From Yahoo:
"Things the Postal Service Won't Tell You"
. Your failure to send your Mother a proper birthday card is the least of our problems.Publicly, the Postal Service has blamed its financial woes on a waning interest in old-fashioned mail (exacerbated by the financial crisis). And it has cited that reason when it announced staff reductions -- about a quarter of its workforce, or 150,000 postal jobs, will be eliminated by 2016 -- as well as when it talked about closing post offices and when it proposed ending Saturday mail delivery, a measure currently pending in Congress. But some in the postal industry say that declining mail is just an excuse: "There is red ink -- but the overwhelming share has nothing to do with mail volume, the Internet, or other factors related to the mail," says Fredric Rolando, president of the National Association of Letter Carriers. The retiree health payments account for nearly 80 percent, or $9.2 billion, of the first three quarters' losses, and they "not only have exhausted the Postal Service's profits, savings and borrowing authority, they also have distracted the USPS from addressing the structural issues that do indeed exist as society changes," says Rolando, adding that there are "plenty of opportunities" in mail, including e-commerce shipping. "The prefunding of retiree health benefits for future retirees is a major cause of our financial crisis -- but not the only cause," says a USPS spokesman, citing decline in first-class mail as another major cause. While many industry groups, including the Postal Regulatory Commission, have recommended that the health care payments -- the result of a congressional mandate passed in 2006, before the Postal Service's problems started -- be reduced to alleviate the burden, there is one massive roadblock: the federal budget. Because the retiree health prefunding payments are counted in federal funds, they are tied into the nation's budget, which some experts say amounts to the USPS subsidizing government operations. "So the Postal Service has been a kind of cash cow for the federal government for the last 40 years," says Postal Regulatory Commission chairman Ruth Goldway.
2. Our retirees are just fine, thanks.
On Aug. 1, for the first time since the 2006 mandate, the Postal Service did not pay its $5.5 billion annual retiree health benefits bill, and announced that it's likely to default on the next payment too, due Sept. 30. While the announcement raised red flags of concern for the welfare of retiring postal workers, experts, including postal employee unions, contend that the retirees will be fine -- or may even be better off -- if the USPS doesn't pay another cent into the fund for a long time. Indeed, Postal Service inspector general David Williams wrote a letter to the Senate earlier this year recommending just that -- eliminating the annual payments and letting the $44 billion fund grow with interest. Despite the Postal Service's debt, its retiree benefit coffers are beyond full. Its pension funds are more than 100% funded, compared with 42% for all federal pension funds and 80% for the average Fortune 1000 pension plan. That "astonishingly high figure," according to Williams, amounts to a "war chest" of resources that will take care of older workers for decades to come.
3. Anybody want to buy an ailing government agency?
As a federal agency, the Postal Service is something of a platypus: It is bound by law to perform certain functions -- the old postman's motto goes, "Neither snow or rain nor heat nor gloom of night will stay these couriers from their swift completion of their appointed rounds" -- but it also has to report financial results like a business. Some economists say turning the postal service into a corporation with a board of directors and a fiduciary duty to shareholders would allow it to make sound financial decisions based on market conditions, rather than falling prey to political motivations and bureaucratic red tape. Under the current system, "managers are hamstrung," says Richard Geddes, Cornell University professor of policy analysis and management and a visiting scholar at the American Enterprise Institute for Public Policy Research. A USPS spokesman says privatization isn't the answer, adding that it would be hard for even a private company to profit serving rural areas, and that the Postal Service has a business plan to become "financially sound and continue universal service to all Americans."
4. We're hiring our competitors to do our jobs for us.
The Postal Service increasingly relies on outside corporations for everything from sorting mail and transporting it by air and ground to advertising and I.T. consulting: Last year, the agency spent more than $12 billion on such contracts, according to Husch Blackwell, a law firm that represents Postal Service contractors. The USPS even hires some of its competitors to help it do its job, including the United Parcel Service and FedEx, which was the Postal Service's highest-paid supplier in 2011. "The postal service essentially has privatized everything but the last mile of delivery," Goldway says. The number of mail delivery routes served by outsourced carriers increased 84 percent to nearly 10,000 between 1998 and 2012, according to a recent report by the Congressional Research Service. There is now a thriving industry of third-party companies contracting with the USPS, including large publicly traded corporations such as presorting mail firm Pitney Bowes. Postal worker unions generally oppose the practice of contracting, which dates back to the 18th century, saying that outsourcing Postal Service functions is less reliable and takes jobs away from postal employees who are already being laid off in droves. The National Association of Letter Carriers has referred to the practice as a "cancer" that must be stopped before it spreads. Still, contractors deliver mail on just 4.4% of routes, up from 2.3% in 1998, according to an analysis by the Congressional Research Service. The Postal Service, for its part, says it will continue to use contractors, as long as doing so is cost-effective and consistent with their contractual obligations.
5. We're addicted to junk mail.
Like Big Oil and Big Pharma, the Big Mailers -- including banks and catalog publishers as well as presort mail companies -- are a powerful force on Capitol Hill, and the Postal Service courts their business because the vast breadth of envelopes buoys mail volume. Through its workshare discounting program, the Postal Service offers reduced postage rates to companies with large stakes in the mail -- from mass mailers like AT&T and Bank of America to mail-handling specialists like Pitney Bowes -- that presort mail or deliver it part of the way.
^ I knew about them using FedEx and UPS to help them ship. I was told about it when I wanted to send a package next-day and was told they had to charge me a lot more because of the size and the fact that it was going on a UPS plane. Congress and the USPS needs to get their act together and soon. ^
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