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(USA Today)   USPS defaults on another $5.6 billion payment but assures customers it'll be business as usual   (usatoday.com ) divider line
    More: Fail, U.S. Postal Service, postal services, payments  
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809 clicks; posted to Business » on 02 Oct 2012 at 8:26 AM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-10-04 11:33:17 AM  

Lt_Ryan: Slaves2Darkness: Because no other business or government entity has ever been forced to pre-fund retirement benefits 100% in such a short time. The USPS was not allowed to raise rates, cut service, or hell even close a lot of facilities with out congressional approval, which they are not giving, but are being forced to make these payments.

Forced does not mean that companies don't prefund, about a 1/4 companies prefund that expense. An employee is promised health care after they retire, an organization estimates what that will cost. You can either actually fund what you have promised or not show anything until that person retires. Now most of us would consider an IOU to be a debt and that should be accounted for but common sense doesn't always make it into law. The USPS has over half a million employees most of which will retire and will be provided with health care, the USPS was not accounting for the cost that they owed to current employees and would only fund when someone actually left. This is sustainable in a growing environment, but with declining mail volume in the future the USPS would have even a harder time funding the health care cost.
Even today they are going to post a $15 billion loss of which only $11 billion is the healthcare issue. What will happen in 10 years when the USPS has even less volume and revenue and the health care fund is empty too. Then either the USPS workers can go without benefits or the tax payer will pick up the bill.

Sorry but I'd prefer the USPS to fund it's own employees, or make the necessary cuts needed to become sustainable. I'd also prefer the USPS not to sell my name and address to advertisers so I can get even more junk mail, which btw is one of the strategies they have to become sustainable.

We don't live in the 1800 or 1900s. Postal mail is not what is was in the past, newer forms of media have taken over. Newspapers that were as vital to the country and predate the mail system have undergone massive changes in the ...


What part of "LAST MILE" do you not understand? UPS/Fedex often use USPS for remote, rural delivery. Also, UPS and FEDEX CANNOT COMPETE for the sheer volume of mail that is still going through USPS, at the price level that USPS is offering.

You want the USPS to fail? FINE! Get ready to pay three to four times more when you need a letter or something else mailed.

Having a functional postal system is part of living in a First World country.

And as many of the posters have already pointed out, it was the artificial restriction of forcing the USPS to prefund retiree that's causing this mess.
 
2012-10-04 04:09:08 PM  

Artcurus: What part of "LAST MILE" do you not understand? UPS/Fedex often use USPS for remote, rural delivery. Also, UPS and FEDEX CANNOT COMPETE for the sheer volume of mail that is still going through USPS, at the price level that USPS is offering.

You want the USPS to fail? FINE! Get ready to pay three to four times more when you need a letter or something else mailed.

Having a functional postal system is part of living in a First World country.

And as many of the posters have already pointed out, it was the artificial restriction of forcing the USPS to prefund retiree that's causing this mess.


I thought this thread dead but since you asked. I never addressed UPS or FedEx and they have nothing to do with the situation the USPS is in, they may be in a similar business but they differ significantly. I fully understand the concept of Last Mile, however UPS and FedEx are both innovative and adaptive. There was a market in the US for lower cost shipping alternatives, both UPS and FedEx saw that market and began offering services to expand into that market. They did that by handing off items to the USPS, not because they don't or can't drive to a remote area but because their customer wanted a cheaper alternative. Example...If you pay FedEx $50 they will get a box somewhere in 1 day, pay them $40 and it's 2 days, pay them $25 and it's 4 days, pay them $15 and FedEx will hand it off to the USPS and it will get there in 5 days.

UPS and FedEx have no interest in delivering mail, the margin is far too low. There money is better spent expanding into other places where the margins are higher and they can get a better return on their investments. UPS is in the process of buying TNT in Europe, but only after TNT split their company in half one for mail and the other for parcel/freight, UPS is buying the parcel/freight half. Both would like to have the USPS survive, not only so they can keep the low cost option but also because the USPS pays both to move there mail between cities (Priority mail flys on FedEx and UPS jets).

I said that the USPS needs to adapt and make the changes to become sustainable. The USPS does serve a vital function and it needs to survive.

I can go to any one of thousands of forums on the web with a lot of posters saying a lot of things that doesn't mean it is true. The USPS will lose close to $15 billion this year, $11 billion is the pre-fund there is still another $4 billion loss. Sure that could have been covered with prior years profits but the trend year after year is a decline in revenue and larger losses.
 
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