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Postal Service on path to be broke by October

Just do a search for postal service rate increase rejected. It happened like a year ago.

here is the article that came right up when I did as you suggested

Postal Rate Hikes Rejected By PRC

By Mark Hrywna

The Postal Regulatory Commission (PRC) has rejected the United States Postal Service’s (USPS) request for an average 5.6-percent rate hike next year. It’s the first time PRC ruled on an exigent rate case under the Postal Accountability and Enhancement Act of 2006 (PAEA) and the decision by the five-member panel was unanimous.

While conceding that postal volume and revenue have declined dramatically in recent years, the PRC said the Postal Service’s cash flow problem “would have occurred whether the recession took place or not,” and the exigent rate case adjustments “represent an attempt to address long-term structural problems not caused by the recent recession,” PRC Chairman Ruth Goldway said in a statement.

“The commission finds that the Postal Service has shown the recent recession to be an exigent circumstance but it has failed both to quantify the impact of the recession on its finances and to who how its rate request relates to the resulting loss of mail volume,” Goldway said. The PRC’s analysis indicates that as the recession fades, mail volume appears to be rebounding.

“This is the biggest victory for mailers…in a long, long time. I can’t remember anything bigger than this,” said Tony Conway, executive director of the Washington, D.C.-based Association of Nonprofit Mailers, and a spokesman for the Affordable Mail Alliance. “It’s a hard-fought victory. I never expected it to be honest when we started but we’ve come a long way in a short period of time,” he said.

The Affordable Mail Alliance, a coalition of more than 1,200 nonprofits, trade associations, consumer groups and businesses large and small, was formed after the USPS filed its rate case in July. The alliance said the decision will benefit the Postal Service in the long run and is good for businesses. “The PRC today has helped countless businesses stay competitive and saved tens of thousands of jobs,” said Conway.

In response to dwindling mail volume and annual budget shortfalls in the billions of dollars, USPS reduced costs by more than $6 billion last year. The Postal Service, which ended its third quarter in June with a net loss of $3.5 billion compared with $2.4 billion the same quarter in 2009, argued in its filing that the primary cause of its liquidity crisis was “structural and related to an overly ambitious requirement to prefund its future retiree health benefit premiums.”

Analysis by the PRC, however, confirmed that the cash flow problem instead was a result of “other, unrelated structural problems and the rate adjustments would neither solve nor delay those problems.” Even with the requested increase, the Postal Service would be unable to meet its annual obligation of roughly $5.5 billion in 2011 and succeeding years of a 10-year payment schedule. “It has been unable to fund this obligation from operations, and has instead used up all of its retained earnings and drawn down from its $15-billion borrowing authority,” the PRC said.

In a statement released hours after the PRC’s decision, Postmaster General John Potter expressed disappointment in the decision but was encouraged by the “acknowledgement and understanding of the larger financial risk we face through the mandated prefunding of retiree health benefits.”

The USPS now must decide whether to appeal the decision to the courts, whether to re-file another exigent rate hike request, or file a regulate rate increase that falls within the CPI, which has been creeping up toward 2 percent this year. The Postal Service will review the ruling to “make an informed decision about what options we have and what may be the best course for our customers, our employees, our stakeholders and the American public,” Potter said.

“Clearly, the Postal Service is a viable business,” he said. “Maintaining that status requires elimination of several legislatively-imposed constraints that hamper our ability to operate efficiently and profitably,” said, outlining six specific things USPS should be allowed to do (and which legislation in Congress has been introduced to address):

•Alter frequency of delivery consistent with the use of mail
•Close unprofitable post offices
•Restructure obligation to prefund retiree health benefits
•Create and offer products and services beyond mail
•Assure that arbitrators consider the financial health of the USPS when agreement can’t be reached with labor unions
•Resolve overfunding of pension systems.
Goldway said commissioners were aware since USPS announced its intention to file the case in March that the process was unprecedented and whatever decision made would be controversial. The Postal Service filed the case in July and the PRC expedited a 90-day review process.

PAEA allowed USPS to request rate increases above the rate of inflation, which last year was less then 1 percent, if it can show it is “due to extraordinary or exceptional circumstances; it’s reasonable, equitable and necessary under best practices of honest, efficient and economical management; and, it’s necessary to maintain and continue of postal services of the kind and quality adapted to the needs of the United States.”

So there is material in there to support your contention that increased revenue all by itself will not solve their problem.
 
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No private company could deliver a letter to every address in the country for 50 cents. In order for Americans to have that luxury the postal service has to be subsidized. It was never meant to be a for profit company. How much profit does our military generate? NASA?

Are you sure? We'll never know, will we?

If an entity (public or private) got 50 cents for every piece of crap it puts in our mailboxes, they'd make a fortune. UPS already has suburban routes. If they could, I'm pretty sure they'd be in the business.
 
Sometimes it's an apartment community, where you have 300 mailboxes within 10 feet of each other.

The post office would make a fortune in your world.
 
Are you sure? We'll never know, will we?

If an entity (public or private) got 50 cents for every piece of crap it puts in our mailboxes, they'd make a fortune. UPS already has suburban routes. If they could, I'm pretty sure they'd be in the business.

UPS charges a lot more than USPS. Putting the crap in the mailbox is a small part of it. The UPS here drops their small packages off at the post office and lets the mailmen deliver them. I wonder why?

Do you think UPS could make money delivering a letter from New York to LA charging 50 cents? Private companies eliminate routes and services that aren't profiable. They set their rates to create a profit. The USPS makes money on packages but loses it on letters.
Privatizing the post office could be a national disaster that the government might have to bailout.
DHL stopped delivering in this country because they couldn't make money.
 
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UPS charges a lot more than USPS. Putting the crap in the mailbox is a small part of it. The UPS here drops their small packages off at the post office and lets the mailmen deliver them. I wonder why?

Do you think UPS could make money delivering a letter from New York to LA charging 50 cents? Private companies eliminate routes and services that aren't profiable. They set their rates to create a profit. The USPS makes money on packages but loses it on letters.

Again, we'll never know. The USPS is a monopoly. If what you're saying is true, why is it protected from competition?

Further, if the USPS makes money on pakges but loses it on letter, why in the hell aren't they charging more for letters?? And junk mail that probably mails for 7-cents or less apiece.
 
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Again, we'll never know. The USPS is a monopoly. If what you're saying is true, why is it protected from competition?

Further, if the USPS makes money on pakges but loses it on letter, why in the hell aren't they charging more for letters?? And junk mail that probably mails for 7-cents or less apiece.

Because postal service is a basic service that all Americans need cheap access to.
 
Again, we'll never know. The USPS is a monopoly. If what you're saying is true, why is it protected from competition?

Further, if the USPS makes money on pakges but loses it on letter, why in the hell aren't they charging more for letters?? And junk mail that probably mails for 7-cents or less apiece.

Shipping Sidekick - Compare Shipping Rates! Save on UPS shipping rates. Save on FedEx shipping rates. Save on USPS shipping rates.

UPS charges $9.40 to deliver a 1 ounce letter from New york to LA.
Rates for junk mail should be raised for sure. Business are taking advantage of the cheap rates.
 
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The post office charges $18.30. And it absolutely positively doesn't have to be there overnight. Postage Price Calculator

No it charges the price of a stamp. We are talking a 1 ounce letter. And not express. A single postage stamp will mail a 1.1 ounce letter anywhere. UPS charges $9.40 to send 1 ounce letter from New York to LA.
 
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No it charges the price of a stamp. We are talking a 1 ounce letter. And not express. A single postage stamp will mail a 1.1 ounce letter anywhere. UPS charges $9.40 to send 1 ounce letter from New York to LA.

Without the government monopoly on mailing letters, private competition will be able to get into that market and provide a reasonable alternative. A stamp is 41 cents. That might not be feasible in the free market; in fact based on the post office's performance we know that it isn't a viable price. But a dollar might be, if a company was geared towards that kind of service. As it stands, the government, not subject to market forces, is filling that niche and effectively forcing private entrepreneurs in the shipping industry to focus on package delivery as opposed to standard mail.

The free market is sort of the like the reverse field of dreams. If you come to the free market, they will build what you need.
 
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So we should get rid of the USPS so that we can pay more for sending mail?
 
No it charges the price of a stamp. We are talking a 1 ounce letter. And not express. A single postage stamp will mail a 1.1 ounce letter anywhere. UPS charges $9.40 to send 1 ounce letter from New York to LA.

Yep, and it's a money losing proposition for every piece of mail they handle....especially first class. Compare apples to apples, USA. Overnight v Overnight Maybe.
 
Yep, and it's a money losing proposition for every piece of mail they handle....especially first class. Compare apples to apples, USA. Overnight v Overnight Maybe.

UPS isn't overnight either. UPS standard delivery for a 1 ounce letter from NY to LA is 9 bucks. 50 cents for USPS. Same letter.
It is losing money but if America needs and wants the service, we must pay for it. Either through taxes or higher rates.
 
The post office was pretty decently run iirc, it was actually profitable until a few years ago. I don't mind phasing it out in the modern era, but whatever replaces it needs to insure access to all Americans as public infrastructure. E-mail doesn't cut it alone, as it can't deliver small items like credits cards, not is it available to 100% of people.

true, and I agree, but think of all the smaller "courier" type businesses that would start popping up.. heck, it could single handedly be responsible for a total recovery of the US economy.. :)


Tim-
 
UPS isn't overnight either. UPS standard delivery for a 1 ounce letter from NY to LA is 9 bucks. 50 cents for USPS. Same letter.
It is losing money but if America needs and wants the service, we must pay for it. Either through taxes or higher rates.

What everyone keeps forgetting about is VOLUME. USPS can charge 50 cents because it deals with massive volume of those tiny letters and envelopes. UPS does not. If there was no USPS and UPS and FEDEX were the only options, the volume would go through the roof thus the cost to deliver each one would go down. If you deliver 1 million letters and your competition delivers 100 million, of course you have to charge more per letter to make ends meet. Not to mention UPS is for profit, USPS isn't. So you're really comparing apples to hamburgers in the first place.
 
What everyone keeps forgetting about is VOLUME. USPS can charge 50 cents because it deals with massive volume of those tiny letters and envelopes. UPS does not. If there was no USPS and UPS and FEDEX were the only options, the volume would go through the roof thus the cost to deliver each one would go down. If you deliver 1 million letters and your competition delivers 100 million, of course you have to charge more per letter to make ends meet. Not to mention UPS is for profit, USPS isn't. So you're really comparing apples to hamburgers in the first place.

And UPS and FEDEX would have to deliver them to every address 5 days a a week. Volume will go up and so will their workforce and costs. I do not believe any private business could deliver letters everywhere for 50 cents apiece.
DHL lost money and folded in this country and they could charge what they wanted. UPS and FEDEX are profitable because they only handle the profitable part of the industry and charge rates dependent on distances..
 
And UPS and FEDEX would have to deliver them to every address 5 days a a week. Volume will go up and so will their workforce and costs. I do not believe any private business could deliver letters everywhere for 50 cents apiece.
DHL lost money and folded in this country and they could charge what they wanted. UPS and FEDEX are profitable because they only handle the profitable part of the industry and charge rates dependent on distances..

If the government is not willing to charge consumers what it actually costs and is losing billions!! of dollars, they need to step aside and leave it to private enterprise. Why should I subsidize your birthday card to Auntie Em? Otherwise it's absolutely no different than any other boondoggle its operating now. Private enterprise would beat the post office hands down. 'Course they wouldn't be delivering junk **** to everybody for 6 cents apiece either.

Who says we need mail delivery every day? Wanna' know? The postal union. I could care less if I get Saturday mail delivery. In fact, I could care less if I got mail delivery three times a week. What's so magic about every day??

Thousands of APWU members, led by union president William Burrus and the Rev. Jesse Jackson, marched through the streets of downtown Detroit on Tuesday afternoon to Save Saturday Service and rally for good jobs.

Wearing blue APWU T-shirts and chanting “Five Day – No Way!” delegates shut down busy streets and assembled in Campus Martius Park to alert the public to the need to stop USPS plans to abolish Saturday mail delivery.

Postal Union Delegates Take to the Streets: Save Saturday Service! - postalnews blog
 
If the government is not willing to charge consumers what it actually costs and is losing billions!! of dollars, they need to step aside and leave it to private enterprise. Why should I subsidize your birthday card to Auntie Em? Otherwise it's absolutely no different than any other boondoggle its operating now. Private enterprise would beat the post office hands down. 'Course they wouldn't be delivering junk **** to everybody for 6 cents apiece either.

Who says we need mail delivery every day? Wanna' know? The postal union. I could care less if I get Saturday mail delivery. In fact, I could care less if I got mail delivery three times a week. What's so magic about every day??



Postal Union Delegates Take to the Streets: Save Saturday Service! - postalnews blog

I don't disagree. I rarely use the post office. We as a nation have to decide if we need the postal service or not. Private enterprise could not do what the post office does at the price and still make a profit. Would you rather let your tax dollars subsidize it or would you be willing to pay 5 bucks to send a letter to Aunt Bertha in Arizona? What happens if the private postal service goes belly up? Government bailouts?
The postal service was never intended to be a for profit organization. It is a government provided service and throughout history has been instrumental in creating this nations prosperity. Third world countries without dependable postal service can will never reach our level of prosperity.
 
Jesus people have no idea what they're talking about. Inefficient government, eh?
For decades the postal service has offered a service where they take a letter, put it on a plane, fly it across the country and then deliver it by hand for less than a dollar, and they've been self-sufficient doing it. What's FedEx's price for doing the same, hmm?

It wasn't until very recently that they started to run in the red. A combination of economic downturn and the fact that nobody is sending letters anymore means their revenue is dropping. They'll need some restructuring.

Find me one private entity that has been able to do what the USPS does, on that scale, more efficiently.

If it is self-sufficient why don't we just privatize it anyways? There is virtually no reason why the government needs to deliver mail. Let supply and demand determine the cost of a postage stamp.
 
I don't disagree. I rarely use the post office. We as a nation have to decide if we need the postal service or not. Private enterprise could not do what the post office does at the price and still make a profit. Would you rather let your tax dollars subsidize it or would you be willing to pay 5 bucks to send a letter to Aunt Bertha in Arizona? What happens if the private postal service goes belly up? Government bailouts?

No. Let's suppose that, for whatever reason, it still wasn't profitable for FedEx and UPS to deliver individual letters, even after the post office stopped competing with them. As I see it, one of two things (or a combination of them) will happen: They will raise their rates enough to cover their costs, or people will simply adapt to it and find alternatives to mailing letters. I don't see why that's such a bad thing.

USA_1 said:
The postal service was never intended to be a for profit organization. It is a government provided service

But unlike many non-profit services that the government provides, this is an area where the private sector can and does compete. And it's a sector where society as a whole doesn't really benefit in any particular way from having a public postal system. The benefits accrue entirely to the individuals who make the most use of the postal system, rather than to the public as a whole.

USA_1 said:
and throughout history has been instrumental in creating this nations prosperity. Third world countries without dependable postal service can will never reach our level of prosperity.

At one time, that may (arguably) have been true. But no longer. Who are the main users of the mail system, in this day and age? I think there are four major ones: 1) Catalogs, i.e. junk mail, that most people don't want anyway and are easily available online; 2) Magazines, which are in the process of migrating to tablets and could easily charge slightly higher subscription rates to cover their increased postage costs under a private postal system; 3) Bills and bank statements, which are increasingly being done online and could easily change from opt-out to opt-in systems if you wanted a paper copy; and 4) Netflix, which mails out huge numbers of DVDs but is quickly migrating to online video content as well.

As I see it, the internet has revolutionized the entire mail industry. If the USPS is losing money, we can do without it. Our economy has a remarkable ability to adapt to changes.
 
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No. Let's suppose that, for whatever reason, it still wasn't profitable for FedEx and UPS to deliver individual letters, even after the post office stopped competing with them. As I see it, one of two things (or a combination of them) will happen: They will raise their rates enough to cover their costs, or people will simply adapt to it and find alternatives to mailing letters. I don't see why that's such a bad thing.



But unlike many non-profit services that the government provides, this is an area where the private sector can and does compete. And it's a sector where society as a whole doesn't really benefit in any particular way from having a public postal system. The benefits accrue entirely to the individuals who make the most use of the postal system, rather than to the public as a whole.



At one time, that may (arguably) have been true. But no longer. Who are the main users of the mail system, in this day and age? I think there are four major ones: 1) Catalogs, i.e. junk mail, that most people don't want anyway and are easily available online; 2) Magazines, which are in the process of migrating to tablets and could easily charge slightly higher subscription rates to cover their increased postage costs under a private postal system; 3) Bills and bank statements, which are increasingly being done online and could easily change from opt-out to opt-in systems if you wanted a paper copy; and 4) Netflix, which mails out huge numbers of DVDs but is quickly migrating to online video content as well.

As I see it, the internet has revolutionized the entire mail industry. If the USPS is losing money, we can do without it. Our economy has a remarkable ability to adapt to changes.

Like I said before I don't use the postal service much and could do without it. I just think privatizing it would be the end of daily delivery of letters at affordable rates.
 
good, that which does not kill you makes you stronger

A cliche proved wrong by a classic episope of the Simpons

A stroke will not make you stronger, a serious heart attack will not make you stronger

A beating so serious it cause a person brain damage will not make that person stronger
 
Yeah, we get all of our bills and medical statements, etc., by mail. Still gotta have it, even if the price goes up. :(

Still, I love Tucker's idea. My husby gets so appoplectic over the sheer volume of junk in our mailbox. He bought a custom stamp that says, "Refused. Return to Sender." in bright red ink. He stacks up the junk on the kitchen table, gets this crazed look in his eyes, and wails madly away, cackling maniacally, then dashes back to dump them in the outgoing mail slot. *sigh* I know, I know. But it's the only orgasm the old guy gets any more, so what the hell.

Damn, that's me when I'm old.

I'm not proud, but there it is.
 
Here's the way I see it:

1) It costs 43 cents to mail a letter.

2) It costs nothing to email a letter.

3) I got my Christmas card from my brother in January.

4) Had he sent it by Fedex, I would have gotten it by Christmas.

5) Spam, spam, spam spam.

6) You get it every day in your mailbox. I am on the opt-out list, and I still get some.

7) I get it in my email too, which is filtered out and deleted directly from the server so that I rarely see any.

8) The US Postal service will be obsolete very soon, if it isn't already obsolete.

9) I prefer an automobile to a horse and buggy.

10) Finally back to junk mail - Think of all the trees that will be saved if the US Postal service dies.

To, sum it all up, I maintain that, in the interests of plain common sense, let the US Postal Service go broke, and let them go under. If they can't compete, then let the natural order of things, known as the free market, do what it does. We won't be any worse off. In fact, we are probably better off.
 
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