Have a Happy New Year: privatize @USPS

Posted by: Phineas on December 31, 2013 at 8:35 pm

**Posted by Phineas

Poor, trusting fool

Poor, trusting fool

This is a bit of a personal rant to end the year on, but a recent experience with the US Post Office and trying to get a package delivered has lead to the conclusion that one of the best “little things” a new Republican Congress could do in 2015 is privatize the danged thing. First, my recent travails:

On Christmas Day I received some Amazon (1) gift cards. Being a good little consumer, that afternoon I ordered some goodies, including a highly-rated electric skillet (This one, in fact. It’s a great price.) that Amazon promised to deliver for free by the 28th. Great!

So, on the 28th I stayed home to wait for the delivery. By that afternoon, I was curious, so I checked Amazon; “delivery attempted.”

“Really?” I thought. So I checked the USPS site: “Delivery attempted at 9:37 AM. Notice left.”

By now a bit concerned, I went down to the front of our apartment complex to check the mailboxes: no package, no notice, no nothing. Like I said, I had been home all day. My cell phone was on, the ringer set to “loudest.” At 9:37 AM, I was letting in my writing partner for a day’s work. In other words…

I WAS HOME!

Apparently the schmuck carrier couldn’t be bothered to actually try to contact me. I understand he couldn’t come to my door (it’s a large, winding complex), but… he could have called. I’d have come right down. But, I guess he didn’t want to make the effort. Maybe he was tired.

Checking the USPS site again, I saw a redelivery option (2) held out the promise of delivery Monday (yesterday). So, I filled out the form and printed the receipt. Problem solved — yay!!

You can guess what’s coming.

I waited at home all Monday, not daring to leave my apartment lest I miss the carrier and my new toy. By 5PM, I went downstairs to check and found the regular mailman. I asked her about the package — she’d never heard of it. “What about redelivery,” I asked.

Jay Carney gives more informative answers.

Finally, she helpfully suggested the other carrier might have left it with the building managers. Nope. Not on on their list.

So, this morning, I walked to the post office, waited for the lone clerk at the counter to finally call me forward only to tell me to go to “the door on the left.” After a half-hour or so, I was beginning to fear my package was really “out for delivery” this time, probably to the wrong address. But, no, I was rewarded at the end, the package was mine. Happy New Year, indeed. I then trudged the 1.5 miles home, this time carrying a bulky box and swearing eternal vengeance on the Post Office.

Okay, so, as far as horrible experiences with the USPS goes, and as maddening as it was, that was fairly minor. I’m sure any of you reading this could come up with far worse. But the whole experience had me wondering…

Why do we put up with this garbage?

Private companies have a much harder time getting away with poor service. Not only are there irate customers who can go elsewhere, but angry shareholders to wonder why they’re not making money. And, at the end, a poorly run, money-losing company goes out of business.

The USPS, which lost over $20 billion from 2007-2010 –and $5 billion in FY 2013, goes chugging on. This report from the Cato Institute well-documents their problems. For example:

A key driver of mail delivery costs is the congressionally mandated obligation to serve virtually every mailing address, regardless of volume, six days a week. Fulfilling this “universal service” obligation results in the USPS having large fixed costs, including the costs of more than 36,000 postal outlets, 215,000 vehicles, and 600 processing facilities.

However, even given the universal service obligation, the Government Accountability Office and USPS officials believe that more than half of these processing facilities aren’t needed. Why aren’t they closed down to save money? The GAO notes that the USPS faces “formidable resistance” from members of Congress and postal unions when attempting to close or consolidate facilities.

The USPS is required to provide services to all communities, including areas where post offices have low traffic and are not cost effective. Before closing a post office, the USPS must provide customers with at least 60 days of notice before the proposed closure date, and any person served by the post office may appeal its closure to the Postal Regulatory Commission. The USPS cannot close a post office “solely for operating at a deficit.”

Members of Congress whose districts would be affected by a post office closure often raise a big fuss. Last year, for example, the USPS proposed consolidating 3,200 postal outlets, but following a congressional outcry, the number under consideration was reduced to a paltry 162. That is no way to run a business.

No, it’s not. Labor costs are also a problem:

While the USPS has been able to eliminate a substantial number of employees through attrition, the USPS’s predominantly unionized workforce continues to account for 80 percent of the agency’s costs despite increased automation. The USPS estimates that, in the absence of changes, its total workforce costs will soar from $53 billion in 2009 to $77 billion in 2020.

And at the root of these costs are restrictive union contracts:

Another factor that reduces postal service efficiency is that union contracts inhibit the flexibility of USPS leaders in managing their workforce. For example, most postal workers are protected by “no-layoff” provisions, and the USPS must let go lower-cost part-time and temporary employees before it can lay off a full-time worker not covered by such provisions.

There’s a lot more in this report, which makes a great case that the postal service should be privatized and its monopoly on first-class mail ended. The benefits would redound to the benefit of taxpayers and customers, providing the service the Founders had in mind when they gave Congress the power to “…establish Post Offices and post Roads.” In this day and age, that does not require a government-run, inefficient, and monopolistic postal service.

It’s time to privatize the USPS.

I might then get my packages on time.

Footnote:
(1) By the way, if any Amazon employees are reading this, tell your boss, Jeff, to stop using USPS for deliveries. It’s your two-day guarantee to Prime customers they’re breaking and your reputation they’re harming. Fire them.
(2) The page for which apparently works as well has the healthcare.gov payment system — not at all. I sense a trend in government-built web sites.

(Crossposted at Public Secrets)

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9 Responses to “Have a Happy New Year: privatize @USPS”

Comments

  1. Drew the Infidel says:

    As hard as it may be to believe, these gumballs are in the midst of a hiring campaign. Maybe with that sort of financial acumen, they can find the wherewithal to sponsor a college bowl game also. You know, the same way flat broke GMAC did in the midst of their government bailout. And all at taxpayer expense.

  2. Carlos says:

    And with the Turkey-in-Chief we have, the proverbial snowball has a better chance of staying frozen than we have of getting rid of the USPS and its unions.

  3. Dan says:

    My regular mailman is awesome. His sub is the one I always fear.

  4. Mike says:

    Probably worth noting that the USPS is already privatized … meaning your tax dollars don’t go to support it. You probably also saw the hubbub about Fedex and UPS having shipping problems at Christmas time as well (http://abclocal.go.com/wabc/story?section=news/national_world&id=9372046).

    There is no question USPS has lots of challenges … competition, huge infrastructure, rising expenses, a dwindling market, but it was the change in the way benefits costs were allocated (http://www.cnbc.com/id/45018432) that really created the huge challenge for them.

    Still, at 49 cents (the price of a stamp is going up by 3 cents on 1/26/14 but you can save 3 cents a pop if you buy your Forever stamps now; heck of a deal :-) it is still amazingly cheap to be able to send a letter anywhere in the country.

    Sorry you didn’t get your package for Christmas. That does suck.

  5. Phineas says:

    Hi Mike,

    We evidently have different definitions of “privatization.” From the Cato report:

    The U.S. Postal Service is a branch of the federal government. It is headed by a Postmaster General and a Board of Governors, with further oversight provided by the Postal Regulatory Commission. However, ultimate authority over the USPS rests with Congress.

    The USPS is structured like a business in that revenues from the sale of postal products generally cover costs, and it receives virtually no federal appropriations. The organization is the second-largest civilian employer in the United States—after Wal-Mart—with about 600,000 workers. If the USPS were a private company, it would rank about 28th on the Fortune 500 list of largest companies.

    While the USPS is structured like a business, Congress often prevents it from actually operating like a private company, such as taking actions to reduce costs, improve efficiency, or innovate in other ways. The agency is also obligated by statute to provide mail services to all Americans, irrespective of where they live and the cost of serving them. Furthermore, it is required to deliver first-class mail at a uniform price throughout the nation.

    While Congress imposes various costs and obligations on the USPS, it also protects it from competition. The USPS has a legal monopoly over first-class mail and standard mail (formerly called third-class mail). Thus, we have a postal system that encourages high costs and inefficiency, while preventing entrepreneurs from trying to improve postal services for Americans.

    So, while it receives few taxpayer dollars, it is still bound by the rules Congress sets for it, significant portions of its business are not subject to competition, and it does not have the freedom of action of a private company. I’d hardly call that “privatized,” would you?

    As for Fedex and UPS, yep, they screwed up. And they’re answerable to their clients and owners for it, as is Amazon, one of their biggest clients. Which is why Amazon and UPS are offering refunds on the shipping charges to people whose package deliveries were screwed up.

    How is USPS accountable? I filed a complaint through their web site, and I’m still waiting for a reply, five days later. Amazon answered my query within 12 hours on the 28th.

    Oh, wait. I did hear from USPS: I received an email Tuesday asking me to take a survey to tell them what I thought of their customer service page. You can imagine how I filled that out.

    Sorry you didn’t get your package for Christmas. That does suck.

    I appreciate it, but it wasn’t a “Christmas package.” As I wrote, it was an order I placed for myself on Christmas, with delivery promised for the 28th. After the rush.

  6. Carlos says:

    How is the USPS “privatized” when Congress has to bail them out every year? They’re even less “privatized” than GUM (Government/Union Motors) and Chrysler, neither of which will ever pay back the tax dollars poured into them to save their precious unions while stealing all the legitimate money investors had laid out.

    Either they are a “private” business or they aren’t. And with Congress’ ability to run it (see all the money-squandering offices demanded to be kept open), I would hardly say it has been “privatized,” Mike.

  7. Mike says:

    Phineas … I figured that would be your response.
    Carlos … Except Congress doesn’t bail out the USPS.

    My core point was that the USPS is not supported by your taxes. This seems to be a point that USPS haters regularly ignore or mis-state.

    For the rest I’d generally agree the the USPS would do much better if not for the clueless intrusion / direction of Congress. But then, wouldn’t we all.

  8. Carlos says:

    @Mike: Then why does the USPS yearly go to Congress with hat in hand asking for more money to make up for the ocean of red ink they annually run? And that has happened every year since I started paying a little bit of attention back in the seventies.

  9. Mike says:

    Carlos … because they need Congressional approval to raise the cost of a stamp (or make other changes to their business model). Interesting trivia that in 1976 a stamp cost 13 cents and a snickers bar cost 15 cents. Today 46 cents will get you a stamp. A snickers bar will set you back about a buck.