The Post Office’s Biggest Problem Isn’t Saturday Delivery — It’s Congress

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Justin Sullivan / Getty Images

A proposal to partially privatize the post office would still keep mail carriers on their routes.

It may seem like the United States Postal Service is unwilling to adapt to a world of declining mail volume and increased digital communication. But the real obstacle in the way of true reform aren’t the folks running the postal service itself. It’s their bosses in the U.S. Congress.

Postmaster General Patrick Donahoe is like a man waiting for a package that never arrives. Donahoe, who has led the U.S.P.S. since 2010, has over the past few years made numerous proposals to get the money-losing postal service back in the black. He’s suggested closing post offices, modernizing post offices, “village” post offices, increased postal rates, decreased services, a reduced workforce, and a number of digital approaches involving tracking packages, QR codes, and mobile solutions.

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But there’s only so much the Post Office can do on its own to reduce the billions it loses every year. (Last year it lost $16 billion.) Congress holds all the cards, and that became increasingly clear this week. If the U.S.P.S. is ever going to break even, Congress will need to pass some comprehensive reform legislation.

In February, Donahoe announced that the postal service would eliminate Saturday delivery, essentially challenging Congress to specifically require 6-day delivery. But last month, Congress passed a continuing resolution prohibiting 5-day delivery. Afterwards, a Government Accountability Office report stated that current law required the post office to deliver six days a week, and the U.S.P.S. board of governors decided Wednesday to “delay implementation of its new delivery schedule until legislation is passed that provides the Postal Service with the authority to implement a financially appropriate and responsible delivery schedule.”

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This isn’t the first time Congress has stymied the Post Office’s plans to reform, either through action or inaction, and it likely won’t be the last. Below are three other ways Congress has halted postal reform.

  1. Congressional inaction: Pre-retiree health care. The costliest problem for the U.S.P.S. is the Congressional mandate that it pre-fund healthcare for future retirees to the tune of around $5.5 billion annually. Of the $15.9 billion the postal service lost last year, $11.1 billion was caused by two defaulted payments to the health benefits fund. (Most of the remaining $5 billion was due to lost revenue from lower mail volume.) The House hasn’t taken any action on healthcare funding, while the Senate passed a bill last spring that would allow the post office to reduce its workforce from 550,000 to 450,000 and recoup a projected $11 billion surplus from a separate federal pension fund.
  2. Congressional disapproval: Closing post offices. Postmaster General Donahoe sought to close around 4,000 post offices to reduce costs, but after objections from a number of House members from rural districts, the Senate passed legislation forbidding the closure of any post office that’s more than 10 miles from another branch. Soon after, Donahoe announced that the post offices on the chopping block would remain open but with shorter hours and reduced services.
  3. Congressional inaction: Shipping beer and wine. One way the post office is hoping to recoup some of its lost revenue is through the shipment of alcohol. The post office is legally barred from shipping “all spirituous, vinous, malted, fermented or other intoxicating liquors of any kind” thanks to a 1909 temperance law, according to the post office’s legal department. The postmaster general is trying to get that law overturned as well, and the Senate has passed legislation to do so. But, once again, the House has yet to take action.

But let’s look on the bright side. It’s not as if Congress can’t get any postal legislation passed. According to the Courier Express and Postal Observer blog, “in each of the past five Congresses over 15% of all bills passed and signed into law named a Post Office.” And according to ABC News, the House introduced 60 bills last year to rename post offices.

37 comments
WakeUp2012
WakeUp2012

Does anyone commenting have a clue?  The post office is not in the business to make money.  When people use that argument its no better than the politicians pushing crap to your door to confuse you.  They are and should be no different than any organization in business to benefit Americans.  By the way they have no been funded by the feds and have been self sustained for how many years now?  20-30.  The have dumped  more employees than Enron.  I love the digital age comments from above.  Too funny.  Wake up, it couldn't be easier to use their services.  Have you ever sold anything on ebay.  It takes about 15 seconds to print a label and affix it.  My biggest issue is we need more postal carriers and I would like to see more mailboxes again.  Digital age.  Wow, everyone that has had enough of the digital age raise your hand.  I hate to say it, but I love coming home to hand written letters and packages.  It tells me there are still humans out there.  I can tell you one thing, all the digital age has done is make us you 200 percent more paper.  Btw, be smart and take a look at the consumption of paper in China.  They have use more paper in the past  10 years than the USA has used in 60 years. 

JasonHarris
JasonHarris

The Post Office pays $5 billion dollars per year to pre-fund a retirement program that is already pre-funded to the tune of 75 YEARS?!?!?  Sounds like a simple solution to me......GIVE BACK THE MONEY CONGRESS!!!!!

SonnyWard
SonnyWard

The Postal Union pressured Congress to leave Saturday delivery alone.  All Postal Employees called their Congressmen and they listened.  The only carriers that would lose their jobs were the subs that deliver on Saturday.

ehurley572
ehurley572

What better way to force the demise of the post office so that it can become someone's private profit.

manapp99
manapp99

The biggest problems the post office faces are obvious. They refuse to adapt to the digital age which means less paper mail moving. They also refuse to keep labor costs in line with the skill level it takes to make delivery of mail happen. 

In Colorado a young freshman Democratic State Senator proposed allowing the residents of the state to opt out of junk mail. Good for the public, good for the environment, but bad for the mail carriers union. The union told her that junk mail was 1/3 of total volume and her bill would result in the layoff of employees. This would have been good for the public as well as it would have reduced the postal service labor costs. Of course, being a good Democrat, she pulled the bill. Postal employees win and the public loses. This same scenario has played out in three other states. As long as the unions hold the people hostage we will be forced to overpay for government services and the post office is no exception. However unlike many governmental services the post office is facing competition in the form of the internet. It is going to be forced to comply at some point so we would be better served with downsizing the postal service and embracing a better way to communicate. The future is here and it doesn't need an antiquated postal service. Nor do the American people. 

As for the skill level part...the vast majority of postal jobs require little in the way of skill or education. We, the people, have been forced to pay much higher wages and benefits for jobs that do not merit them for a very long time. How is it fair to ask other subsidize wages and benefits they themselves do not enjoy for jobs that require no more skill than sorting, transporting and delivering of mail? It is a slap in the face for workers that know more, work harder, and get paid less. 


DeweySayenoff
DeweySayenoff

What gets me is that Congress tells the Post Office what to do and doesn't allocate he funds to do it.  The Post Office is trying to do things according to their income and doesn't have the power to make changes without congressional approval.  Given the fact Congress is broken, approval from them is about as likely as Republicans and Democrats shaking hands without feeling nauseated.  It will never happen.

So the Post Office will bleed money, be unable to modernize and will continue to fall into irrelevancy simply by a lack of competition.  I'm inclined to think that were it not for the fact that only they are legally allowed to deliver the mail, plus the fact Congress is awful at business management, they'd have been taken over by the other delivery services out there long time ago.

AlexP.Michaels
AlexP.Michaels

Technology has affected many things. With IM, email and being able to pay ones bills online, the Post Office is becoming a thing of the past. Why spend 42 cents on a letter and wait for it to be delivered, when you can push a button and send something online for free? I feel bad for all the postal workers who are affected by this. My Dad use to work for the Post Office before he retired. This is not a political issue but one of technology making the practice of sending mail by letters obsolete

jhoughton1
jhoughton1

I would happily do without Saturday delivery.  What's the big deal?  I get and pay most bills online. Most mail is junk.  The USPS uses a ton of fossil fuel.  Let's do without Wednesday delivery, too!

AlvaroSevilla
AlvaroSevilla

It`s more simple the private companies like all you know it want that piece of market, in that line they are playing a long play game with the problems with one of the best public companies. My friends please see the whole picture if USPS don`t exist at the moment that ........ take the business.

MarkJamison
MarkJamison

Congress is only part of the problem, albeit a big part of the problem. The leadership of the Postal Service beginning with the Board of Governors and down through senior management at L'Enfant Plaza have been systematically pushing an agenda that dismantles the existing infrastructure and moves towards privatization.

Yes, the RHBF payments have been devastating but senior management has focused on a gloom and doom scenario that has helped to erode service, confidence and mail volumes. The prescriptions PMG Donahoe has offered are doomed to fail. Congress is feckless and inept but that's really only a small part of the story.

StrategicMarketingEngineer
StrategicMarketingEngineer

Great perspective Josh, can you start a National Investigative Report?

The conundrum is GREED. Headquarters and Congress (the major stakeholders) could care less about the deteriorating service they control. The general public has no idea of the political pandering that goes on with their service. The real trail of failure should be investigated by the Justice Department ( OIG seems to be sold out too), simply count the millions of lobby bucks and special interest deals, big contracts with FedEx, UPS, etc.. The dismantling of the United States Postal Service can be linked to many spin-off services started and invested in by these same greedy honchos. Product and service advancements are stifled by special interests.

Quick Fix:

P.O.B service 7 Days a week all classes of mail.


Express Mail 7 Days a week.

M-S Priority Mail

Develop an electronic 24-7 'Special Delivery', that could be delivered for a premium price.

M-F Carrier Delivery.

Retire all USPS Civil Servants (Buy Out) with $7billion CS retirement fund surplus, shift USPS retirement to FERS.

Hire thousands of lower paid entree level employees.

Move T-6 functions to Express, Priority, and Special Delivery functions.

Develop a co-op that is publicly supported and serves no one special interest.

Remove 'Corporate' focus from USPS return to 'SERVICE' focus.



There are many ideas and suggestions already on the books, inventive, intuitive and profitable. Seek the products and services that will generate revenue to overcome losses from E-communication systems. Stop the greedy decision making.


Come on America, lets live to be debt free!    

postalworker1975
postalworker1975

While it's true that PMG Donahoe has reduced the workforce, most of that workforce are the employees that perform the actual work.  Headquarters has remained essentially with the same staffing.  These are the more expensive employees and they are "non-productive."  Headquarters needs to be equally trimmed to reduce costs.

LiamSkye
LiamSkye

Very good article, and the sentence "Postmaster General Patrick Donahoe is like a man waiting for a package that never arrives" is a classic!

PainterBarry
PainterBarry

The author is correct in that Congress is the real problem.  However, lets give credit where credit is due.  Congress is extremely efficient at "naming" and "renaming" existing Post Offices. 

Captain_Quirk
Captain_Quirk

While I share your concerns about government employee unions (which are different from private sector unions), I disagree with you regarding junk mail.

Junk mail is a profit center for the postal service and subsidizes the rest of the USPS's operations.  If the USPS is having financial difficulties, the LAST thing you want to do is eliminate junk mail.

clf960
clf960

Like to see lhougton1 deliver mail 1 day a week in some local war zone hoods,show a little respect.

Sucka
Sucka

@manapp99 . Paying .46 to send a letter/document to any state in the country, including Alaska and Hawaii, is not holding the people hostage to overpay for government service.  "As for skill level part..." Yes, it does not require great skill to sort, transport,  or deliver mail, but is does require some skill.  You would be shocked how many people(yes, very smart people) who do not make it through the probationary period. As for pay, your mail courier's pay is in line with UPS/FedEx, and don't believe your mail courier doesn't work hard with 800-1400 deliveries including packages. Other positions are higher than their FedEx and UPS counterparts and should be reduced.  The biggest cost bar none is the $5.5  billion payment the post office makes annually to prefund future retiree's health care for 75 years in advance.  No other public or private corporation is required to fully prefund  75 years in 10 years. The post office need's to cut cost but it need's to generate revenue and there are many ways to generate this revenue. 

jhoughton1
jhoughton1

@manapp99 The world over, government jobs are a way to employ the otherwise unemployable.  It's like having a kid who can't get a job and lives at home or needs a monthly check.  It's what governments (whether they're autocratic dictatorships or democracies) do to keep people in the economy, at least doing something half-way useful.  We pay taxes and frankly I think sending people house-to-house with junk mail is a better way to spend it than invading Iraq or building an F-35 (though, of course, that's another taxpayery-funded jobs program).  There's no simple answer, but one thing I know, you can't just start firing everyone left and right.  

Captain_Quirk
Captain_Quirk

Sending letters by mail is NOT obsolete.

While it's true that more people are using email and the internet, and as a result, fewer people are mailing leters, IT DOES NOT FOLLOW that everyone is.  Many people, especially lower-income or elderly folks, don't have internet access or email accounts.  For them, sending and receiving letters is the only way of communicating with them in writing.  I much prefer email myself, but I have several clients who don't have internet or email, and so I have no choice but to send them letters from time to time.

It's easy to assume that everyone else in the world is in the same situation as you, with the same resources, etc., but that is not the case.  There are still many people out there who need the good old U.S. Mail.

Captain_Quirk
Captain_Quirk

Yes, I'm sure you would happily do without Saturday delivery, but not everyone is you.  Not everyone has online access and email like you do.  I have several elderly and low-income clients, and they don't have email or internet access.

Not everything in the mail is bills and advertising, and life doesn't stop on weekends.  Indeed, sometimes weekends are the only times that people have time to get things done.  In such situations, mailed documents that are needed for review over the weekend must be delivered on Saturday, not the following Monday when the weekend is over.  By then, it’s too late.

Time matters, and having two days of no mail delivery, back to back, results in too much of a delay.  People need to get their documents and notices in a timely manner, and going from two days of transit time to four days is just too much.

manapp99
manapp99

@jhoughton1 Yes. It is interesting that the same people that are warning us that we must do everything we can to reduce our carbon footprint are for saving postal delivery as is. With it's massive carbon footprint, and a readily available alternative to paper mail you would think the USPS would be low hanging fruit for environmental activists.  

nubwaxer
nubwaxer

@StrategicMarketingEngineer live debt free?  we have large obligations to social security and medicare as well trying to support the monstrosity of our military empire.  either we pay for goods and services we promised to pay for or renege on them at the expense of the elderly and veterans.  republicans don't want us to pay these obligations which do not further enrich their rich backers.  no funding=debt.  as simple as that.

manapp99
manapp99

How are the postal union benefits as opposed to Fed Ex and UPS? Also, why does the government protect the first class mail delivery monopoly the USPS holds? Clearly if allowed to compete the privates could do so more effeciently and the post office would die a natural death as it should. We are protecting an institution that has out lived it's usefulness and it is costing the average joe and jane doe to do so. Just like with public schools. If a business model cannot live up to the competition and serves no purpose that the private sector cannot adequately fill then the best thing for the majority of Americans is to let it go. If, on the other hand the postal service can justify it's place in the free market then it will thrive without artificial support forced on the public by government. The government should adopt the medical profession saying of first doing no harm. The post office is kept alive at a cost to Americans. Many of whom make less and will have a far less desirable retirement than the people they are being asked to subsidize.

manapp99
manapp99

@jhoughton1 @manapp99 There have been plenty of examples of people being pushed out of jobs by new technology in history. The postal service jobs should not protected anymore than buggy whip jobs should have been saved when cars took over. Government has a way of stopping the natural progression of business and it's offspring employment. The propping up of the mail service is not helpful to the collective American population. Change will always claim some but that is not a reason to stand in it's way. Instead of comparing delivery of mail to going to war why not see the wisdom of not doing either. We are not having to chose between building F-35s and keeping overpaid, low skill employees on the dole. The simple answer is to let the free market be truly free and embrace the change. This applies to public education and our tax code that stifles innovation as well. 

AlexP.Michaels
AlexP.Michaels

@DeweySayenoff @AlexP.Michaels Like it or not. Need it or not. It is true that Email has made people send letters less often.  I live in Cleveland where the local newspaper is suffering because people read their news online. So that is another thing affected by technology (newspapers). 


jhoughton1
jhoughton1

@Captain_Quirk The image you propose, of elderly and low-income people spending their weekends poring over hot-out-of-the-mailbox bills doesn't comport with the reality I see.  Bills are sent well in advance of due dates and notices are sent well in advance of actions being taken.   In a perfect world, we could all have everything we want; cutting out Saturday delivery seems like a reasonable compromise to keep the USPS healthy and operating. 

bobcovino
bobcovino

actually no they don't we deliver the packages they can't make a prophit on. Watch any USPS dock and watch the ups trucks pull up. We are mandated to give universal service for the same price. Doesn't matter if we are delivering to downtown big city or down to the bottom of the Grand canyon. You are comparing apple's and oranges. Ask ups or FedEx to do that then talk to me.

Captain_Quirk
Captain_Quirk

I guarantee you that nobody wants to deliver first class mail to rural areas. It's way too expensive.  That's the main reason why the USPS was given a monopoly on first class service -- it uses the "profits" from its operations in urban areas to subsidize the cost of delivering to rural ones.  If you privatized the Postal Service, the private companies would snap up the profitable routes and ignore the rural ones, leaving residents in less-populated areas out in the cold.

Considering that 46 cents to mail a letter is darn cheap, the USPS probably should be allowed to raise its prices (MODESTLY).  That, coupled with dropping the insane requirement to pre-fund 75 years' worth of retiree healthcare, should put the USPS back on firm financial footing.

manapp99
manapp99

@ehurley572 @bobcovino Fed Ex and UPS deliver packages in rural routes. Perhaps they will not want first class service there but it would be ideal for niche small business companies to get bulk and deliver to the neighbors. Let the market work and watch the magic. Internet, cable, utilities etc have been challenges for rural areas as well but they still manage. First class mail would be the same. If there is profit...they will come. 

manapp99
manapp99

@bobcovino I would indeed be for untying your hands in every aspect. No first class mail monopoly and let you put prices wherever you need to make a profit. If you can withstand the competition then more power to you. If not then so be it. 

ehurley572
ehurley572

@bobcovino 

FedEx and UPS would drop rural routes in a heartbeat as not being cost effective.

bobcovino
bobcovino

because we are mandated to break even. If we could have made a prophit over the years we would have had enough money to get us thru the pre funding fiasco that was dropped on us.

We can't raise prices to compete without congressional approval we can't lower prices in areas to be competitive and we have to pre fund future retires. Untie our hands then compare us to a private company.

manapp99
manapp99

@noappneeded @manapp99 You should read this article on Slate. 

http://www.slate.com/articles/business/explainer/2013/02/post_office_ending_sunday_delivery_why_can_t_the_u_s_postal_service_make.html


An excerpt:


he U.S. Postal Service announced Wednesday that it would end Saturday letter deliverybeginning in August. The change reportedly will save the USPS $2 billion annually. UPSand FedEx post profits fairly regularly. Why can’t the Postal Service make money delivering mail?

Because it got complacent holding a monopoly. The U.S. Postal Service has a legal monopoly on the non-urgent delivery of letters. It used to be an extremely valuable asset. The monopoly was so valuable, in fact, that the agency built its future around the lucrative first-class letter business. With the profits from first-class mail, the Postal Service priced the delivery of newspapers and magazines at well below cost. In 2006 alone, the USPS subsidized periodicals to the tune of $273 million. The profits from first-class letter monopoly also allowed the Postal Service to stand by while private companies dominated the now crucial parcel-delivery business. The Internet eventually made letters obsolete; gas prices surged; and health care and retirement costs rose beyond projections, turning letter delivery from a cash cow into a burden. (The true cost of delivering a letter is likely more than twice what we now pay.) The collapse of first-class mail was inevitably going to damage the agency. Many observers believe, however, that the Postal Service could have survived those challenges, and even prospered like other delivery companies, if it hadn’t relied so heavily on the profits from its exclusive letter-delivery business.

manapp99
manapp99

@noappneeded @manapp99 When you have only one outlet for service and it is a government entity you can fairly call it a tax on the people. The first class mail system is a government monopoly. As such they are not allowing competition. That is making the cost of sending a first class letter cost more (presumably) or they would not fear competition. Even if UPS workers make more per hour you have to factor in benefits as well as how many people are employed by the USPS that are not productive. The bottom line is that UPS is profitable and the USPS is not. 

noappneeded
noappneeded

@manapp99 UPS workers make MORE per hour,look it up. Actually,most of your posts are wrong,no tax dollars coming in.

Captain_Quirk
Captain_Quirk

Well, the "reality" you see is not the reality I see.

I'm not talking about bills, jhoughton.  I'm talking about important, time-sensitive documents, correspondence, and notices.  I'm a lawyer and I can tell you that this is a real issue.  Just recently I settled a case where a six-page settlement agreement had to be signed by several parties, including my client, all in different locations, and then returned to me, and it all had to be done before a rapidly approaching deadline due to Medicare regulations.  Doubling the transit time from two days to four would have severely impacted that process.

It's one thing to lose a single day (e.g. no delivery on Sunday).  But to lose an additional day adjacent to the first day (i.e., Saturday) would really start to gum up the works.  That's what I mean when I say it can double the transit time from two days to four.  (In fact, it can even TRIPLE the transit time from one day to three for local deliveries.) 

If the postal service MUST drop a day of delivery, let it be a day in the middle of the week, so it will have the least impact.  At least then the item can be delivered the next day, instead of the day AFTER the next day, so the additional delay would be just one day instead of two.