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The Tentacle


September 12, 2011

Fixing the Postal System

Michael Kurtianyk

Many of us are planners. We schedule, we organize, and we run our businesses with all the decisiveness of a CEO. We do what we can to keep our business, not only afloat, but profitable. In economically tough times, good businesses must consistently look to raise revenue and lower expenses.

 

Then, there is the United States Post Office.

 

According to Postmaster General Patrick R. Donahoe, the post office system is so low on cash that it will not be able to make a $5.5 billion payment on its pension obligation due September 30. It may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

 

Think about this for a moment: shutting down the postal service this winter? Certainly not before our holiday cards and gifts are sent and received! How could this be? How on God’s green earth could this possibly happen?

 

The United States Postal Service is a self-funded government agency. Its revenue comes from selling stamps and other services to pay for the cost of mail delivery to our homes (about 150 million) and businesses six days a week. The problem is that with technology like the Internet, electronic bill-paying options, and email, the volume has been declining. How much? Estimates are that the Postal Service will handle an estimated 167 billion pieces of mail this fiscal year, down 22 percent from five years ago.

 

Furthermore, unbeknownst to many Americans, Congress mandated, in 2006, that the postal service prefund its retiree health benefits for the next 75 years – and to do so over the next decade. That means the USPS must make about $5.5 billion in annual payments to its retiree health care fund every year. This must be addressed first and foremost: how best to do it is the question.

 

Some congressmen suggest that the USPS must take the postal workers out of the federal health insurance plan. This way, the agency can create its own coverage options, and offer new workers a defined contribution retirement plan, instead of the current federal pension option. Congressmen say the union contract, which includes no-layoff clauses, is increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx. Postal workers also receive more generous health benefits than most other federal employees.

 

Postmaster General Donahoe has also called on Congress to give the USPS the authority to cut mail delivery frequency, to cut 220,000 jobs (from its current workforce of 653,000), and to close 3,700 offices around the country. Donahoe has also suggested reducing the number of sorting facilities throughout the country from 500 to 200. Donahoe’s critics say these closings would only save a small amount of money. Eliminating Saturday mail delivery, for example, would save only three to four percent of the USPS costs, while reducing service by 17 percent.

 

These might be good ways to lower expenses, but how about raising revenue? It seems that this is a tougher nut to crack. The USPS is considering ideas like delivering wine and beer, allowing commercial advertisements on postal trucks and in post offices, doing more “last-mile” deliveries for FedEx and UPS, and offering special hand-delivery services for correspondence and transactions for which e-mail is not considered secure enough.

 

Here is an opportunity for out-of-the-box thinking. It’s possible that we could change post offices from stand-alone buildings to kiosks within Wal-Marts and Wegmans. People go there anyway, so why not?

 

We could also keep the post offices, but have no delivery: each of us would have a post office box. There would then be no need for mail trucks, drivers, maintenance costs, etc. This would eliminate the need for mailboxes at our residences.

 

The mail could be delivered on Tuesdays and Thursdays only, or Mondays, Wednesdays, and Fridays. Do we really need to get the mail every day?

 

Why should the USPS spend money on advertising anyway? Don’t people know that they exist? Where is the money to sponsor a cycling team? Shouldn’t cutbacks be made here also?

 

Maybe each person in America should write a love letter to someone.

 

I leave you with this from Conan O’Brien: “According to a report, the Post Office could go out of business this winter. On the bright side, the Post Office won’t receive the report in the mail for another two years.”

 

Michael.kurtianyk@gmail.com

 



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