Saturday, August 8, 2009

The US Postal Service is Losing Lots of Money

I read an article by Joe Nocera in today's Times about the US Postal Service. The USPS is on pace to lose $7 billion this year, after losing $5 billion in 2007 and $2.4 billion in 2008.

The peak year for mail was 2006 (210 billion pieces); this year the prediction is 175 billion pieces. Reasons for the USPS's financial problems, according to Nocera:
  1. Extremely generous compensation packages
  2. More than 2,000 post offices serve fewer than 100 people each - as Nocera explains, shutting down a post office is nearly impossible because of the political pressure that's brought to bear
  3. Actually -- now that I've gone back and re-read the article -- these are the only two issues to which Nocera cites. He does not mention prices -- wouldn't part of the problem be that the USPS does not charge enough for its services?
John E. Potter is the Postmaster General and has been for the last nine years, and Nocera points out that he's actually received praise for his job performance, not least after 9/11 and the anthrax attacks.

276. Nocera says that the USPS is the second-largest employer in the USA!! Who's #1 and who's #3? Is the federal government #1?

277. I'm still confused about the relationship between the USPS and the federal government, and Nocera's article doesn't clear things up. He says that in 1970, the Postal Service "stopped being a government department and started becoming self-sufficient," but he points out that it is still subject to Congressional oversight (thus, the difficulty of shutting down local offices). Does the USPS get any funding from the feds?

278. How much of a price break do companies get when they send mail at bulk rate? Is reform of the bulk rate system an idea that's being discussed to address the USPS's budget problems?

279. What's the most pieces of mail a private person / household gets in one day or over the course of one year? Are there people who get 40/50/60 pieces of mail in an average day?

280. What's the longest personal letter that's ever been hand-written and delivered by US Mail? 100 pages? 500?

281. What's the job selection process like for Postal Service employees? I'd think that during the recession there must be tons of people applying for each job opening at the USPS.

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