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Robert Winner

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Debate: US Postal Service.

The US Post Office is a independent operating agency of the US government that is subject to Congressional Control.The PO lost 15.9 Billion in 2012 and 5.1 Billion in 2011. The major reason the PO is going south is a requirement of Congress called the Postal Accountability and Enhancement Act of 2006 which requires the agency to pay 5.1 Billion a year into Future Retirees Health Benefits for 75 years into the future. This is the only federal agency to have this requirement.

The PO has 574,000 workers and the largest vehicle fleet in the world (218,000 vehicles). Just put put this into perspective.

The question is can the PO continue to operate under continuing losses. Since the major problem is the Congressional Act why not have Congress repeal a 5.1 Billion dollar requirement of a agency that only showed a profit of 1 Billion the year before the requirement went into effect.

The PO says they can come closer if they eliminate Saturday deliveries and close rural postal routes and small town post offices.

I am sure that there are other areas of concern I am missing here.

Can TED members collectively suggest a means of saving the Postal Service.

Topics: economics society
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  • Nov 19 2012: We need a new vision of what the postal service is and what it provides.
    When postal services were formed they were critical, but with digital communications we need a new vision.
    It is currently a government subsidized social service.
    90% of what it delivers can probably be served better by private industry.
    80 % of what I receive is junk mail and it goes straight into the recycling.
    The only people that need this subsidized service are people that live > 20 miles from the nearest population center.
    Its a social service that is nice to have but is a relic.
    The current waste of tax payers money could be minimized by:
    Initially cutting deliveries to three days a week then cut it down to one or two days a week.
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    Nov 19 2012: I have had close involvement in the Australian postal service over the years.
    I am not sure about US legislation or the issues surrounding it, however I can say this:
    Governmental postal services have built the best, cheapest logistics distribution service in the world.
    Having worked for corporate logistics distribution organisations, i can say with some authority, that the priate sector cannot hope to compete with a postal distribution service created by people who wanted it as an essential function of representative government. A postal service is a clear example of the power of social capital at work.
    In this regard, i see anything that represents essential infrastructure is equivalent to the judiciary.
    A nation cannot afford to hand over essential infrastructure to non-national control. The practice of this delivers government into the hands of the non-representative and creates a nation within a nation.
    On the other hand, the management of community capital cannot be granted to a government if it is not truly representative. I would argue for de-centralisation, rather than privatisation.
    And (in the voice of GW) "make no mistake" - private logistics companies are investing enormous resources into destroying national postal services - they simply cannot compete.
    If you want a good postal service - keep it public and pay for it, My private logistics friends will screw us all if they win.
    • Nov 28 2012: Decentralization of the postal service is an interesting idea. How would it work? If it were decentralized, wouldn't it lose all the advantages it has over private postal services?
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        Nov 28 2012: What you decentralize is the operation - which is divested to community ownership. The definition remains global - including standards and best practice.
        Traditionally, we have sought to do this by 2 methods:
        1 Wholesale privatisation (whole of operation) and
        2 incremental serice provision through commercial tender (last loop pickup/delivery and private post-office operational ownership).
        Option 1 fails because private operations compete - part of that competition is de-standardisation created to prevent inter-dependance and create brand definition - thus fragmenting the service and destroying economy of scale.
        Option 2 has mixed results. Local private ownership of a post office brings the operation into the local community dynamic, while last-loop delivery reduces service quality through competitive operational cost-cutting. So, for instance, the post office becomes a friendly place where you feel comfortable accessing the service, but parcel and registered deliveries are often not executed - and a card is left to shift the delivery back to the post office over-the counter.
        THere remains the function of central coordination. This might be divested to a body representative of the local operation owners. Common infrastucture might be provided through small-scale integration of aagreed global standards.
        The competitive capitalist system works well in matters of strict reciprocity - community capital is not well served by it. The practices of the distribution of resources need to be re-defined to allow local representation in community services - If the community wants them. Funding is then divested from central allocation and delivered as the responsibilty of teh community to fund whatever level of capital infrastructure they deem appropriate - along with service pricing.
        The need for trunk-line distribution then becomes the overview of teh jurisdiction in which it operates - hence state and federal.
        Alternative would be cellular distribution hand-off (inefficient)
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        Nov 28 2012: I'll add that a detailed reply would take a while.
        The important principle being to match the community valuation of the service with what actually gets implemented. COmmunity infrastructure tends towards quality - and longevity, while commercial service always seeks to reduce quality in order to increase efficiency - at some point, the service quality fails the definition of the service.
        • Nov 28 2012: This sounds like a good solution to me. Decentralizing the service would allow for local needs to be met more appropriately: urban communities can do what suits them, and rural communities get what they need. If I understand correctly, sending from one local branch to another would then operate kinda' similarly to the way one sends between different countries: The sender pays according to the information the sending country/local branch has about the recipient country/local branch's shipping rates, etc., thus ensuring that costs are covered for any cheaper (urban) shipping portions of the trip as well as more expensive (rural) portions of the trip. Is that right? At the same time, urbanites aren't forced to subsidize rural postal delivery via government taxation. They only cover those costs if they're actually shipping there.

          I hope I understand correctly... If I do, then I think you may have an idea worth sharing here, Mitch!
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        Nov 28 2012: That would be the cellular model.
        However, the trunk and long-leg parts of the distribution network are not well served by the cellular model. This would probably be best served by state and national standards - and, would be nicely covered by commercial operations - so long as a standard system integration is imposed. This bit is still funded by taxation.

        I can concieve a fully functional cellular community distribution model, but it would require significant cultural changes for acceptance. The hybrid local/state/national/company model is good for now.
        Al lI am proposing is the re-ownership of local postal service by the locality. In most western countries the duty is expected from the state authororities - which I think is an inapropriate divestiture of community responsibility.
        To re-integrate that civic responsibility, one would need only withdraw the state service amd offer it to defined communities to take-up within a set postal standards which would apply only to the hand-off points. Even being a small change, it would generate a lot of political resistance. However, if it waas implemented, each community would work out for itself how the local distribution loop was operated.
        Rural distribution will always carry greater expense. In such cases, it is an opportunity cost. If one is conducting agricultural activities in such communities, then the cost would be reflected in price of produce. Large scale agriculture usually has no community to speak of, so the distribution cost would remain with the individual or company. Small service centres should have no problem manning a postal service on a part time basis. Being answerable to their own neighbors would ensure adequacy of coverage.
        Either way, communities which claim ownership of of community utilities will derive stronger community function. Delegating suich things to distant central authorities and companies has the affect of disrupting civic identity - which is a powerful source of national prosperity.
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    Nov 18 2012: 1. Force community mailboxes to be installed for all old neighborhoods with a mailbox in-front of every house. That should cut back on fuel and staffing needs.

    2. Convert USPS vehicles to electric and manage routes to match range of electric vehicles.

    3. Reduce or eliminate retirement benefits for USPS employees.
    • Nov 28 2012: The first two are good ideas, I think. The first one in particular would create a sort of forced social meeting ground that has largely gone lost since we began living exclusively inside our own little private bubbles (cars, garages, fenced homes, etc.).

      Given that the USPS does not pay super-high wages, though, wouldn't eliminating their retirement benefits just force us to publicly fund them in their old age anyway? As workers, they've a right to retirement benefits, no?
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    Nov 16 2012: Privatize the Postal Service, as some of us have been demanding for over 30 years. Or just allow private businesses to offer service to postal mail boxes, and see who offers the cheaper, more efficient service.
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      Nov 19 2012: we already have private competition of delivery and mail boxes and USPS fees hurt much less specially to small business. if you eliminate government in the competition, no one will be able to afford FedEx and UPS hikes.
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        Nov 28 2012: Taxpayers should not be forced to help pay the mailing costs of small, or big. business, especially if the money is used to distribute unsolicited, unwanted, unproductive and wasteful junk, oops sorry, bulk rate mailings. Besides, business passes the cost along to the consumer.
    • Nov 19 2012: There's no way private businesses will be able to operate for lower prices since the US Postal Service is already running huge losses with the current prices. You also have to factor in that the mail business is a natural monopoly business since people will never get used to putting their letter in the mailbox of one specific company only (especially when the mailboxes of other companies are closer) and there are many small towns and rural areas where there's only room for one postal office and/or mailbox.
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        Nov 19 2012: USPS is running huge losses because it's inefficient and its employees are grossly overcompensated. The phone company used to be a 'natural' monopoly too until the federal court decided more wisely, to the benefit of us all.
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    Nov 28 2012: Do we want to ensure at a constitutional level that there is always a way for someone to send a physical message or package from one person to another at a reasonable price? I think that may be what's at issue here. While there may be private delivery companies that can provide this service today, historically that was not always the case. Do we want a guarantee that no matter what, this capability is preserved? What if, god forbid, FedEx, UPS, DHL, and so on some how either went bankrupt or raised their prices such that the average person could not send a letter to another person. Is this a right that we want to preserve as part of our American society? It would seem much of our legal system presumes the ability to deliver notices to mailing addresses. Do we want to have a backup system in the USPS on stand by just in case?
  • Nov 21 2012: It seems to me that the USPS is subsidizing junk mail and magazines by the rates charged for letters and parcels. If a cost per weight were charged for bulk mail that was comparable to cost per weight for parcels it would become prohibitive -- in other words, no more junk mail.. That would be a very small intrinsic loss to society, especially now when catalogues are available online. Without all that weight to transport there would be far fewer trucks and drivers, losses might even totally be eliminated, and all the local offices could remain open with the same frequency of delivery.
  • Nov 20 2012: I believe that the post office needs to close down its operations where residents will receive mail 3 days a week. They will have less people cover more routes but not show up to your house every single day. I can honestly say that only about once a week do I receive something important in the mail. Our government should not be providing $5 Billion Dollars a year to them. The market is signalling that the demand is not there, we need to let the free market work. Who knows, maybe we only need mail once a week?
  • Nov 20 2012: Wife and I use to do allot of eBay, we would send the item from Ohio on Monday via First Class and know it would be delivered to any address on the continental U.S. by Friday, and usually by Wednesday. Priority mail performed as advertised for a competitive price.

    Then I had an experience with privatized mail. I "mail ordered" a package of east which was sent here to Ohio from Main via FedEx Smart mail. Smart Mail cost more than First Class and took about two weeks. I had a tracking number so I got to see the data saying how the package of yeast sat on a shipping dock mid way between here and there for about a week. This is wholly unacceptable.

    Another unacceptable performance from non-USPS carriers is how I've had merchandise delivered and simply dropped on the doorstep. Last time it was a KitchenAid Pro6 Mixer. USPS, if the item can't fit in the box delivers a notification of a waiting package and holds that item in a secure location until the package can be picked up.

    Those of us who do small commerce, need a reliable carrier who performs their duties in a timely manner at a good cost, we think the Post Office should be saved.

    Saving the post office will probably require the closing of offices, or reduction of hours, and reduction of service days.
  • Nov 19 2012: The more important question is not about how much we pay.

    The more important question is, do we want to continue to support the infrastructure of democracy?

    Democracy does not need the postal service we now have. The postal service we now have was meant to serve a country that was 90% rural. The postal service is obsolete.

    Democracy does require communication, for ALL citizens, regardless of their ability to pay.

    In a country where most people now live in cities, it is easy to forget or ignore the minority that live outside the cities. We do this at our peril. We have already learned the lessons of divisiveness and exclusion. The benefits of private enterprise are obvious, but the disadvantages can make it impossible to support the ideal of legal equality for ALL.

    The lobbyists of the phone industry were very effective in getting permits to service whatever portion of the population that THEY chose. They chose the most profitable markets. Where I sit right now, I very often cannot get cell phone service. That means that in order to have reliable service, including 911 service, I have to pay for a very expensive land line. For most people, the privatization of phone service was beneficial. For some of us, it means higher expense and less service. For some locations, it means no service.

    Operating the Postal Service as it now exists is just plain stupid. It is inefficient and ineffective. Many courts are now changing their rules to require electronic filing of many legal items. If we want legal equality for all, we need fast, high quality electronic communications for all. This could be accomplished within the private sector by changing the requirements for their licenses. IMO, it would be wiser for the government to establish a wireless network of cell phone and internet nodes, then lease time on the network to the private service providers. This would have the added advantage of keeping the network immediately available for crises.
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    Nov 19 2012: I so rarely use the postal service it's hard for me to understand the value of operating that agency at a loss to begin with. I'm familiar with some of it's historical value, the pony express, and so on. I don't mean to disparage the postal service - I'm really asking if we could have some discussion of the value of the postal service today, because I think that discussion could spark ideas to save it. At least from me.
    • Nov 28 2012: I have to agree here. I think we should start not with the question of how we can save the USPS, but WHETHER we should save the USPS. Demographic, geographic, political, economic, and technological conditions now are dramatically different than they were at the time the USPS was designed in the manner it still exists today.

      Do we even NEED a publicly funded postal service anymore? If so, WHAT do we need from it? Let's re-design it around those needs.
  • Nov 19 2012: "Can TED members collectively suggest a means of saving the Postal Service."

    Raise the US Postal Service's prices of stamps, or privatize and end up paying more for stamps as well.
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    Nov 19 2012: Only one person, TED Lover, supported the 5.1 Billion dollar a year health plan. I thought that this would be the center peice of the conversation. I was wrong. So how about this. Since Obamacare will come into effect in 2014 and applies to all citizens (except for elected federal officials who opted themselves out) the Requirement should go away as health care is now provided (almost) equally under law. The requirement being met the need no longer exists.

    Without the 5.1 billion dollar requirement a plan is feasiable to recover the service. Further, the money invested should be refunded proportionally to the expenses already obligated. That would be a good hunk of change that should go to upgrades and rainy day funds.

    As Edward stated the term Independent Operating Agency of the US Government is an oxymoron. In my brief readings and limited understanding of the USPO, Congress is the major problem. Having said that, I would also consider Unions to be a problem to the effective operation of the agency. The USPO HQ is shown in the home page a downtown Washington DC 10 story building. That would suggest that there is high executive staffing, high maintenance costs, and overhead expenses as in all federal "controled" agencies. So start at the top and weed out the fat prior to pruning the workers. Sell the expensive property and relocate to a more reasonable location and a much smaller facility. This savings would also go into the account.

    Congress need to decide if they "own" this agency or not and butt out. The surest way to bring it down is federal intervention and management. So here is a plan:

    1. Everone under Obamacare (except the privliged class) Refund the money collected.
    2. Reduced the HQ staffing
    3. Sell off expensive property
    4. Get out from under Congress
    5. Reorganize to fit the budget requirements and adjust as necessary.

    This is not everything needed but would be a heck of a start.

    Whatchathink?
  • Nov 19 2012: When in the past year have you:
    - received something via postal service that could not have been delivered via e-mail
    or
    - received something that could not have been delivered by a non tax payer subsidised service

    For me it is never.

    If the USPS cant support itself it should fade away.
    • Nov 28 2012: I think it's important to ask UNDER WHICH CONDITIONS it can support itself. Under conditions of federal meddling in its affairs? Or under free-market conditions in which it is left to contend with competitors on its own? I think it's clear it's not doing well bogged down under federal regulations. But could it be a valuable service if the government took its hands off of it?

      That is the question to ask, I think!

      (And to answer your questions: Never and never. But the "could not have been" are the operative words in your questions. It might be more appropriate to ask: Could I have received them cheaper and faster and with higher quality and better service via email/a non-tax-payer-subsidized service?)
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    Nov 19 2012: I think that the U.S. Post Office has does a great job of modernizing its work force and adapting to a changing world in which electronic communications have taken over as the primary method for communication. I think that the requirement that they fund Future Retirees Health Benefits for 75 years into the future is ridiculous and designed to destroy the USPS so that these services can be privatized. If there is enough money to make privatization attractive to investors, then there should be enough money to keep the Postal Service solvent. I do not believe that they should stop serving rural areas, although Saturday service could probably be suspended without causeing undo hardship on consumers or businesses. The USPS is one of the great success stories of our country and we should commit to keeping this quasi-governmental agency operating.
  • Nov 19 2012: If they keep cutting back on shifts, routes, and days that they deliver, there won't be many future retirees to provide for! I think that this Act should be reevaluated. Mail is still needed, and while it is not used as much as it was prior to email, it is here now. Providing jobs for people right now, and in the near future should be more of a focus than health benefits for estimated future retirees.
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    Nov 19 2012: Private delivery services do not have access to USPS mailboxes. If they did, you can be sure that they would offer better service at lower prices than the Postal Service.
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      Nov 28 2012: OK, but I think I do not want my mail box made accessible to all.
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    Nov 19 2012: I think the internet is a big competition against traditional ways of mailing and that could be a good thing. People waste less paper, time and resources using emails and websites rather than paper mail and catalogs. The postal service needs to get into a Yahoo type of full service portal of other products beyond paper and boxes if they want to avoid becoming obsolete once the last generation of people avoiding computers are gone. After all, government and universities invented the internet, the right minds together could get something going. One thing I am not interested in though, is paying the FedEx and UPS international freight fees. I am not rich yet. So I hope USPS reinvents itself.
  • Nov 19 2012: In my opinion, I do not think it can be saved unless it goes bankrupt in a similar fashion to General Motors. Promises of pensions will bring the US Postal Service to its knees because it is in a dying industry in the face of e-mail. The company needs to downsize dramatically and be forced to change into a for-profit company. Otherwise, it will continue to lose billions every year with less postage being sent every year the price they charge is to low.
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    Nov 17 2012: I can't wait tell everybody has an email account!!!
  • Nov 17 2012: Reread the U.S. Constitution. As someone implied earlier the founding fathers found a reliable Post Office at affordable prices to be something very necessary
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      Nov 28 2012: Did the founders have 35 pieces of mail a week marked "occupant" in mind?
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    Nov 16 2012: "Independent agency of the US Govt" is an oxymoron. I guess the term loosely means a government operation that is not staffed by elected officials. That definition would include the FBI, CIA, Armed Forces, etc. Getting back to reality, I think it would be a good thing, like Lawren Jones says below, to sell the operation lock, stock, and barrel to a for-profit public company who would very probably find a way to incorporate the essential service, minus the unsolicited, bulk rate junk mail, into their already profitable business (FedEx, UPS).Then Uncle Sam can get back to national defense, interstate commerce and such.
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    Nov 16 2012: Paying for retirement health benefits 75 years into the future is not that stupid when you consider the rising cost of health care caused by political cronyism between Congress and the insurance/pharmaceutical industries. To understand, look at the auto industry with its unfunded pension plans. Had there been no bail out, it would have been disastrous. I don't like bail-outs, but OUR government set up the system and too few object.

    The way to end that is to have limited free health care for all so that congress can negotiate with pharmaceutical companies for the best deal, like the vets have been doing.

    Closing rural postal routes is not just stupid, it's cruel. Look who it will hurt the most. It will hurt Republicans.

    The USPO has been making its own problems. It offers subsidies to mass mailings that fill our mailboxes. It says that the mass mailings are the profit center, and perhaps they are, but they force mail carriers to each have their own mail truck which comes with its own expenses. What if it refused to deliver anything but simple, first class mail, and allow the rest of the crap to go to private companies. I bet they won't deliver a catalog for pennies after that, and the cost of vehicles (purchase, fuel, maintenance, and insurance) will tumble.

    The USPO has become a big-business subsidy.
  • Nov 16 2012: As I understand it, the mission of the Postal Service is to provide service to EVERYONE at a price that ANYONE can pay. Privatizing the Postal Service will not, cannot, fulfill this mission. The only way this full mission can be achieved is by public subsidies. The only real decision is whether we, as a nation, want to continue this mission and are willing to pay for it. If we continue the Postal Service with public subsidies, we will just have to live with some level of inefficiencies that naturally develop due to the lack of competition.

    IMO, if the government is going to subsidize our communications, it makes more sense to build a national wireless network that would provide quality, fast service to EVERYONE EVERYWHERE. This is something that the private providers have not done and have no intention of doing. The spectrum they are using belongs to all of us, and we should have demanded, from the very beginning, that they provide service to all of us, everywhere in the country, including the remote villages of Alaska.