US Postal Service Posts $3.5 BILLION Loss in 3rd Quarter

AND YOU WOULD WANT THE US GOVERNMENT TO MANAGE YOUR HEALTH CARE?!?!?
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A recent article in Reuters reports the miserable state of the United States Postal Service's miserable financial condition, that the entity that delivers more than half the world's mail has reported net losses in 14 of the last 16 quarters. The agency's Financial Officer, Joseph Corbett, stated, "Given current trends, we will not be able to pay all 2011 obligations." Among some of the USPS challenges, a $.5 billion payment due September 30th to pay retiree health benefits.

Reuters' Source Article: http://www.reuters.com/article/idUSN0517225620100805

There's no question the challenges to the Postal Service are immense but the nature of their business inherently makes pursuing other options more attractive all the time. With the rise of email and electronic bill payment, the volume of conventional mail has deceased tremendously over the last two decades. Furthermore, UPS and FEDEX continue to upgrade service providing much more attractive parcel shipping over the US Mail. Being a government agency whose employees work under very favorable union conditions where their job performance and efforts to upgrade their productivity and professionalism is under constant attack from union obstruction, doing business with the post office can be a most frustrating customer experience. Thankfully, residential delivery, the aspect of postal service most citizens encounter on an almost daily basis continues to be considered very good in most regions of the country.


As postal customers have become accustomed to on an ever increasing basis in recent decades, a postage rate increase is just around the corner and the prospects of a fifty cent stamp looms closer and closer with each move upward. It's hard for younger Americans to imagine that for most of the first half of the 20th century, mailing a letter held at only three cents until 1958 when it was elevated to four cents and then five cents in 1963. By 1974, postage rates hit the double digits at tens cents a letter. In 1988, stamps went up to twenty five cents standing at thirty three cents at the turn of the millennium. The January 2, 2011 cost increase to $ 0.46, will mark the seventh increase since 2000.


Energy and manpower costs are at the heart of the rapid upturn in postal costs. Not only is the service inefficient with dreadful management policies, the cost in permanent benefits including generous pensions and life-long health care create insurmountable fixed costs while management has little authority to downsize and streamline operations and alter job descriptions.


The postal service serves as the perfect model how the government is incapable of providing cost effective, professional service and respond to economic and market forces proactively the way private sector operations can.


For those who aren't concerned about the extent to which the Federal Government has taken over more and more private sector operations, let the financial operation of the United States Postal Service service as exhibit A.


To illustrate the rapid upward movement of postal rates, see the following:
http://www.akdart.com/postrate.html