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Robert Winner

TEDCRED 100+

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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: 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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