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Saving the Postal Service ... Everybody's Now An Expert!
Monday 10/17/2011
What's really happening inside the beltway? It's politics at work and it
ain't pretty.
It's no secret that the USPS has been losing First Class Mail volume and
revenue for the last decade. It's no secret that the USPS has operated with
labor representing 80% of its costs forever. It should be no secret, since many
of us have publicized it, that the USPS has a network that can support the
processing, distribution and delivery of 300 billion pieces of mail each year
while volume in 2011 and beyond will only reach about 165 billion pieces per
year. And it should be no secret that until recently, a scant minority of
Congress couldn't give two hoots about the Postal Service except for naming post
offices. Funny how that has changed since the USPS became the flavor of the
month on cable news and in the press. ... Now everybody on Capitol Hill seems to
be the expert and has the plan to fix what ails the Postal Service.
What does that mean? It means the fix will happen through legislation from a
Congress and Administration that can't or won't agree on anything. At this time,
there is only one bill that is moving and that is H.R. 2309, the Issa-Ross
Postal Reform Act of 2011. It was passed through the full House Oversight and
Government Reform Committee last week. While there are some parts of this
legislation that can be supported by Quad and the mailing industry, it’s far
from acceptable. But it does start to move the process along, and that is
progress on getting something done to facilitate getting the Postal Service back
on solid financial footing for the long term. A similar bill in the Senate that
was proposed by Senator McCain is not expected to move through a
Democrat-controlled Committee.
Some in DC think that it's as simple as returning the pension fund
overpayment (about $50-75 billion) to the USPS so it can pay off the required
prefunding of retiree healthcare ($5.5 billion annually for the next 10 years).
That would solve the problem for about 12 months. But if you don't right-size
the network (i.e., facilities, transportation, equipment and people), we'll be
right back in the same predicament. NOTE: You should know that in the whacky
world of government logic, returning money that is rightfully due the USPS
actually scores; negatively on the federal budget (that is, it magically
increases the deficit).
Some in DC think it’s as simple as raising
postal prices by 10-15%. (Does raising taxes to correct the budget deficit sound
familiar?) But we all know that would result in a mass exodus from the mail and
a huge hit on the printing and mailing industry.
Will any legislation find its way through the House, the Senate and
the President's desk any time soon? Most in the know would bet against it. But
there is also this little group called the Super Committee that was created to
come up with the start of a fix for the federal budget deficit, and it's
possible that something could be included within their proposal that would
impact the Postal Service and the printing and mailing industry. Their decision
is due by November 23, and it’s questionable whether they will even be able to
agree on a recommendation. But the lobbying process has already begun.
With all the activity in Congress related to the USPS and the many varying
proposals, it's logical for those who are in the business of the mail to
wonder how this will impact postal prices. And with all the inactivity related
to getting anything done, if anyone knows the answer to that, please let me
know.
3 Comments
>>
posted by
Edwin Bublitz
on 11/8/2011 2:31:51 AM
I am no expert on the postal service, yet I have been reading about everything that has been published about their situation just because working in the printing industry I know how this impacts our position.I realize our company does everything possible to minimize postal costs for customers and individual households are doing the same i.e. internet mailing. Although if an organization is spending 80% on labor, something is seriously out of whack. Consider this, if every industry spent that amount on labor how many would there be? Was there at one time an enormous money pile that seemed it would only get bigger that nobody in management or labor cared. I as an employee wants my pay to reflect my contribution but I also want my employer to be showing a profitable growth so improvements and new technologies can be integrated to maximize results and I would seriously think this could not be done with a remaining 20%.I knew the USPS is having problems but this is I guess something I wish I had not heard.
| report abuse |
>>
posted by
dan
on 11/10/2011 1:37:37 PM
They could cut costs by eliminating those inspectors that we all know and love...o.O
| report abuse |
>>
posted by
John
on 5/24/2012 2:02:57 PM
80% Labor and benefits are not as bad as you think - considering that the USPS is not allowed to make a profit. - There was never a big pile of money the labor cost etc were designed to stay afloat with inflation. - when you look at graphs that show when increases in inflation and the associated incease in Mailing cost you would see that the USPS - normally after a price incease - make a profit for the first year, maybe 2, but then spends that profit over the next 2 years before the cost of mailing goes up again - the 20% is supposed to be used to upgrade and modernize equip.
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3 Comments
I am no expert on the postal service, yet I have been reading about everything that has been published about their situation just because working in the printing industry I know how this impacts our position.I realize our company does everything possible to minimize postal costs for customers and individual households are doing the same i.e. internet mailing. Although if an organization is spending 80% on labor, something is seriously out of whack. Consider this, if every industry spent that amount on labor how many would there be? Was there at one time an enormous money pile that seemed it would only get bigger that nobody in management or labor cared. I as an employee wants my pay to reflect my contribution but I also want my employer to be showing a profitable growth so improvements and new technologies can be integrated to maximize results and I would seriously think this could not be done with a remaining 20%.I knew the USPS is having problems but this is I guess something I wish I had not heard.
They could cut costs by eliminating those inspectors that we all know and love...o.O
80% Labor and benefits are not as bad as you think - considering that the USPS is not allowed to make a profit. - There was never a big pile of money the labor cost etc were designed to stay afloat with inflation. - when you look at graphs that show when increases in inflation and the associated incease in Mailing cost you would see that the USPS - normally after a price incease - make a profit for the first year, maybe 2, but then spends that profit over the next 2 years before the cost of mailing goes up again - the 20% is supposed to be used to upgrade and modernize equip.