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Topic: can you believe the price is..

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Subject: can you believe the price is..
Date Posted: 4/4/2009 8:18 PM ET
Member Since: 7/24/2008
Posts: 860
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going up per pound of media mail. thats crazy. how can they act like they dont make money. with ebay and amazon.com half.com. then the swap sites. wheres all this money go! there thinking of closing po branches in my neighborhood. i think its just nuts!

Date Posted: 4/4/2009 11:41 PM ET
Member Since: 2/19/2008
Posts: 2,007
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The USPS has been operating at a loss for the past ten years.  Last year they were almost $3 billion in the red.  Check the papers, it's been in the media for months now, and the Postmaster General was before Congress last week.

Date Posted: 4/4/2009 11:58 PM ET
Member Since: 7/24/2008
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you actually belive that. you think the usa post office looses money. what put them in a 3 billion dollar hole.i do not believe they really lose money.

Date Posted: 4/5/2009 6:59 AM ET
Member Since: 8/27/2005
Posts: 4,123
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I'm sure they are losing money, partly due to the decrease in customers over the years (because of competition from other services and because of the increase in internet communication, bill paying, etc.)  Of course, the fact that they are set up to be unable to get rid of inefficient employees is what will make it impossible for them to ever be profitable again.  I feel for the many good employees that work for the post office, it must be incredibly frustrating and demoralizing to have to work with people who don't do their job and never see anything done about it.

Subject: There are several reasons why the Post Office is losing money...
Date Posted: 4/5/2009 10:41 AM ET
Member Since: 5/19/2008
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I'm currently a Delivery Supervisor in Kentucky at a Post Office with 9 City Carrier routes and 28 Rural Carrier routes and I live 28 miles away from work. For the 26 months previous to last September I worked at a Distribution Plant that was 89 miles away from home.

So far this year Mail volume is down about 12 BILLION pieces since this time last year. Last year was about 15 BILLION less than the year before and the projections indicate it's not going to upswing anytime soon.

Businesses are hurting for money so they don't have the advertising budget they used to have so they are mailing less volume of standard mail implying a loss of revenue to the Post Office.

Remember last summer's gas prices?

The Post Office has the largest fleet of vehicles of any business. LLV's (Long Lived Vehicles) which is what your typical postal truck is called and fuel economy is pretty poor, not to mention if it's a motorized route which requires you to stop at 600 mailboxes every day the maintenance cost is heavy in comparison. Many of my rural carriers drive LLV's now if their route is less than 35 miles, The longer routes still drive their personal vehicles and the longest route I have is 58 miles. In the more rural areas you can easily have a route that is over 100 miles per day.

Another impact of the decrease in volume is that we have a unionized craft work force that is guaranteed 8 hours of work/pay per day. So we have to manage our reduced workload in such a way that our craft people get their guaranteed hours but that we give them an effective workload for that amount of time.

Recently the Post Office finished up a series of early retirement offers (without any additional monetary incentives) and are in the process of doing another one.

This one starts with the supervisory and technical support staff. There are 80 Administrative District Offices in the U S of A and 6 of them will be closed with their workload being distributed to adjoining districts. That's 500 people who have to either retire (~80% are eligible) or find another position elsewhere in the Postal Service. Then there will be a 15% reduction in the number of positions at the other 74 District Offices (that's at least another 700 people)

The next group of people who is affected are Line Supervisors and Managers at over 400 Distribution Plants. 1400 positions are being removed (basically they are increasing the number of craft personnel that each Supervisor has to manage) A good analogy here would be the school system, give each teacher an additional 5 students to teach everyday without any additional time or support.

Guess what happens if these people don't either retire or find another position by September?

Ever heard of RIF? Reduction In Force They lose their jobs.

Over the last 15 + years or so the USPS work force has been shrinking due to advances in mail processing. Increasing automation efficiency implies less manual work is required in Distribution Plants. Of course population growth would require more Carriers. Usually the normal attrition for positions would be as people retire or quit and their positions are abolished.

The last step in this process is that 150,000 craft employees are being offered early retirement.

The other nasty added expense is that in 2006 Congress passed a Law which required the Post Office to have a certain amount of money in a federal retirement fund. The fund was solvent and didn't have any problems but this is requiring large yearly payments into this fund for a ten year period to get the balance up where Congress wants it. I'm talking Billions of dollars each year.

Yes with a unionized work force it is hard to get rid of inefficient employees, but I'm working on that.

 

What do many USPS employees have in common?     They are Veterans.

Whether they served a three year hitch or retired from the military they have either 5 or 10 points added to their test scores plus the opportunity to take a Postal exam within a few months of when they get out of the armed forces. (I served 21.5 years in the Navy) Which means that the average age of a career employee can easily be 40+.

There is a big difference between a 20 year old walking a mail route compared to a 40 (or 60) year old walking that same route.

Think about the mail you get at home, a couple of years ago you got more catalogs and flats from companies wanting your business. Letters get automated easily but flats (catalogs etc) still have to be cased (sorted) by the carrier for delivery. Typically, three years ago it was nothing to have a carrier have to case up 7 or 8 feet of flats, currently they would have 3 or 4 feet. They are allowed x amount of minutes to case up x amount of flats. With the lower volume they finish up earlier in the office and go to the street. Their street time will reduce a little because of the lower volume but they will be short of their 8 hours. The Supervisor then has to Pivot mail from other routes to make up for the missing workload. One of my routes is an Auxilliary route (only six hours long) and I can portion it out to fill the other routes on a daily basis.

First class letter volume is down, part of this is due to emails, another part is due to online bill pay etc. I looked back to about 5 years ago and I added up how many checks I wrote for monthly bills. Mortgage, car payment, 3 different credit cards, Phone bill, Cable Bill, Garbage bill, Electricity, Gas, Water, Medical bills, Dentist, Book clubs, etc. You could easily have 20 letters a month going out. Most people including myself now use online Bill pay. I cheat I use my Bank and they mail out the check :)

Also since 2002 the Post Office has reduced manning by 120,000 people by attrition (as people retire or promote into another position they abolish the old position). A lot of this was because of the improvements in Autoomation but also with the consolidation of a lot of the old one person type Post Offices.

Another loss of revenue is people who use Media Mail rate for non Media Mail items or who invert Priority or Express boxes or envelopes and use them for Media Mail or Parcel Post.

I love being able to use Media Mail for it's intended purpose, I have mailed out over 500 books to PBS members in the past year and received over 1,000 books.

Kevin



Last Edited on: 4/5/09 3:23 PM ET - Total times edited: 1
Date Posted: 4/5/2009 3:02 PM ET
Member Since: 9/19/2006
Posts: 3,314
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WOW, Kevin. I knew it wasn't good, but didn't realize it was quite that bad. I have a wonderful rural po and I really appreciate them.

Pam

Date Posted: 4/5/2009 3:51 PM ET
Member Since: 2/5/2007
Posts: 30,797
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Kevin - thank you for a great explanation.  Anyone reading this has a better idea what the PO is trying to do and what the people who work there face daily.  Great post!

Date Posted: 4/5/2009 9:36 PM ET
Member Since: 8/16/2007
Posts: 15,185
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It does seem like a spiral that the USPS will never be able to get out of. They need to raise their prices because less people are using them, but that will cause more people to look for cheaper options resulting is less revenue and more price hikes. Unfortunately for the staff, the only way out of that spiral is to cut costs, and the easiest way to do that is to cut employees.

I love working with the staff at the PO I go to. They are experts at their job and treat people very well.  I hate to see any of them lose their jobs. I have noticed that no matter how much the area they serves grows, there's been no new faces to help with the increased workload.

Date Posted: 4/6/2009 4:16 PM ET
Member Since: 6/20/2007
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Kevin, thanks for a great post!!!  Some of it hits home for me--my sister is ex-military and is a postal worker in KY!

The other part that truly rings a bell with me is how when the PO raises its rates people look for other options.  I am also a case in point here--I switched to online banking precisely because of postal increases.  I also try to ship parcels UPS Ground or FedEx Home instead of by mail, as DH and I get to use our company's corporate discount, which amounts to cheap reliable shipping where the insurance is often included in the price of shipping. 

we have a unionized craft work force that is guaranteed 8 hours of work/pay per day

This is a problem when there's not enough work to go around.  While I never like to hear about someone losing their job, I also don't think it's fair that someone keeps their job even when there's not enough work to do, just because it's guaranteed through a Union.  JMHO.  My sister was not part of the Union, and the PO she was working at had a University postal route.  For 3 weeks in January when the University shut down, she was put on leave from the PO and told to file for unemployment for those 3 weeks, as her Route was being given to the guy that usually did the University route because he was senior over her.  Obviously no 8 hours pay a day for her!

The other nasty added expense is that in 2006 Congress passed a Law which required the Post Office to have a certain amount of money in a federal retirement fund. The fund was solvent and didn't have any problems but this is requiring large yearly payments into this fund for a ten year period to get the balance up where Congress wants it. I'm talking Billions of dollars each year.

I remember when this legislation passed.  It is ridiculous.  reminds me of the old adage "if it ain't broke, don't fix it."

Date Posted: 4/7/2009 12:13 AM ET
Member Since: 12/28/2006
Posts: 14,167
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Shaun, the postal service is a branch of the federal government.  And big government has NEVER operated financially effective or efficient...EVER.

Date Posted: 4/7/2009 2:00 AM ET
Member Since: 7/24/2008
Posts: 860
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thanks for the info guys. but it is really hard for me to believe they lose money.

Date Posted: 4/7/2009 9:35 AM ET
Member Since: 8/21/2005
Posts: 989
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Kevin is right. I'm a part time rural mail carrier and i've been with our post office for 5 years and over these years i have seen a dramatic decrease in the amount of first class mail that comes thru. This year i noticed a huge decrease in the amount of Christmas cards being sent out. I used to get about 30-40 cards per year delivered here to my house, this year i only received 8 cards total. USPS is really taking a hit and the high costs of gasoline not so long ago really added to it. Things are bad enough here in my hometown that i am worried about having a job, they are talking about elminating some rural routes and making people get P.O. boxes instead. Some of the smaller Post Offices are closing and consolidating with larger offices. I'm in a town with 1,300 people, we could very well lose our office. Maybe those who do online bill paying don't give a rip if we no longer deliver to them, but what about the elderly people who do not have computers or the growing number of Amish communities we have on our rural routes who rely on the mail to contact family and loved ones and mail packages to each other?

Date Posted: 4/7/2009 9:48 AM ET
Member Since: 2/19/2008
Posts: 2,007
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One thing I haven't seen pointed out yet is that, even with the coming rate increases, we pay one of the lowest postage rates of any country in the world.

Date Posted: 4/7/2009 10:43 AM ET
Member Since: 8/16/2007
Posts: 15,185
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Shaun, the postal service is a branch of the federal government.  And big government has NEVER operated financially effective or efficient...EVER.

The post office is NOT a branch of the federal government. From the USPS site: In 1971, the Postal Service became independent.



Last Edited on: 4/7/09 10:46 AM ET - Total times edited: 1
Date Posted: 4/9/2009 12:59 PM ET
Member Since: 8/18/2005
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Kevin, what are craft personnel?

Date Posted: 4/9/2009 5:03 PM ET
Member Since: 3/26/2009
Posts: 131
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I don't see why it's so hard to believe that they've been operating at a loss for ten years.

Seems to me about 12-15 years ago Email came on the scene (in mass quantities) and has grown every year since. Practically everyone under 60 has an email address it seems. Why send a letter though snail mail when you can shoot off an email that will get there in minutes? Don't forget, what we use email for now is what people used to use the PO for. Now most of the mail is business related.

So you have a huge drop in volume but you have all of the same overhead, then some.

Then you have to look at the workforce, as stated above the workers are pretty much required by contract to get paid for 8 hours even if they don't have the work to keep everyone busy for 8 hours. Plus, they get paid pretty well compared to jobs that require the same skill set and training and get very good benefits compared to similar jobs.

It's not hard at all to believe that they are losing money.

 

Subject: Craft personnel
Date Posted: 4/9/2009 7:25 PM ET
Member Since: 5/19/2008
Posts: 562
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Is the term used for your workers in the 'Craft"

such as:

A window clerk, or a distribution clerk is part of the "Clerk" craft and have their own union, A city carrier is part of the city carrier craft with their own union, and rural carriers belong to a rural carrier union (custodians and maintenance personnel fall under the clerk craft).

Basically, craft personnel are those who work for an hourly wage doing craft work. Supervisors, technical support people, secretaries, managers, Postmasters, administrative support personnel are considered management or specialists.

Date Posted: 4/11/2009 8:03 PM ET
Member Since: 8/23/2007
Posts: 26,510
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Sounds to me likes some of their problems are similar to what the auto companies are dealing with (though not with the outrageous bonus and executive pay).  But the union employees that are guaranteed a certain pay even if there is no work for them to do-that kind of thing.

I have to confess that I too am an emailer, phone caller and online bill payer.  I haven't ordered new checks in more than 10yrs.  My checks still have 3 addresses ago on them.  I also sent out very few Christmas cards this year.  I do try to use 1st class as often as I can when mailing out books though even if it's a bit more.



Last Edited on: 4/11/09 8:07 PM ET - Total times edited: 1
Date Posted: 4/13/2009 12:14 AM ET
Member Since: 1/1/2009
Posts: 1,924
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 Thank you Kevin and others who have shared info here on this.

 I do wonder about a few things, though I do not doubt they are losing money each year.

 Yes first class mail has gone down thanks to the internet but also thanks to the internet hasn't packages being mailed because of people buying on the internet gone up? Or are they using UPS more and how is UPS functioning better than USPS? Would they not be in the red too by now?

Date Posted: 4/13/2009 9:43 AM ET
Member Since: 2/19/2008
Posts: 2,007
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Ah, but look at the price difference between USPS and UPS Kim, then remember that UPS doesn't have any service that compares with First Class Mail, nor do they go to every address in the country 6 days a week.

Subject: Guess who delivers "The Last Mile" on many UPS packages?
Date Posted: 4/13/2009 12:00 PM ET
Member Since: 5/19/2008
Posts: 562
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That would be the good ole USPS.

"The Last Mile" is what we call it when the UPS contracts out to the USPS for those deliveries so far out in the sticks that the UPS doesn't want  to deliver.

Date Posted: 4/14/2009 5:59 PM ET
Member Since: 8/23/2007
Posts: 26,510
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My MIL has one of those houses.  She's had problems getting things delivered by UPS.  The Post office won't delvier to her house either. She has to have a PO box. 

I had to meet a Fed Ex guy somewhere once.  They drove my my house and refused to come down my drive-way. I have a long narrow driveway, lined with trees and they came in this humongous moving size truck.  They called me and I had to drive to a nearby street.