Thursday, February 7, 2013

Mail Run?


Mailed a letter lately?

Yeah, me either except when I need to stuff a bunch of mail into an envelope and send it off to relatives that haven't lived at my address for 3 years.  I have to do that because the last time I tried to get a forwarding order for them all the mail, including mine, went to their new address.

It took almost two years to straighten out that mess. 

Which really makes me wonder what I've been paying for over the past decade of regular postage rate increases.  Since 1991 the cost of a first class stamp has risen 17 cents.  Meanwhile, the post office has been reducing hours, cutting staff and playing outsourcer for UPS and FEDEX. 

Ok, so we've all heard the jokes about poor service, rude employees and mishandled mail.  Almost immediately after the advent of electronic messaging the postal service earned the moniker of "snail mail."

So now comes news less than a month after the latest rate hike that you won't be getting any mail on Saturdays  Packages will still be delivered but that's about it.  The move is supposed to save some 2 billion dollars but even Postmaster General Donahoe knows it's not enough. 

Donahoe's been "officially" claiming Internet messaging and carrier competition is driving down revenue and putting him in the red. 

In reality, the reason for the nation's mailman being in such dire straits has nothing to do with business operations.  It has to do with an accumulation of  20 Billion in debt since 2006 thanks to a document called the Postal Accountability and Enhancement Act

Regardless of the spin, no amount of cost cutting or employee attrition can offset it.
You've heard of taxation without representation, right? 

Well, if the postal service were a real person it would be the poster child for it.  You know, just like corporations are people to certain political parties. 

Technically, the postal service is not a government agency but a public entity created by the constitution.  Only congress has authority over it.  Unfortunately, that also makes it a vulnerable to politics.  The same kind of politics that have been seeking to privatize more and more public entities like Medicare, Social Security and now the U.S. Postal service. 

You see, the problem with the Postal Service has nothing to do with the Internet or competition from other carriers.  It has to do with a burden placed on it by congress that mandates that it fully fund pensions for 75 years.    No other federal entity under the authority of congress is required to do this.  In fact it actually funds pensions for employees that will likely never be hired.  Do the math and you'll soon find that an unfair burden has turned a successful business model into a organization starved for resources and failing.   

While First class mail has been on the decline, parcel shipments have been on the rise according to Donahoe's own charts.  Without the extra burden of an overfunded pension plan there'd be no deficit and no corresponding need to cut anything.  And there's the rub.

Donahoe either has no clue about what's wrong with the postal service (unlikely) or he's trying to bluff congress into fixing the real problem.  If he is, he runs the risk of turning public opinion against him with fewer service days and higher prices.  With a 113th congress much more receptive to the electorate than its predecessor that could spell final doom for the U.S. mail. 

You've placed your bet Mr. Postmaster, let's hope you're holding a royal flush.