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The Postal Service Lost $3.9 Billion Last Year

Despite a $1 billion increase in revenue, unsustainable personnel costs pushed USPS' losses to such great heights.

ZACH FAGENSON/REUTERS/NewscomZACH FAGENSON/REUTERS/NewscomThe U.S. Postal Service (USPS) finished fiscal year 2018 nearly $4 billion in the red—a whopping 44 percent increase in losses from the previous year, despite the fact that the post office saw revenue increase by more than $1 billion at the same time.

In its annual fiscal report, released Wednesday, the USPS attributed more than $2 billion of the deficit to an "ongoing volume loss"—largely the result of fewer people using the government's mail system for sending letters—of 3.6 percent. The rest was the result of increasing payments for pensions and retiree health benefits.

Far from being an aberration, fiscal year 2018, which ended on September 30, is a sign of things to come. Without changes to how it operates, the USPS will continue to post losses at "an accelerating rate," Postmaster General Megan Brennan tells Government Executive.

"Simply put, we cannot generate revenue or cut enough costs to pay our bills," she says.

What's really stunning is that the USPS managed to lose so much money in a year when income from shipping packages jumped by 10 percent and overall revenue increased by 1.5 percent. That wasn't enough to make up for an increase of $896 million in personnel costs.

Source: U.S. Postal ServiceSource: U.S. Postal Service

The post office probably would have gone bankrupt long ago if it were a private entity—FedEx and UPS wouldn't exist today if they were posting annual losses of $4 billion. At the very least, it would be forced to make immediate, significant changes to how it operates. The service staggers onward, piling up ever larger amounts of debt (more than $13 billion at the end of fiscal year 2018), solely because it is a government enterprise.

Instead, the only change the postal service will make is to increase the cost of using it. The cost of a stamp will jump by 5 percent in 2019, the USPS announced Wednesday. Other mailing services will see prices hiked by 2.5 percent. Those changes will generate an estimated $1.7 billion in additional revenue.

Raising rates may make sense, but this year's huge increase in operating losses despite impressive revenue growth should make it clear that the USPS has a spending problem more than a revenue one. That personnel costs are driving the Postal Service's problems is not exactly news— the agency has $100 billion in unfunded pension liabilities and "no clear path to profitability," according to a White House assessment report from earlier this year—but Brennan's comments and the new fiscal data demonstrate that it is becoming a more acute problem.

As Reason has been arguing for literally 50 years, the postal service should be privatized and subjected to competition.

There's a chance that might actually finally happen. A White House report released in June that highlighted the possible privatization of government services included two options for reforming the USPS. One idea would have private managers take over running the USPS with the government maintaining oversight responsibility. The second proposal would have the post office sold in its entirety.

A sale would likely require changes and restructuring to first net a profit, and would probably require the federal government to absorb the current debts. Still, it could net a windfall to help pay off the service's massive liabilities—the Cornell economist Richard Geddes has found that a USPS IPO could raise $40 billion.

Importantly, it would also stop the Postal Service from continuing to post annual losses of billions of dollars. But privatizing the Postal Service would require the divided Congress to agree to take on special interests, including postal workers' unions, who are opposed to any course besides the currently unsustainable one. So don't hold your breath.

Photo Credit: ZACH FAGENSON/REUTERS/Newscom

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  • Rich||

    "Simply put, we cannot generate revenue or cut enough costs to pay our bills,"

    Obviously the solution is to declare free postal service a basic human right.

  • Ben of Houston||

    Some of this is due to incompetence, but other parts are due to policies that are not fiscally responsible, such as no change in postage due to location and daily delivery no matter what.

    To be frank, if we want to keep these policies, we might need to permanently subsidize the Post Office.

  • Presskh||

    Agree. They are either going to have to stop mail deliveries to unprofitable places like remote Alaska or start charge $15 per first class letter to these places, instead of 50 cents. Same for APO addresses of servicemen stationed abroad. Private companies like FedEx and UPS cherry pick only the most profitable parts of the delivery business, leaving the Post Office with the least profitable parts, many required by statute. I'm not a great fan of the Post Office myself, but they don't have a level playing field with private companies.

  • Speaker||

    >They are either going to have to stop mail deliveries to unprofitable places like remote Alaska or start charge $15 per first class letter to these places, instead of 50 cents.

    Another option would be to agree to only deliver to remote areas once a week. If the customer wanted the mail faster than that, they could go to the post office.

  • CE||

    There's a reason people are willing to pay FedEx 15 bucks to send a letter, and it's not cost.

  • Presskh||

    Agree. They are either going to have to stop mail deliveries to unprofitable places like remote Alaska or start charge $15 per first class letter to these places, instead of 50 cents. Same for APO addresses of servicemen stationed abroad. Private companies like FedEx and UPS cherry pick only the most profitable parts of the delivery business, leaving the Post Office with the least profitable parts, many required by statute. I'm not a great fan of the Post Office myself, but they don't have a level playing field with private companies.

  • Presskh||

    Agree. They are either going to have to stop mail deliveries to unprofitable places like remote Alaska or start charge $15 per first class letter to these places, instead of 50 cents. Same for APO addresses of servicemen stationed abroad. Private companies like FedEx and UPS cherry pick only the most profitable parts of the delivery business, leaving the Post Office with the least profitable parts, many required by statute. I'm not a great fan of the Post Office myself, but they don't have a level playing field with private companies.

  • Uncle Jay||

    "Obviously the solutioin is to declare free postal service as a basic right."

    I'm sure Comrade Bernie and Ocasio-Cortez would agree with you.

  • Enemy of the State||

    "Occasional-Cortex"...

  • Longtobefree||

    Latest I saw - -
    She Guevara

  • Earth Skeptic||

    Many times in the past, proposals to close the USPS, or at least the home town post office model, have been rebutted as racist and oppressive, since so many old black and brown people needs to gets their SS checks and occasional money orders at the local PO--or so go the claims.

  • Darr247||

    Have you ever actually perused the Constitution?

  • ||

    The PO should get out of package business,they can't compete with Fed Ex & UPS. Maybe deliver ever other day & cut out 1/2 their employees.

  • Ben of Houston||

    Their package service is the primary money maker. That would be in the wrong direction.

  • vek||

    Exactly. USPS package delivery is comparably fast, and generally cheaper, than UPS or FedEx. Their network is simply so big and massive I imagine they just have economies of scale that their competitors don't. That they STILL turn on a profit on those packages at lower rates means something is working.

    And if you're one of those people who thinks they don't deliver stuff on time, lose stuff constantly, etc... You haven't used the USPS in the last 15-20 years. It USED to be janky like that, but now they're every bit as solid service wise, and lower priced. This is from somebody who ships things almost every day for my business.

  • chemjeff radical individualist||

    Well, based on the absurd volume of political mailers I received this year right before the election, I expect them to lose only slightly less money in this current fiscal year.

  • Don't look at me!||

    To be in the printing business must have been sweet.

  • Marcus Aurelius||

    My thoughts too. I think for 2020, I will set up a shell corporation offering 1/2 price printing to candidates and not actually mailing anything. Mwahaha have

  • albo||

    pushed USPS' losses to such great heights.

    Someone's giddy over a snow day.

  • Spiritus Mundi||

    I'm sure the government will do a much better job running health care.

  • Marcus Aurelius||

    It is known.

  • CE||

    We already know. Check out the VA hospitals.

  • Jerryskids||

    Far from being an aberration, fiscal year 2018, which ended on September 30, is a sign of things to come.

    And not just for the Post Office. The growth in the number of public employees and their pay and pensions is simply a matter of math and you can argue for the repeal of math as some of that white patriarchy oppression all you want but it ain't gonna help. People keep warning about the straw that breaks the camel's back but the camel's been dead for years and buried beneath about 80 trillion tons of straw. Forget talking about how we can fix this, start looking at how you're going to handle the collapse of civilization as we know it.

  • Longtobefree||

    I will handling the collapse of civilization as we know it by stepping outside and screaming "I told you so!".
    I will then welcome the new civilization of whatever the hell it is, and have (perhaps my last) a cup of coffee.

  • gaoxiaen||

    There is a last time for everything.
    Arthur C. Clarke

  • Marcus Aurelius||

    It all started with the first "I'm too pretty to do math" t-shirt wearer winning an election...

  • Earth Skeptic||

    Warren G. Harding?

  • Jalene||

    Convincing Congress to give up their free first class letter mail will not be easy. There is no way that any privatized postal company is going to give politicians free mail, nor should they. I doubt Congress can force any private company to provide free services to federal politicians; any such law would be unconstitutional most likely. So, in a privatized post office, taxpayers will be on the hook for any snail mail correspondence that Congress sends. Moreover, those horrible third class political mailers, the printing of which are usually paid for by taxpayers, are processed and delivered with the same standards as first class mail -- a "perk" that no private company enjoys. Congress is not entitled to free parcel mail, but members still try to send out parcels for free and often succeed. So really, if you want to fix the post office, you need to fix Congress first.

  • Rat on a train||

    They could penaltax a company that refuses the privilege.

  • Jalene||

    They could try.

  • rchive||

    "So, in a privatized post office, taxpayers will be on the hook for any snail mail correspondence that Congress sends."

    Taxpayers are already on the hook...

  • Jalene||

    Everyone seems to believe that the post office is entirely funded by taxpayers. It is not, and hasn't been since 1971. But, you know, try convincing people of that tiny, irksome fact, even when it is clearly written in the financial reports. But if privatization does happen, the hook is going to be massive -- you can thank Congress for that. And then there is 500k people who will likely lose their jobs, none of those people's salaries are taxpayer-funded. I suppose there will be no need for the postal inspection service either. Fed Ex, UPS and DHL, might actually have to deliver their own parcels instead of passing them off to USPS to deliver for them, because they can't deliver to every single residence in America. Personally, I look forward to driving up to 50 miles or so to pick up my mail at a private mail center when businesses work out it the cost/profit ratio of home delivery isn't a good return on investments. But hey! Go privatization! Woohoo!

  • Marcus Aurelius||

    Deliver centers at drying malls and places of business make sense. Once or twice a week delivery for rural areas make sense. Giving out a free printer and maintaining an email address for e-bill delivery makes sense.

    Very little about our current post office makes sense. They brought it on by not thinking critically.

  • Jalene||

    Unless you're disabled, elderly or infirm and cannot get to those centers, not to mention the millions who are unable to drive for various reasons such as DUIs or being too poor to own a car. Some of these people, well the only people they see are their mail carriers ,who deliver all of that horrible unwanted junk mail daily. But fuck those people. Right? Also, hey screw birthday cards arriving on time if delivery is reduced to once or twice a week. Fuck them, too!

  • 0x1000||

    The $4 billion annual birthday card service. Brilliant.

  • ||

    Birthday cards might be late OMGEEEEEE lmfao

  • Jalene||

    OK, fine. It could be your passport, or medication, something perishable, or anything that cannot be sent electronically but is needed by a certain time. None of these things are important though. The only important thing is privatizing the post office, which is already in direct competition with other delivery services. Of course, libertarians bang on and on about the post office's monopoly on first class letters, which we all know is dying a slow horrible death and won't matter in a decade or so, but still... it's the main thing that pisses off libertarians, so throw on your blinders and you can all spend another 50 years moaning about it ad infinitum.

  • C01iN||

    Then those people will just have to do a better job of planning ahead or pay more for faster shipping. What makes you think you get to live miles from anywhere and then demand that society shoulder the increased cost of bringing you service?

  • Kevin Smith||

    Part of the reason for the USPS high deficit is the ridiculously low rates they charge for those last mile services for UPS and FedEx. USPS delivers Amazon prime packages at a loss in most regions. As the use of these services increases the deficit will also increase, and with it the tax burden the USPS poses

  • Jalene||

    Those ridiculously low rates are part of a deal made between USPS, Fed Ex, DHL and UPS to fly the US Mail for the USPS, which does not have its own fleet of aircraft. In return, those private companies reduce their charges to ship the mail on their planes. As for Amazon, they deliver their pre-sorted parcels directly to local post offices / carrier stations so that their parcels do not require machine or hand-sorting by USPS to reduce both Amazon's and USPS's costs. Sounds like win-win to me.... sounds like classic libertarian economics as well. Doesn't it?

  • Kevin Smith||

    Do you not know what "at a loss" means? Amazon still does not pay USPS enough to cover their costs, however reduced they may be

  • ||

    Parasites always fight removal from their host. You're a leech and don't want to pay for what you receive.

  • D-Pizzle||

    "So, in a privatized post office, taxpayers will be on the hook for any snail mail correspondence that Congress sends."

    We always have been. It's not as if Congressional franking brings with it some kind of magic that causes their mailings to be cost-free.

  • Longtobefree||

    "The cost of a stamp will jump by 5 percent in 2019, the USPS announced Wednesday. Other mailing services will see prices hiked by 2.5 percent."

    So why not eliminate the difference between 'first class' and 'other mailing services', and raise both by 10%? Oh, and by the way, replace pensions for new hires with mandatory 401k contributions?
    Oh, wait; the democrats took the house - - - - -

  • Bubba Jones||

    Bulk/Direct Mail is "other mailing services" and would crater if they charged first class rates.

  • Longtobefree||

    Correct.
    Now what;s the downside?

  • Riesen||

    such great heights

    Nicely done

  • lap83||

    Maybe they wouldn't be in such financial dire straits if they came out with another album already

  • Donini||

  • Rich||

    How about a law to the effect that if the intended recipient refuses the letter/package/junk then the sender is charged for postage and, um, handling?

  • General_Tso||

    Sure they're losing money on every transaction, but they're making up for it in volume!

  • Diane Reynolds (Paul.)||

    Wait, more money didn't fix their deficits? Hmm... that throws the narrative way, way off.

  • Longtobefree||

    Yeah, how can the be? Throwing money at unions sure fixed education, didn't it?

  • rchive||

    A common criticism of the "The USPS loses so much money!" argument is that the USPS only loses money because it's required to pre-fund certain things that a private company would not be required to do. Republicans sabotaged it to try to force us to privatize it or something. Thoughts?

  • Bubba Jones||

    From 2012 through 2016, the agency failed to deliver nearly $34 billion toward its pool for retirees' health care.

    http://www.govexec.com/managem.....ef/141404/

    I'm not sure how it's "unfair" to insist that USPS actually fund its retirement obligations.

    More: http://postal.oversight.house......rplus.html

  • Jalene||

    It is unfair if no other company or gov't org is required to do the same. And that is the case here.

  • BillyG||

    It is unfair if no other company or gov't org is required to do the same. And that is the case here.

    Well guess what, the Federal Government is required to do the same. The FERS (fed gov retirement plan) is required to be 100% fully funded, same as is being required of the USPS. It's a fiscally sound requirement.

  • JFree||

    FERS is only one of the retirement plans. The other - bigger one - is CSRS.

    From the linked annual report - The PO has funded CSRS to 87% of accumulated benefit obligations (a $27 billion shortfall). Which is the same % as they've funded FERS. The fed govt has funded CSRS to 27% of accumulated benefit obligations (a $791 billion shortfall).

    Funny that Congress isn't very interested in adding $800 billion in spending to 'fully fund' that.

  • JFree||

    Realistically all this pension stuff has been union/pol cronyism. Negotiate stupid overinflated retirement promises - and then don't fund them because taxpayers will revolt if they see the bill - and milk the cashflow-based accounting system for as long as possible. It's the evil of public-sector unions. Where both sides of the table - unions and pols - are looking to screw the taxpayer

  • Stilgar||

    From page 37 of the pdf linked in the story: The accrued liability is 114B. The fund balance is 90.1B The congress critters want them to have an additional 42.6B per the 2006 law. USPS has already funded to a very high level, certainly more than the vast number of state and corporate plans.

  • Bubba Jones||

  • BillyG||

    The current Federal Gov retirement system (FERS) is required to pre-fund to 100% (same ammount USPS is being require to). Companies and states should also be funding to 100%. If you don't, its a pay me now or pay me *a lot more* later issue. The only reason for not funding to 100% is to inflate current year profits at the expense of the future. So, is it something a private company is required to do? I don't know, but the if the USPS cannot fund its retirement plan I'm betting the tax payer is on the hook for it.

    Its Fiscally responsible to "pre fund". Not doing so hides debt until the payments come due.

  • bernard11||

    is it something a private company is required to do?

    No.

  • MJBinAL||

    ok, you have told this lie a couple of times now and I am tired of it.

    The correct answer is YES.

    And because that correct answer is YES most private companies have changed to 401 based retirement where the company has no obligation at retirement and therefore no obligation to fund. Many still do provide matching contributions and the like, but there is no requirement.

    All private Defined Benefit Retirement Plans (the correct name for them) must be actuarily sound and funded. They must be audited, and are regulated by a government agency. So again, for those remaining private DBRP, YES, private plans must be fully funded based on reasonable, expected rates of investment returns.

  • GoatOnABoat||

    They lost some of my mail too...

  • GoatOnABoat||

    They lost some of my mail too...

  • JFree||

    As Reason has been arguing for literally 50 years, the postal service should be privatized and subjected to competition.

    Oh for fuck's sake. You assholes are the most cronyist jackasses around. This is fucking NOTHING but the usual BS justification to strip assets - and end up continuing to subsidize a newly-private monopoly in those parts of the country where 'competition' will NOT pop up. Like in the 90% of the country that is rural.

    $4 billion is damn near nothing as the cost of maintaining a legal REQUIREMENT under the Constitution. There's prob close to $3 TRILLION in annual spending that is not even constitutionally authorized.

    Far better for the fed govt to leverage the 200,000 post offices as the primary point of contact. Had we eg used that as a distribution system for govt money (also an enumerated responsibility - and one that can compete with the current monopoly we give the Fed/banks), then we wouldn't have had to pay $800 billion in TARP, $4 trillion in Fed 'free money' to Wall St, and/or FDIC liability. A ton of other existing stuff could also be leveraged thru that system far cheaper than the current approach even if we don't get rid of that other stuff cuz it isn't even constitutional.

  • Longtobefree||

    "$4 billion is damn near nothing as the cost of maintaining a legal REQUIREMENT under the Constitution. "

    Actually, it is a defined power (Article one, section 8), but it is not mandated. It is a power defined to the federal legislature, therefore not to the states, but none of the defined powers are mandated.

  • JFree||

    The Congress shall have Power

    Congress has all sorts of way to exercise that power (To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers) but it cannot simply abdicate those enumerated powers once it has taken those powers from the states. Those enumerated powers are essential functions of government - in the case of post office/roads - communication/transportation across state lines and thus outside states legal authority. They are not functions that can exist in a legal vacuum.

    There really is nothing as wormy as 'libertarians' (most all are just R's) who yap about the errors of living constitution stuff as a justification for the 75% of the fed that is way beyond the constitution - while doing NOTHING about eliminating any of that stuff - and while engaging in their own living constitution BS as a justification for abdicating post office and militia and money and war declaration.

    And privatization of those functions is also not constitutional (as well as always being just plain corrupt) because privatization binds future Congresses and diminishes their sovereignty. Over an enumerated power. Not that we give a shit about that either - see Fed Reserve and banks

  • Dan S.||

    The rest was the result of increasing payments for pensions and retiree health benefits.

    As i remember, the USPS is under a unique obligation to fund "retiree health benefits" for people who haven't even been hired yet. This is due to some weird Congressional enactment years ago. Unless that has been repealed, a good chunk of these "losses" are therefore on paper: Congress requires the Postal Service to make payments that no business or other agency has to make, then Congress gives them money to keep operating despite the losses those payments create. Repeal the unique benefit payment requirements the USPS is under, then let's see how it does.

  • Jalene||

    That would be a good start, but sadly it won't be enough. The best way to fix the postal service is to get Congress out of the mix of deciding how much USPS can charge for its products and services. It's not gonna happen, though.

  • Dan S.||

    There is already an "Independent Postal Rate Commission". I don't think Congress directly sets any postal rates.

  • Sevo||

    "As i remember, the USPS is under a unique obligation to fund "retiree health benefits" for people who haven't even been hired yet."

    Fortunately, unlike most other government entities, they are required to keep their benefits 'current' instead of hiding them.
    Would you rather they owe that amount and keep it hidden, like most CA cities and the CA state government?

  • JFree||

    the USPS is under a unique obligation to fund "retiree health benefits" for people who haven't even been hired yet.

    That's just BS. And given how pervasive that notion seems to be among some commenters here, I'm gonna guess it's deliberate union BS.

    The PO is required to fully fund its accumulated benefit obligations. That is the amount it would have to pay current/future retirees if the plan were to end today. They are underfunded (roughly 85% funding of that) - but it's far far better than most other parts of govt. The vast majority of corporate plans are 80-100% funded - with roughly 19% of plans underfunded below the 80% level and 14% of plans overfunded over the 100% level. So it's right in line with the real world.

    The other parts of govt pension plans are a total fraud/scam. The main legacy plan (CSRS) is less than 30% funded. Promises that can't possibly be kept - and any attempt to keep them means the unions/pol have to openly admit they are at war with taxpayers (who also earn far less than the avg fed employee). Those should simply be slashed in half

  • Uncle Jay||

    You don't "lose" $3.9 billion.
    You embezzle $3.9 billion.
    Oh, wait.
    Its the federal government who can't account for the money.
    You just "lose" that kind of money.
    But not to worry.
    All that money is safe and secure in someone's Cayman Island bank account, so no need for any further worrying.

  • zombietimeshare||

    That wasn't the only thing they lost. Add to that a dozen packages that were coming my way. Incompetence, theft, or a little of both are my choice of reasons why.

  • vek||

    They don't lose packages like that anymore dude. 20-30 years ago, sure. It used to be a mess. I send several hundred USPS packages a year, and receive several hundred more... I have maybe a couple a year lost inbound/outbound, out of well over a thousand... And of those, some have been marked as delivered, so may have been stolen.

    If you're not receiving several thousand packages a year, you have a theft problem.

  • jdgalt1||

    I'll bet those numbers would look substantially different if pension payouts were separately stated rather than being lumped into operating costs.

  • JMatt||

    If Carvin' Marvin couldn't do it, it can't be done.

  • Larry M||

    They need to do what the airlines do. Go bankrupt, reorganize, and get rid of all those feather-bedding union contracts. Consider:
    --A drive-up mailbox sits right outside the post office door. Do the clerks inside go out and empty it when sorting begins? No, a mail truck from another station has to collect and deliver it, due to union work rules.

    --Those backlit menu panels over the counter with all the prices and holiday stamp ads? The clerks have to change them seasonally. The fluorescent tubes behind the panel are exposed, blinking, or out. Does the clerk change them? No, only a union electrician can do that. Which gives rise to that great old question, "How many postal clerks does it take to change a light bulb? None, they're not allowed to do it."

    Sigh.

  • ||

    Do you have a source? I think there is little to no truth to your claims.

  • D-Pizzle||

    "Go bankrupt, reorganize, and get rid of all those feather-bedding union contracts. "

    Unlikely. The courts will back up the unions on this issue, just as they have done at the state level with municipal bankruptcies.

  • vek||

    I'm sure there are plenty of dumb things LIKE those... But I know the guys at my local office... They empty the drop off thing out front, and wheel it straight inside. Hate to dash your dreams on that one, but I've seen them do it a hundred times.

  • Echospinner||

    There is plenty of revenue. Privatize it like we have been saying all along.

  • DrZ||

    If the postal service no longer delivers junk mail, who will? It takes a village (taxpayers) to deliver junk mail.

  • Earth Skeptic||

    Does anyone under 50 even care?

  • DrZ||

    "Does anyone under 50 even care?"

    I think you got my message.
    Does anyone care?

    Well, I guess if you live Podunk, WY you might care having someone subsidize all that junk mail. It can get lonely out there.

  • Utilitarian||

    I care because I hate sifting through all the junk mail to find the one piece of mail (usually a medical bill or something from the government) that I actually need. I'm busy enough as it is without the USPS giving me extra homework by mixing my important mail with a bunch of trash I never asked for.

  • Jalene||

    Aw.... first world problems. How sad for you.

  • Utilitarian||

    Not really. It's just annoying, like rush hour traffic.

  • Roger Knights||

    Because the USPS can't cut salaries and benefits down to a reasonable level, it shuttered its advanced and sophisticated sorting centers, causing delivery times to increase. What a pity.

  • Barry Gold||

    Not arguing that the Post Office should not be privatized, but Boehm leaves out an important fact: Congress requires that USPS fund its pension obligation on a schedule that no private business is required to. working. Two of the businesses that I worked for during my career had defined benefit pension plans. Those plans report funding levels of around 80%-85% but -- so far at least -- do not seem to be in danger of not paying the promised benefits.

    If the USPS were allowed to follow the same rules as private businesses, their ongoing expenditures for their pension system would be much less, and they would be in significantly better financial shape.

  • Sevo||

    "Congress requires that USPS fund its pension obligation on a schedule that no private business is required to. working."

    Cite missing.

  • C. S. P. Schofield||

    The Posts Service is one of the few parts of the government that is actually specifically authorized by the Constitution. In general, I would favor returning the price of a single page first class letter to 5 cents, so that any wino who wants to pester his Congressman can do so by returning one returnable bottle. Would such a change make the Post Office run at an even greater deficit? Possibly. I'm far from sure that that should matter.

  • Earth Skeptic||

    ONly slightly OT: how about anyone employed by the federal government, directly or indirectly, loses the right to vote in federal elections?

  • Doug Heffernan||

    And they don't even have catchy cool ads anymore, like they did in 1992:
    https://www.youtube.com/watch?v=FA2VvGLuC2g

  • Earth Skeptic||

    Or a pro cycling team. (Talk about truth in advertising...)

  • ILuvPolitics||

    Great job leaving out THE REASON why its personnel costs are so high... The people in charge of the period of worst governance we've ever had -- Bush and his congressional cronies in the aughts -- forced the Postal Service to pre-pay pension costs decades into the future. They have personnel costs FOR PEOPLE WHO HAVEN'T EVEN BEEN BORN YET on their books -- which was forced by the Bushies -- and that is why their costs are so high.

  • MJBinAL||

    This is bullshit. They were so far behind in paying into pensions it was absurd. They were like 20% funded.

    Their costs are so high because:

    1- They have to deliver to EVERY address, everywhere at the same cost.

    2- They are horribly managed and allocate too little of actual costs to "last mile" delivery. As a result they provide "last mile" service to UPS, FedEx and Amazon for less than it costs to provide it.

    3- They continue to provide benefit perks that private industry does not, like that Defined Benefit Retirement Plan complete with medical coverage that wildly inflates labor costs.

    4- They maintain daily postal PICKUP that means they make millions of stops and run millions of route miles where no mail was delivered.

    These policies beget OTHER decisions making things worse.

    Since the USPS is going to stop at all these boxes anyway, the marginal cost to deliver something is small, so BULK MAIL gets low rates. Of course, those revenues are so low they do not defray the "fixed" (not really fixed, but mandatory) costs associated with running all those routes, so it increases revenue without putting a dent in the operating deficit.

    They continue to charge flat rates for mail delivery without regard to distance. They even charge flat rates for partials without regard to distance. (You will note that UPS and FedEx charge based on how far and how fast.)

  • Jalene||

    Priority mail and Express both use distance, size and weight to determine price. There are flat rate versions of these services that require use of specified postal packaging ("if it fits, it ships"), which is actually a really good deal for consumers. But go on, then, and take a non-postal packaged 10-pound box to the post office and see what it costs to ship it to the other side of the country using Priority or Express. Or... take a relatively light box that is very large and see how that affects pricing on those services. First class parcels do use a flat rate based on weight, but they must be thirteen ounces or under (with weight exceptions made for commercial pricing). Since they are usually small in size, many more of these can fit into a parcel sack for shipping, whereas heavier and larger boxes have to be handled differently.

  • Sevo||

    ILuvPolitics|11.16.18 @ 9:27AM|#
    "Great job leaving out THE REASON why its personnel costs are so high... The people in charge of the period of worst governance we've ever had -- Bush and his congressional cronies in the aughts -- forced the Postal Service to pre-pay pension costs decades into the future."

    Bullshit.
    They are required to keep their pension obligations funded instead of hiding them.
    Brand new handle; union shill, by any chance?

  • ||

    No other government agency or private business is required to do so in the way the USPS does. There's that reason you call bullshit. The only bullshit here is your lies.

  • JFree||

  • Darr247||

    ''As Reason has been arguing for literally 50 years, the postal service should be privatized and subjected to competition.''

    So, why haven't you worked towards altering the Constitution, which *requires* the US Mail service?
    You failed to notice that during the last 50 years?

  • TJJ2000||

    Its doesn't "require" anything - It gives them the power "to establish Post Offices and Post Roads" and since most "Post Roads" are "Public Roads" it is the State that maintains them.

  • JFree||

    This is nonsense. The enumerated powers take those powers away from the states to fulfill that function. The feds can't then simply abandon their obligation to fill that vacuum - no more than they can decide to abandon the defense function and then decide that states can't defend themselves either.

    This is just a typical BS argument by those who have utter contempt for the actual Constitution and who think it lets them do whatever the fuck they are inclined to do.

  • Sevo||

    "The rest was the result of increasing payments for pensions and retiree health benefits.

    Pub sec unions are the scum of the earth.

  • ||

    It wasn't unions that did the pensions and benefits thing. It was Congress, in the form of a Congressman who had attempted to sponsor bills in the past that would have abolished the USPS outright, but had always failed in the past.

  • ||

    Actually, if the USPS were a private organization they'd be making rather large profits. Their enormous losses are almost entirely due to Congressional meddling. Before they were required to do things by Congress that no other public organization and no private organization ever has been required to do, they went from modestly profitable to a money pit.

    Almost any private business in existence, aside from a few Fortune 50 companies, would quickly go bankrupt if Congress passed a law holding them to the same standards as the USPS. If Congress would repeal the laws imposing those requirements on the USPS, it would become profitable again overnight.

  • Utilitarian||

    It seems like the USPS business model is to deliver mostly junk that no one wants for an unsustainably low price. Maybe it should charge more money to deliver those credit card offers I never asked for and immediately thrown in the trash.

  • Jalene||

    Dunno if you'll see this reply. Wrote it yesterday, but my internet connection went out just as I tried to submit it. Sorry it's late.

    In my opinion, blaming the postal service for the junk mail you receive is blame misplaced. USPS is required by law to deliver to the addressee all mail it receives. If you don't want certain types of mail, then blame the companies who are mailing them to you. They wouldn't mail it out if the didn't get a return on their investment. You may have no use for that mail, but others do -- even it's only 1 in 100, the companies decide it's worthwhile. Moreover, these mailings provide jobs for the printers who create the marketing mail, as well as provide jobs for truck drivers and so on to all parties.

    Perhaps America should look into the English model of mail delivery, in which people can opt out of receiving junk mail. That would adversely affect USPS's finances, naturally, which would further libertarian goals of destroying the post office.

  • Joe_C||

    If they charged what they should charge to cover their costs—because otherwise WE are subsidizing the companies that send us unwanted junk mail—the business model they employ would be what it should be—unsustainable. USPS's stupid low prices are what enable it. I don't blame companies that take advantage of prices that shouldn't exist. They aren't setting the prices—USPS and Congress are.

  • TJJ2000||

    This is just ANOTHER way the U.S. Subsidies foreign import trade. That's right; You pay tax money so foreign countries can import their product CHEAPER than using U.S. products. China ships to the U.S. for pennies due to the U.P.U. (Universal Postal Union - part of the United Nations Bern Treaty ). The USPS makes up those loses by increasing local prices and taking taxpayer money.

  • And you believe that why?||

    Well no shit. Any business would post similar types of losses, granted with reasonable adjustments, if they were forced by Congress to fund pensions at the same rate. This is what happens when there are different rules for the geese(private industry) and the gander(of course the government has to be male, despite the disadvantages in this case).

  • Jalene||

    Even if we were spending scads of taxpayers' money on our postal service -- and we aren't -- I would gladly pay that tax to keep it from being privatized. There are only a handful of things I don't mind paying taxes for -- good roads, sanitation, clean drinking water to name a few. The postal service is one of the most useful and fair gov't agencies we have. It delivers mail to all people in America without regard to their race, wealth, gender, sexual preferences, status, class, etc. Everyone is treated equally. It is one reason why the postal service ranks very high among trusted government agencies.

    I also think that if libertarians were serious about privatizing the postal service, then they should rip out their mailboxes, you know, as a matter of principle. But you won't. Reason still sends out its periodicals (paper magazines) through the postal service. Reason don't have to... but they choose to do so. Because it's cheap and can reach everyone who wants a copy.

  • JFree||

    Looks like a whole ton of new-posting union shills in this thread

  • JeremyR||

    It's the pensions. My grandfather was one and it was incredibly sweet

  • Brian Reilly||

    There is no chance of any sort that the USPS will be "privatized". There is no chance that Congressional service/delivery requirements will change to make the USPS competitive or sustainable. There is no chance that the postal workers union (s) will allow or cooperate with any effort to reform that uses any less people or features lower wages, or higher mandated productivity. There is no chance that the pension shortfall will be dealt with in an organized and plan sustainable manner.

    The USPS, like the rest of the US government and most of the subdivisions thereof will stagger along until it fails completely. Then a new scam will begin. And so it goes.

  • Joe_C||

    They can make it $1 per stamp for all I care. Then maybe the junk mail would stop. Living in Florida during the election, I would've been happy to not have to deal with pounds and pounds of junk mail trying to sway votes I had already made up.

  • pjmel||

    When it comes to shipping the mail the post office is very inefficient. If you are long haul driver for the post office, they will have you drive cross country regardless if you're truck is full or empty because they are dedicate runs and don't forget your return trip can be full or empty to.

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