Tag: USPS

Don’t Privatize USPS

Please text “USPS” to 50409 so that a letter on your behalf can be sent to your state officials petitioning to make financial support of the USPS a priority.

Privatizing USPS seems oddly short-sighted from a bunch of people supported by rural voters. Privatizing the post office may be a bit of OK for people who live up in NYC or down in Miami — they can stop subsidizing delivery out to a cabin in South Dakota that sits on 11,000 acres. Never got much mail, so I don’t know if post office had one employee whose daily route was like eight houses or if delivery was once a week. It’s *not* great, however, for large, low-population-density swaths of the country (i.e. a good bit of the Republican base).

As a private enterprise, increasing profitability is the goal. The Post Office has studies that go into new-line-of-business ideas that are quite clever. They’re paying someone to drive by grandma’s house anyway … you pay a few bucks a month and the delivery person will ring the bell once a week to make sure grandma is OK. It’s *possible* the privatized USPS, without restriction on what they’re allowed to do and what they’re allowed to charge for their services, will branch out into a bunch of lines of business centered around “we have someone driving by there every day anyway”. But petrol is expensive, vehicle maintenance is expensive, and people are very expensive. You see anyone going with an all-electric fleet powered by on-site wind and solar? I’d guess contract workers with no benefits.

If I were operating neo-USPS, I’d become the largest interest-based advertising agency around. Sure, targeted advertising wouldn’t be as many pieces of mail as the grocery flyer that is sent to the entire postal code, but my cost per unit would go up because it’s targeted. And reducing the number of recipients cuts delivery cost. I’d probably sell ad space that I stamped onto mail transiting my system. I’m paying someone to get this delivery to you either way; why not make an extra cent by throwing an ad for a pizza chain on it? Throw a jewelry chain’s logo on the cancellation stamp. Stamps themselves are ad space. And when I don’t sell all of this ad space? I’ll donate it (tax writeoff) and have promos for non-profits.

How will mail delivery work in my neo-USPS? Specifically in rural parts of the country? I’d noticed Amazon pick-up lockers outside the one grocery store in town — that might be a way to keep a relatively local pick-up point. But it eliminates “Postal Customer” delivery … which I suspect is a good bit of the current revenue and an increased share of my new company’s business model. Turning the post office into a package delivery service probably isn’t the way to go. The model I’d follow is called “general delivery” now. I have a few friends with remote off-the-grid type homesteads outside of the carrier delivery area who use this free service. Address a letter to “Bob Smith\nGeneral Delivery\nPost Office City, State ZIP” and the letter/package sits at that post office location waiting for Bob to pick it up. The post office holds mail in the back for x days until they swing by. Which then means they’ve got to swing by the post office every so often.

Unlike PO boxes where the outer area is open 24×7 and you can open your box at 7P on the way home from work or 7A on the way to work, you’ve got to arrive when they are opened and staffed. Office in my town is staffed between 8:30 and 5 with an hour-long lunch break at 11:30 (and open 9A and noon on Saturday). But I’m certain privatized USPS will have better hours. Down side, though, is they’ll have far fewer locations. There won’t be an office five minutes from my house — it’s inefficient. There will be a few offices in Cleveland and the major suburbs. I’ll be getting my mail out of Strongsville or Parma. Maybe Brunswick or Medina. And I live in an area with decently high population density. That cabin out in South Dakota? I’d be driving up to Rapid City about two hours (each way). Four hours of driving? That’s a day right there — my quarterly “stock up in town” trip would become a monthly run.

Trump, Amazon, and USPS

May have figured out how Trump managed to lose so much money — he doesn’t know the difference between losing money, making money, and breaking even. The post office does not lose money on delivering packages. I don’t know this because I’ve got insider information on their contract with Amazon, but I do have access to the text of American legislation. The Postal Accountability and Enhancement Act disallows the Post Office from selling package delivery under its cost. Now you can debate the cost calculation – the real issue being disputed by FedEx and UPS is that the Post Office doesn’t have to include all of their delivery costs in package delivery “cost”. Why? Because they’d have carriers driving trucks all over the country even if there were on package delivery service. Of course this gives the Post Office a huge advantage in their package pricing model. And, yeah, that sucks for FedEx and UPS. But it’s sucked for FedEx and UPS for a LONG time.

The Post Office may just be breaking even on it’s Amazon contract – but as the package delivery “cost” does include some operational expenses … well, Amazon is saving American tax payers money because package delivery does include 5.5% of the fixed operating costs (I assume to cover additional cost created by package delivery service). Sure FedEx and UPS have to include 100% of their fixed operating costs in their pricing model, and if Trump wanted to talk about how providing package delivery services is unfair to private industry … that’s a discussion. But I doubt any commercial venture is going to delivery mail every day across the entire country so it’s up to the government. And providing package delivery and shipping services in urban areas (where it would be profitable for a private corporation to operate) subsidize delivery out to the cabin I stayed at in South Dakota. If the Post Office could be charging more for its services … that’s a discussion. Except do you want to pay more to ship packages and mail!?! And if we want to delve into the financial nuances of the Post Office, let’s look at their pension pre-funding requirements.

How does a guy who claims to be all about business deals think it’s bad for a corporation to use the service that provides them a cost advantage?!? Unless Trump thinks he can start tariffing the bloody post office (or, more accurately, have the legislature change the suppositions they are permitted in their pricing model) … Amazon would be outright silly to voluntarily pay more to another carrier.

And how does a guy who claims to be all about negotiating wins for American citizens think it’s a bad deal that the Post Office is making money off of Amazon instead of FedEx or UPS doing so? Say they *do* change the postal pricing model to make it “fair” to UPS/Fedex (or just outlaw package service from USPS). Our tax money is still paying for postal carriers to drive all over the country to delivery mail, Amazon Prime memberships cost more, but hey UPS is making bank. And … that’s what really matters?!?

What they’re really upset about is that the post office used to be a crap shot of getting something to “Point B” even without getting into SLA’s. You paid extra to FedEx or UPS to make sure it actually *got there*. Now the three services are equally reliable … which means government managed to provide a service as good as private industry.