *should* be a revenue stream for the post office. So I can imagine scenarios where the cost-benefit analysis would actually favor door-to-door.

      It’s also worth noting that there seems to be a pretty significant overlap between people who think that sprawl is a great evil and that we should all live in walkable communities, and those consider it a moral imperative that we continue to subsidize sprawl through free-to-receiver door-to-door mail delivery.

      Good point, though if you go to red, rural counties and talk about doing away with the post office, you’re unlikely to get a warm greeting. This is one of those issues where ideology and lifestyle don’t entirely align.

      Anyhow, good points.

    • Brandon,
      I hate sprawl, and you can count me among the people who think door-to-door in rural areas is idiotic. Particularly 6 times a week! Do it once a week, and pass the “bill-laws” so that corps have to send out bills at least a week early. Presto, something that’s within the spirit of Ben Franklin’s postal service, and also within our means.

      • Two weeks early. Those people don’t go to town every day, or even every week. Worst case is one week for delivery from Post Office to rural home, then one week before the carrier picks up the response for return to the Post Office.

        One aspect of the New Deal that is seldom commented on is that it included a commitment that rural America would not be consigned to second-class status. They would get electricity; they would get phone service; they would get reasonable roads. Postal service seems like a reasonable thing to include on that list. I sometimes wonder if urban dwellers are having second thoughts about the commitment, and are willing to consign the areas of the country that produce the food and energy resources that the urban areas are entirely dependent on to a permanent second-class status.

        • Michael,
          I just want to kill the exurbs and suburbs. The rural people don’t cost that much, and if they’re willing to do a once a week thing, we can support that much. (thx for the 2-wk catch!)

          The rural electrification created markets for goods. I want rural internetification, as well — for a lot of reasons.

          I might like to reduce the number of rural roads, or at least their maintenance (without trucks, one figures the need for maintenance goes down dramatically,s o it may be a moot point). I do not know — argue me out of it?

          • Kim,
            A couple of thoughts.

            Road damage is a fourth-power law; mail delivery isn’t what beats up rural roads, it’s the 30,000 pound combines, the 50,000 pound trucks hauling grain from field to silo, all sorts of huge equipment that suddenly shows up when new drilling or mining is opened up. I did “last mile” technology studies for internet access for years; providing multi-megabit always-on near-universal internet access in rural areas will be extremely expensive, much more so relatively speaking than either phone or electric service was.

            I’ll point out that trying to eliminate suburbs in the West (the Rocky Mountain states to the Pacific Coast) will be a near-impossible undertaking. During and just after WWII, the federal government put lots of major job centers well out away from the city centers, and the private sector followed along. The result is multi-centered cities, where the “urban core” plays a smaller role. Getting rid of those Western suburbs involves relocating jobs, housing, and all of the relatively-new infrastructure that goes with them.

  2. Three thoughts:

    1. I’m sure statistics are available for how much USPS business is first class mail, second class mail, priority or overnight mail, bulk magazines, bulk mailers, nonprofit bulk rate mail, and unsorted advertising circulars, all of which provide different rates. My friends who are USPS carriers loathe working on Thursdays because that’s “Pennysaver Day.” Which is extra work for the carriers, but obviously quite a lot of income for the Service; bulk circulars like that are, to an extent similar to the first class mail, the financial backbone of the USPS business model.

    2. Technically USPS only has a monopoly on first class mail, but my understanding is that first class and unsorted circulars subsidize everything else to a large degree so FedEx, UPS, and other private competitors cannot really compete for anything done in bulk.

    3. Seems to me that the real competition in the future is going to come from intangible media — e-mail, twitter, e-books, and IM. Already I see e-mail edging out mail service of litigation documents in my Federal practice. If you and your recipient are already wired, it doesn’t make sense to send paper mail between you anymore when it’s now become so easy to FTP even large documents back and forth.

    • I’m sure statistics are available for how much USPS business is first class mail, second class mail, priority or overnight mail, bulk magazines, bulk mailers, nonprofit bulk rate mail, and unsorted advertising circulars, all of which provide different rates.

      Yeah, but the vast majority of people care about and send primarily one kind of mail: First Class. You can afford to make the other stuff more complicated because either people know that it’s variable (with packages, it has to be!) or because it’s either price-sensitive or time-sensitive.

      Technically USPS only has a monopoly on first class mail, but my understanding is that first class and unsorted circulars subsidize everything else to a large degree so FedEx, UPS, and other private competitors cannot really compete for anything done in bulk.

      I’ve heard that with regard to circulars, but I’ve also heard that they can actually lose money. Which blows my mind. Circulars are who you need to be sticking it to!

      I’m curious what you mean by “First Class”? First Class is now the vast majority of non-commercial mail is sent. Did you mean priority? Or am I missing something?

      If you and your recipient are already wired, it doesn’t make sense to send paper mail between you anymore when it’s now become so easy to FTP even large documents back and forth.

      No argument here. But as of now, I’m living in a world where I still have to pay water/disposal by check.

      • I mean by First Class mail the same thing you do. Priority mail is different, and more competitive in terms of quality of product with FedEx or UPS.

        • Okay, well that leaves me confused. If First Class is subsidizing everything else (along with circulars), why are they doing the other things that need subsidizing at below-market rates? I can understand taking a hit on First Class because nobody else does it and it’s a service for joe consumer, but shouldn’t newspapers, magazines, and books and the like pay for themselves since they are more geared towards commercial interests? If one is subsidizing the other, then it should work the other way. Is there a rationale for this that I am missing?

    • I do often wonder whether the Post Office is no longer even connected to the delivery customers, and is just a means for catalogs and circulars and coupon packets to be distributed.

      I think I might be one of the only people in America under fifty who still pays bills by mailing in checks. (The issue being, of course, that if I’m doing autopayments and someone in Billing slips a decimal point, suddenly I’ve paid nine hundred fifty dollars for a phone bill and my checking account goes flat and I’m stuck with the overdraft charges.)

      • Well, courtesy of the CARD Act, you should be able to avoid the overdraft charges now.

        Thus far I have never had a problem with improper billing. There have been some times when I’ve had unforeseen charges, though (I was recently automatically re-enrolled in the college football sports pack, for instance, and I got dinged with a bum phone replacement charge once). We keep a lot of buffer in our bank account, though, in case the I forget about a big outdraft like rent or student loans.

        • I have, but that was when someone “forgot” to cancel my account at a bank I will no longer use. It would have been profitable for them (had I been paying less attention/not had time to yell at the guy during work hours), so I have no doubt that it was intentional.

          • Several years ago, I got eviction notices from my apartment complex for failure to pay rent. Except that I had paid rent. They claimed they didn’t get it. The issue was that they wouldn’t accept rent checks from me, only from my roommate since his name was at the top of the lease (the lease was in both of our names), despite the fact that the check had an apartment number.

            I guess it’s partially going back to that where I worry less about some faulty amount getting sent through (which hasn’t happened) and more that the check won’t be cashed or won’t be attributed to the proper account. With online billing, it’s much easier to keep on top of. And they, unlike other people, don’t care who is paying the bill*.

            * – That’s another issue I’ve had. If something is in my wife’s name, sometimes they won’t let me pay it. It all comes from the same account. It’s possibly related to the fact that we keep different last names and they don’t *know* that we’re married.

          • Will,
            heh. renting. friend of mine had one of the Nazgul look at our “standard” rental contract. Found enough holes that we could have gotten every renter in the city out of their lease.

          • they don’t *know* that we’re married.

            And they worry that you’re keeping her? How quaint.

          • Mike, I think the issue is something of privacy. Less that they are worried about me keeping her. More than I am some obsessive schmo that is stalking her.

          • If you ever become obsessed with me, I can point you at some tuition bills.

  3. B. Berg appears to liken the “new” post office if his way was considered to the IRS tax codes for the federal government. Who could receive home delivery and who should not?
    If the post office were privatized, who would deliver Wash D.C. and who would deliver Los Angeles? What would it cost to send a standard business envelope and/ or a small parcel within those cities and between those cities.
    This current mess has been caused by Congress and can only be corrected by Congress. However, the way it will been done is telling.
    Example is the overpayment of CSRS and FERS future employee retirement health care costs. Compressing 75 years worth into a 12/13 year pay period, even in a good economy would be difficult, but during the worst recession in 80 years is a train wreck we’re in now.
    Give the post office back its overpayment in these retirement plans, which total anywhere from $55 to 80 billion, yes with a big “B” and all would be resolved for a very long time and nothing would need to change to a great extent.
    Remember, its title is the Postal SERVICE, not the postal corporation!
    Oh, and if the PO went under and e-mail was then the norm, do you really think the cost of e-mail would stay the same as it is now and would you be completely at easy with the security of important financial transactions on the internet for EVERYTHING you would do?
    Think of all the unregulated internet transactions that would occur constantly and no one is going to be in control of or responsible for. Do you want to trust electronic mail really??

    • If the post office were privatized, who would deliver Wash D.C. and who would deliver Los Angeles? What would it cost to send a standard business envelope and/ or a small parcel within those cities and between those cities.

      Ralph, did you even read my post? Cause that’s what it, you know, is about. But to answer your question, delivery would work the same way that private delivery now works. Presumably slower, and at a higher price.

      Oh, and if the PO went under and e-mail was then the norm, do you really think the cost of e-mail would stay the same as it is now and would you be completely at easy with the security of important financial transactions on the internet for EVERYTHING you would do?

      Email has no cost, Ralph. That wouldn’t change. They’re not keeping it free for fear that we would send letters to the post office instead.

      And as for financial transactions, well… yes. I pay over the Internet now whenever I can. I consider it a nuisance that waste/water won’t let me do that.

      Think of all the unregulated internet transactions that would occur constantly and no one is going to be in control of or responsible for. Do you want to trust electronic mail really??

      They already occur. Not through email, but through online bank transactions. I don’t have to think of it all in some vague, hypothetical sense. They. Already. Occur.

  4. Not one word, about the “BLOATED” postal bureaucracy? Another thing that has not been explained, why do the people in upper management continue to get large bonus as USPS goes down the tubes?

    • This wasn’t an all-inclusive post. There were a number of subjects I didn’t broach, such as the bureaucracy or the pension. In the former case, it’s because I am not as well-versed as some on the bureaucratic workings of the USPS. In the latter case, it’s because I believe that the pension issue is complicated. Namely, I am unsure that the USPS’s handling of pensions should not be the norm. The accruing obligations of pension plans makes me bonkers.

  5. Are people involved in this discussion, including the OP, aware that the USPS is sitting on something like $75 billion of their money (not taxpayer money)? They are facing a shortfall only because Congress will not let them access that money. Apparently there is some rule/law that they have to have enough money in some trust to cover the next 10 years. It sounds to me like this is money used by the fed gov for other things, much as the much-aligned SS money has been.

    I have no problem with no Sat delivery or picking up mail at some centralized location. Like most here, probably, I pay most (though not all) bills online, and conduct most other transactions as well. I think streamlining is long overdue. But this money situation rankles me, because the news stories generally imply that the PO is close to bankruptcy, which really is an oversimplification.

    • From what I’ve heard, they’re actually required to pre-pay 75 years of retirement benefits.
      Now, on the other hand, you’re quite wrong to call bankruptcy an oversimplification. If the USPS does not have enough liquid assets to pay it’s debts, then it’s bankrupt. Possessing large assets that the Feds say you cannot sell do not mean you won’t be bankrupt.

      • 75 years!!! I think you mean ten years. As for bankruptcy, if I have non-liquid assets, I think my creditors would be interested in these before I declared bankruptcy.

        The question, though, is why the federal government won’t allow access to these funds.

        • The question, though, is why the federal government won’t allow access to these funds.

          I believe it’s for the same reason that I don’t spend money earmarked for rent. Because they’re supposed to be dedicated to a specific thing. In this case, pensions. The money is already owed to someone else. That’s my understanding, anyway.

          • But if income is earmarked for rent payments then you shouldn’t lump the rent payment in with “expenses”, right?

          • Except no other government or private pension agency has to pre-pay it’s pensions 75 years in advance. If the Post Office had the same requirements as other govermental or private agencies, they would’ve been 2.8 billion in the black instead of in the red.

          • Except no other government or private pension agency has to pre-pay it’s pensions 75 years in advance.

            Jesse, that’s true… but maybe they should.

        • The news stories I’ve seen say they have 10 years to prepay all of their future pension liabilities.
          I’ve seen some commentators say that means for up to 75 years out but nowhere have I seen anyone put what pre-paying all their pension liabilities means in layman’s terms.

  6. Disclaimer: this is a complete, hand-waving, out of my ass theory, and I’ve never done any research to support it, so I’m likely way off base.

    Shortest possible (and vastly simplified): It’s all Lester Wunderman’s fault. Slightly more accurate: I blame these guys.

    It seems to me that the Post Office’s woes track, historically, with two things: the arrival of UPS & FedEx, which impacted their high-end business, and the massive increase in bulk mail from the mid-1970s to the mid-1980s.

    Look at what arrives in the mail. Two pieces of mail you want, weighing about 1 oz each, and a half pound of crap you throw away.

    Now, bulk advertising may have been the only market for USPS to grab at the time, but think about the change in mechanical infrastructure and people-process that you need to upsize your physical capacity to move all that bulk mail. 8 oz of junk for every 2 oz of actual mail.

    And of course, since that is a major industry, shipping 4/5 or more of total mail, they’re going to exert enormous downward pressure on their own cost-to-mail, which provides a pretty big incentive to the Post Office to give ’em whatever breaks they can.

    So FedEx and UPS are taking away the customers that need better guarantee of delivery of higher-end packages, and the Direct Marketing folks are replacing that revenue with a demand for fire-and-forget “it don’t matter if most people don’t even read it” mail.

    I had this theory before Jerry did.

    • “Disclaimer: this is a complete, hand-waving, out of my ass theory, and I’ve never done any research to support it”

      Wait… are you even allowed to do that on the internet?

        • It’s a truism of complex systems that they do not scale linearly.

          Going from “We deliver 3 oz of stuff to every doorstop in America” to “We deliver 10 oz of stuff to the same place” almost inevitably won’t increase your costs by a factor of 3.3.

          Amusingly, most business folk still assume that it’s not even going to increase their costs by a factor of *2*, because, well… “We’re going there anyway, right?”

          This is also why so many IT projects fail, but that’s a whole ‘nuther kettle of fish.

          • As a former student of those irascible Jesuit gentlemen, you’ve hit the bulls eye, Pat! Corporal punishment was not only allowed, it was recommended. There is something about a human hand deliberately hitting a human ear–boxing the ears– that that can cause fantasies of murder in the 1st degree.

            That being said, those Jesuits were damn good teachers. Phenomenally good and very , very smart. I wouldn’t hesitate for a second sending my kids to be educated these brutes.
            It’s no wonder they were thought to be witches and sinister magicians.

      • The DMA lobbies against it?

        Also, assuming USPS runs 80% (or more, by piece instead of weight) of their mail from the DMA…. that supports… well, some serious freaking percentage of what the USPS does, even at a hugely subsidized cost (assuming I’m right and all assumptions aren’t hooey, which is probable).

        If I can run an efficient, reasonable post office with 1/nth of the existing employees and 1/mth of the existing facilities generating a small but reasonable profit and essentially no DMA at all (since they’re paying for spam, really, and the economic turnaround for spam is very small; it only works if you get to send a ton of it for not much-to-nothing)… but I have to lay off all those folks and close all those post offices and routing facilities and whatnot, am I likely to pursue this course if I’m the Postmaster General?

        Probably not. This is hardly unique behavior. HP and the small computing market, anybody?

        Personally, given that candy bars now run a buck and change, I think $0.50/oz per item is a reasonable charge to send anything through the postal service. $0.44 to send a letter that weighs less than an ounce via first class mail is the current rate for us chumps that send personal mail. Sending bulk mail can be down to a quarter of that.

        Not sure quadrupling someone’s shipping costs for their primary method of advertisement is something they’re not going to scream bloody murder over. You’re killing jobs! Anti-small-business!

      • > Do you mind if he sends it to some of his
        > fellow co-workers?

        Everything I write is Creative Commons unless explicitly labeled otherwise. Share all you like, just give me credit for the work 🙂

    • That sounds exactly like what happened to pre-breakup AT&T. Long-distance was a necessity for business, so they could charge an arm and a leg for long-distance during business hours (somewhat less for off-hours, which was largely personal calls[1]). Long-distance subsidized the cost of maintaining local infrastructure. When Sprint and others developed the technology to bleed off long-distance customers, something had to give, and in a big way.

      1. Which makes rational sense as well. The big expense isn’t the call, it’s the infrastructure to support N simultaneous calls, so the marginal cost of a non-peak-hour call is close to zero.

      • The phone system is an excellent analogy for the postal service, Mike.

  7. “Generally from the Right: It’s telling that labor costs represent 80% of USPS costs, while only 53% of UPS and 32% of FedEx.” – This argument also neglects to mention that marketing and advertisement necessary take up a larger percentage of a private company’s budget.

  8. One more major misconception (that might be a little left and a little more right) would be that the USPS needs to run just like a business, while having it’s pricing model, product offerings, asset management, customer missions and service levels are all to a large degree (entirely for some of these), controlled by Congress.

    • I would replace “needs to” with “can be”, but yeah, that’s definitely an issue. We can have the USPS run like a business, or we can have congressional micromanagement, but we can’t have both.

  9. “Or the USPS could become the Rural Postal Delivery Agency, that simply takes the handoffs from UPS and FedEx beyond a certain point at a loss far less than the USPS is facing.”
    The losses would actually be far greater. The dense urban areas are very profitable for the USPS and private industry would love to take them on. Then who would pay for your Rural Postal Delivery Agency? The tax payer. A real privatizer’s dream.

    • Maybe, but it would be a ridiculously small operation in the Continental US. There are very, very few places that UPS and FedEx do not deliver to. Combine the very small scope of the operation with at least some hand-off income from UPS and FedEx, and I could see losses being pretty minimal. It comes back to the fact that there are very few places in the US where the big two don’t deliver.

      • “There are very, very few places that UPS and FedEx do not deliver to.”

        Well, there are very, very few places that they won’t charge you twelve bucks to take a package to. I’m pretty sure that if they were now looking at the volume of business in first-class mail, they’d change their tune to “you can get a box for free at the nearest UPS Store, or for fifteen bucks a month we can deliver a mail bundle once a week, or for thirty bucks a month you get the special ‘Regular Delivery’ service on Mondays and Thursdays”.

        • I’m not sure it will be *quite* that bad, but…

          It is likely that prices would go up, though, and service down, even in a better-case scenario where they do pounce.

  10. Strike two, Heidegger. You’re exactly right that your now-deleted comment aggravated me. Unfortunately, I’m not just a “fellow poster and commenter,” I’m a host here. That means it’s my rules (Will’s, too, of course). That your non sequitur is also an attack on a man who has done me a great favor in hosting the blog on his website, and for whom I have significant intellectual regard, adds no luster. This will be your final warning — stay on topic or enjoy bannination. The choice is yours.

  11. Some interesting points, but you miss the main one: as things currently stand, other services are legally disallowed from overlapping the Post Office’s letter delivery, and most specifically disallowed from delivery to P.O. Boxes.
    So, what of areas where the Postal “Service” does not do door-to-door, and the residents are REQUIRED to maintain a P.O. box for letters and 1st class packages???? UPS and FdEx are not allowed to step in…
    Furthermore, FedEx/UPS charge a higher rate to deliver parcels to residences than they do to businesses! I’ve always found this unfair.
    Oh–did you hear? UPS and FedEx are merging…the new company is going to be called, “FED-UP”!!
    😀

  12. The problem with texting and email is texting is very brief, email is laden with spam and repeat ads to the point of how many do I tolerate before I dump them in the trash or black-list them. Texting has little to no graphic content and email can bog your computer with overwhelming graphics and scripts running you have no control over. Email is a security risk to anyone’s computer getting past firewalls with the ease. With the mail system you get an actual graphic ad or letter that has legal significance and many of which are witnessed by the delivery person and recorded for legal reference. That infrastructure is IN PLACE. Does it need tweaking from time to time, yes. Are unions a pain in the #@@ yes. But you as a lawyer know as well as the next guy, the union is a legal entity just like you are and defends, protects and bargains for conditions of labor, not unlike you for your clients. The 80% cost to profit is a no-brainer for a non-profit-keep-costs-under-inflation public service monopoly. It takes people on a massive scale to deliver mail, packages, and legal documents to 150,000,000 homes 6 days a week, 0r even 5 days a week. You wouldn’t want much of a profit margin in that kind of operation, just enough for a buffer, and enough to cover the basic needs to do operations efficiently.

    • is laden with spam and repeat ads to the point of how many do I tolerate before I dump them in the trash or black-list them

      And they just stole the idea from ‘junk mail’. My spam filter is considerablely more effective than unsubscribing to mailing lists.

      Email is a security risk to anyone’s computer getting past firewalls with the ease

      Unless you’re at a common point delivery location (like an apt complex or office building) most mailboxes are not even locked.

      • Not to mention that millions of homes have street mailboxes that are completely unsecured.

      • Nitpick:

        Email is not a security risk to anyone’s computer.

        Embedded binary attachments that are capable of leveraging application space are a security risk to anyone’s computer. Disallow attachments and 99% of the security risk associated with email disappears into the aether (the rest is properly going to be the fault of the web browser, not the email client).

        Also:

        If you rely upon a whitelist rather than a blacklist, you’ll get rid of almost every piece of mail you don’t solicit (all of it, if you require PGP-signed mail). This requires you to maintain a white list; nobody can email you until you authorize it.

        You don’t really have this option with mail service.

  13. The number one customer of first class mail is the government, the same one that created the Internet. Anyone know why? Could it be that the Gov’t is sending a subtle message that they don’t trust the Net?Could it be they realize the Net can be hacked and personal and private info can be accessed and misused ? Ever had your credit card hacked through online usage? Did it ever get hacked through using the mail? The Gov’t trusts the number one trusted Gov’t. agency, the USPS, with gauranteed sanctity of the mail for private and personal communications . Hmmm, could there be a grain of truth somewhere in some of this…….?

      • Of course they do, just not for the most sensitive communications. To assume ther Gov’t doesn’t use the net or e-mail is ridiculous. They use the mail when they want to send something that won’t be intercepted or hacked or hijacked . E-mail and online transactions can be intercepted and hacked.

        • > Of course they do, just not for the most
          > sensitive communications.

          This is misleading.

          Lots of sensitive communications travel electronically (see Wikileaks). Lots of other sensitive communications travel electronically but not via the Internet (my coworker is an ex-Air Force communications specialist).

          Almost nobody sends secure stuff in the mail, unless they’re engaged in a one-off purloined letter sort of deal.

          • I would expect that the most sensitive stuff is either sent electronically through more secure channels or, if it’s physical, by courier, rather than handing it off to the USPS. With the USPS (or any delivery service), you lose chain of custody.

          • The most sensitive stuff is sent by sending the people that have the most sensitive stuff in their heads.

  14. @Patrick, I beg to differ with you. Not every computer user has the skill to create white lists. Apartment Complex mail systems are all secured by an arrow key, and can only be opened by the assigned tenant or the Mail Man. Curbside mail receptacles can be replaced with security mail boxes at the residents discretion. Every security measure anyone takes is only a deterrent and can be breached. Everything is a matter of degrees. Signature mail is presented to a responsible person before it can be delivered which is true with UPS, FedEx and the U.S.P.S. . The more security you create the less freedom you have especially since 9-11.

    • > Not every computer user has the skill to
      > create white lists.

      You need to parse that last sentence again. Does this say something about email, about embedded security apparatus in email, about computer users, or about people who design things for computer users… or a combination thereof?

      > Every security measure anyone takes is
      > only a deterrent and can be breached.

      Certainly. There are two corollaries here. One: it is difficult to design a reasonable security system when the value of the thing being secured is less than the least expensive security countermeasure. Two: given an implacable enemy and innumerable targets, your security apparatus will quickly become irrelevant to your actual security.

      > The more security you create the less
      > freedom you have especially since 9-11.

      This is a false dichotomy; it requires a very age-old but still incorrect view of security apparatus as distinct from audit process.

      Generally, the more security you add, the more difficult it makes it to operate. *GOOD* security isn’t simply a matter of instituting restrictive rules, however (in practice, these sorts of implementations really don’t work well at all). A good security system must come part and parcel with a good audit mechanism, or you don’t really have a security *system* at all.

      And a good audit mechanism prevents a good security system from unnecessarily impacting freedom.

      We’re generally really bad at this, granted. But it’s not something that is impossible.

  15. @Will Truman, as far as losing the “Chain of Custody” as you put it, there is mail such as signature tracking, signature confirmation, registered mail, and express mail just to name a few that show the chain of custody, and are scanned and each carrier is assigned a scanner with a document history that scans that mail and now we scan as accepted when we pickup prepaid postage items from Click-n-Ship and Stamps.com.

    • A goodly portion of the people in that chain do not have top security clearance, nor are they members of the government agency responsible for security. Being able to track a package is not the same as having personnel control over who carries it.

  16. @Will Truman you said “Generally from the Right: It’s telling that labor costs represent 80% of USPS costs, while only 53% of UPS and 32% of FedEx” but what most are missing about the USPS is that we are mandated not to make a profit so the margins are slight and overhead is the People and vehicles used to distribute the massive amount of mail to 150,000,000 addresses, (which include P.O. boxes,) and if we were in fact a for-profit company that margin would more closely match the others.

  17. Prepayment is not for pensions, (already overpaid by billions) but rather, future retirees healthcare. And yes 75 years worth on a ten year schedule. This means that people who don’t even work at the post office yet, (and in some cases aren’t even born yet) future healthcare is paid for.

  18. Perhaps none of you are aware that you do NOT have to have USPS deliver mail to you? Fill out a card and cancel all delivery. Done.
    Fill out a different card and no junk mail, flyers …

    Perhaps none of you are aware that in exchange for using UPS planes (after 9/11) in place of passenger planes, the USPS delivers samll packages FOR them?

    Our hicktown PO gets a semi-truck load every day.
    UPS has fewer employees, fewer vehicles and goes to fewer places. It does not have the pension liability imposed on the PO in 2006.

    Just a thought. 🙂

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