Congress fucked over the USPS’ funding so of course the USPS will latch at Bezos’ teat. Adequate funding and salaries is an essential protection against corruption.
This is fine with me. Most of the mail I get from the USPS is junk, and the rest is from Amazon and Ebay. I'd prefer to get what I want faster than the junk.
If they were as good as Amazon I would buy from them, but they aren't, so I don't.
This is just the USPS giving service to what people care about most. They have no obligation to treat all sources of mail equally.
Non-Amazon retailers are of course free to pay for better service, and if they can't afford it, then they don't deserve it. If they were as good as Amazon they could afford it, as a result of customers paying for what they want.
Among other things, it says that the USPS must prioritize expeditious delivery of "important letter mail". This has usually been interpreted to mean that traditional postal service – first-class letter envelopes – must have top priority, above things like package delivery, contracted last-mile Amazon delivery, etc.
The linked text clearly states that the Post Office cannot do what it is currently doing.
> It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities.
Prompt, reliable and efficient services does not including refusing to deliver priority, directly-paid-for mail on its routes and instead prioritizing other mail based on a political decision from the top ranks.
The law says that the USPS needs to provide services to all communities. It does not say all packages need to be treated equally. Show me where it says that.
> Prompt, reliable and efficient services does not including refusing to deliver priority, directly-paid-for mail on its routes and instead prioritizing other mail based on a political decision from the top ranks.
That isn't what the statute says. That's your own opinion. Show me where the statute says that.
> In determining all policies for postal services, the Postal Service shall give the highest consideration to the requirement for the most expeditious collection, transportation, and delivery of important letter mail. [1]
...but it also doesn’t seem binding. There’s enough wiggle-room in that language for important letter mail to not always be prioritised, and of course one could argue about what constitutes important letter mail, versus less important letter mail.
(Is it reasonable to assume that where there is such an amount of wiggle room in such a high level policy, it was intentional, and also intended that the wiggle room should be explored? Or is this just the impact of vested interests?)
I could totally wait an extra day for those things...
It's stuff I have ordered that is the real priority. Terms and conditions changes from my bank I know the law requires them to send me, but I don't really care how long it takes to arrive.
> According to letter carriers in Portland, it’s medications, paychecks and other first-class mail that’s getting left in the office overnight. They say Amazon packages are taking priority at the order of the postmaster and other supervisors in the building.
Medications and paychecks needed by other people are being held up intentionally to make way for Amazon packages. This isn't right, it isn't okay with me, and it shouldn't be okay with you either. Compassion for other humans and their need for paychecks and medicine should absolutely factor into a person's opinion on mail priority. IMO.
What isn't right is people falling for sensationalist bullshit headlines just because the headlines happen to match their current outrage manufactured by populist politicians/media
Hmm my local postal office never deliver large Amazon package, they just “attempted delivery at 9am but nobody is home”, then come and leave a note later in the mailbox.
Additionally, the USPS is incentivized to do this because they’re underfunded. Amazon has money, so they’re forced to do business with who can help pay the bills.
I mean, that's certainly one way to make sure you can't vote by mail!
But is this not a case of an underfunded agency, that is trying to do its best in a bad time, with no money, and trying to placate those who shout loudest?
I'd wager that packages (not just Amazon) make up a lot more post than actual letters nowadays - I know I rarely have any post (although UK) as everything is online - but if people aren't getting their next/same day delivery on time, then they kick off and shout about it - which isn't going to please Amazon, and the USPS don't/can't lose that contract
Why do postal services even need to be handled by an agency?
It's just a normal service like any other. Normal companies do that just fine. As evidenced in lots of history and in other countries around the globe.
Sometimes it's okay to recognize something is a social good. Large swathes of the rural population of the US would be underserved/overcharged (in regards to current levels) for similar levels of service.
Is that because there's cross-subsidy from non-rural folks or because you think USPS is more efficient than a private sector alternative would be?
Also, even if we accept that the government doing mail delivery is good, why does it need to be a federal agency? Wouldn't this more logically be something for the states to do?
It's less a matter of efficiency and more a matter of whether service would exist at all. If serving small rural communities isn't profitable, why would a company like UPS or FedEx choose to do it? You'd need to compel them with regulation, they aren't charities.
If each state did postal service piecemeal you'd have all sorts of nightmare state-specific pricing, size regulations, delivery schedules, etc. Nobody would benefit from that. Each state would also have to bargain individually with foreign nations about international shipping.
> It's less a matter of efficiency and more a matter of whether service would exist at all. If serving small rural communities isn't profitable, why would a company like UPS or FedEx choose to do it? You'd need to compel them with regulation, they aren't charities.
To an extent, companies would charge higher prices for performing services that cost more.
> If each state did postal service piecemeal you'd have all sorts of nightmare state-specific pricing, size regulations, delivery schedules, etc. Nobody would benefit from that. Each state would also have to bargain individually with foreign nations about international shipping.
Why? They could still subscribe to common standards. Just like different paper mills still produce standard sized paper.
Similar for international shipping. Though individual bargaining might be an advantage, too.
> To an extent, companies would charge higher prices for performing services that cost more.
Out of interest what’s your opinion on roads? City dwellers almost certainly subsidise the construction of roads they may never need to use, and the US doesn’t pull toll gates on their roads to makes sure they’re charging higher prices for services that cost more.
Any American (or indeed anyone in the US) can use any road for free, as much as they want, for only the cost of their taxes. Assuming they even paid any.
Same as for postal service. Privatize the roads as well.
Especially with modern technology for collecting tolls, privatised roads are more feasible than ever.
In practice, I would expect roads to be financed by a mixture of pay-for-use and local businesses.
Even without privatized roads, it can be useful to charge road users. Here in Singapore we have Electronic Road Pricing in some parts of the city to keep congestion down. See https://en.wikipedia.org/wiki/Electronic_Road_Pricing
None of that addresses how you build the road in the first place without government assistance (or expand existing roads). Private companies can’t compel property owners to sell land.
You need to look a little more carefully into the history of railroads in Great Britain. An act of parliament was required to build most of them. And they approved the routes over the objections of local landowners. In fact many local landowners hired thugs to harass the surveyors and builders.
Without government power forcing the sale of land none of those early railroads would have been built.
The same thing applies to canal building in the 18th century. Government authority was used to force landowners to allow canals to be built.
Again with turnpike trusts, acts of parliament were required to establish each one, and they were generally financed by community bonds.
There has never been a history of private entities building a large, road or rail network through land owned by many different private owners without using the power of government to force the landowners to cooperate.
So the government creates a natural monopoly for the shortest route from A to B, and then hands it off to a private entity to run it.
What's the mechanism in place to prevent the private road owner from charging far more than the maintenance costs of the road? The government steps in confiscates more private land to build additional less efficient routes that they refuse to sell to existing management companies to allow for some amount of competition? The government creates regulatory bodies to oversee the private road management companies and ensure they don't charge too much? The government regularly accepts bids from different companies to handle management, and somehow manages to keep this bidding process corruption free, there are no problems from regularly handing off control to different companies, and the transaction costs for switching companies don't overwhelm the savings?
The free market depends on competition to work, but with roads built through eminent domain, competition must be artificially engineered. At some point direct government ownership is the most efficient solution.
> What's the mechanism in place to prevent the private road owner from charging far more than the maintenance costs of the road?
Freedom of people to move their place of residence and business, and long term contracts.
Basically people don't move house willy-nilly, but when they move house they can take considerations like roads and railroads etc into account. That's what they do today, too.
Long term contracts assure that your decision will be valid for as long as you like to negotiate.
No need for all the regulation you envision here.
---
However, I do agree to an extent: private companies are not a panacea by themselves. As you can see with the sorry state of eg American banking (especially historically when branch banking was banned) or in their healthcare system or what I hear about residential internet access.
What is more important is genuine competition.
Alas, adding lots and lots of layers of regulation seldom works. You just get regulatory capture instead.
In that case, you might make an argument that outright government ownership doesn't look too bad in comparison. Especially if you can have very local levels of government be responsible. Eg municipal waterworks seem to work reasonably well around the world. See eg https://en.wikipedia.org/wiki/Sewer_Socialism
What often works better is deliberately decreasing barriers to entry. Be that from foreign competition, local upstarts, or established firms branching out into other industries. (Eg Walmart tried to allow people to open bank accounts. You can guess at the lobbying storm from incumbents that caused.)
Another good measure, but extremely unpopular in practice is to make sure your regulations are as simple as possible. For example, when you have decided to privatize some government agency, say like USPS or Amtrak, you should remove all the debts from its balance sheet and then sell it strictly to the highest bidder.
In practice, that never happens. In practice, there will be a beauty contest with lots of complicated rules (eg about preserving jobs etc). Those rules give the adjudicating officials lots of leeway to decide, and thus power.
Invariably, the buyer will later on renege on their promises.
That's much harder if you just hold an auction in terms of cold, hard cash.
(I'm parroting the suggestions of 'Just Get Out of the Way' https://www.bookdepository.com/Just-Get-Out-Way-Robert-E-And... here. The wisdom of removal of debt from the balance sheet before selling wasn't obvious to me for a while: the idea is that any dollar of debt left on the balance sheet would decrease the sales price by roughly a dollar, but if the newly privatized company goes belly up, it would be politically impossible to avoid a bailout of the debt that existed before the privatization.
In practice we'd expect the new owner to add debt back on the balance sheet shortly after the sale. But that new debt will be politically much less charged.)
>Basically people don't move house willy-nilly, but when they move house they can take considerations like roads and railroads etc into account.
Locations aren't fungible and the kinds of long term population movements your taking about take decades. People, including those running the companies that manage the roads are terrible at working on those kinds of time scales.
I can guarantee you, that you would end up with companies extracting the maximum possible rent today without worrying about the effect on the long term population effects of the area. The CEO of roadco isn't going to care that raising the road tolls will depopulate a community in 30 years.
I don't want to live in a world where the health of a community depends on the long term thinking of an unelected private corporation, where the only recourse I have is to uproot my family and move somewhere else.
>What often works better is deliberately decreasing barriers to entry.
That's the problem with roads. The barriers to entry are far too high to allow new competitors to easily enter a market, and the only way to make them low enough to foster serious competition requires allowing private companies to seize even more private property.
>Long term contracts assure that your decision will be valid for as long as you like to negotiate.
There's no reason for a company with a monopoly on the shortest route between 2 desirable places to enter into a long term contract. Call up Comcast and tell them you want to pay $60 a month for the next 10 years. They'd laugh at you because they have no reason to negotiate with individuals. Even if it was possible, you'd need to anticipate which routes you'd take and where in town you'd like to work for the next x years, so that you could negotiate with dozens of different road management companies.
Even if you're talking about long term group rates where a municipality negotiates with the management company, who's going to hold a company to the contract. They'll do what every government contractor today does and lowball the estimate. Then when they say they have to raise prices, if you try to hold them to it, they'll just end up in bankruptcy court.
What's to stop regional and even national monopolies from forming who own all the roads in an area? Barrier to entry is extremely high, so there's no natural force to prevent this?
Seriously I used to be a libertarian bordering on ancap, I know all these arguments, and I know the lure of having a single unified ideological framework that solves all problems. The free market, and the non-aggression principal ain't it. There are too many places where the free market ends up in a local optimum.
> Is that because there's cross-subsidy from non-rural folks
This is how a lot of subsidies work in the US. City-dwellers subsidize rural communities.
> you think USPS is more efficient than a private sector alternative would be?
Likely any cost savings non-rural people would see is at the cost of pensions, employee benefits, or other potential stones-to-be-bled. If USPS is privatized, these things will be strangled to death.
> Wouldn't this more logically be something for the states to do?
No, I don't think so. This is just a backdoor to make privatization easier: whenever some state either mismanages their postal service or simply can't keep it afloat, we'll be at the cutting block again. Furthermore, there's obvious potential efficiencies an interstate mail network has compared to a state-level mail network. The "decentralization" here just necessitates more communication overhead, potentially different laws requiring re-sorting, and a bunch of other potential headaches.
> This is how a lot of subsidies work in the US. City-dwellers subsidize rural communities.
OK. Seems a bit inefficient and arbitrary.
I can sort-of get behind transfers from rich people to poor people. That's fine. But why subsidies people for being hillbillies?
> Likely any cost savings non-rural people would see is at the cost of pensions, employee benefits, or other potential stones-to-be-bled. If USPS is privatized, these things will be strangled to death.
Sounds like a good thing?
> No, I don't think so. This is just a backdoor to make privatization easier:
Yes, that's a benefit.
> Furthermore, there's obvious potential efficiencies an interstate mail network has compared to a state-level mail network.
You would obviously allow the state level agencies to compete out-of-state.
I'm sorry, but it's hard to determine if you're arguing in good faith or not. The message right before this you stated that you're perfectly fine with privatizing pensions, cutting union contracts, etc, but now you claim you care about not punishing people. Furthermore, you claim to be against wealth transfers upwards, but this privatization would do exactly that.
You need to sit down and actually think about the policy results of what you're advocating for because you seem entirely confused.
Just handle postal services like eg Germany. They privatised Deutsche Post and abolished the monopoly. Other European countries did similar. Germany is hardly the land of unbridled capitalism. But even they saw the light.
In general the European policies are far from perfect, but they show that the American arguments for nationalised mail are bogus.
> The message right before this you stated that you're perfectly fine with privatizing pensions, cutting union contracts, etc, but now you claim you care about not punishing people. Furthermore, you claim to be against wealth transfers upwards, but this privatization would do exactly that.
What makes you think so? I'm for a level playing field. Government employees should get the same options for pensions as the rest of the population. The best option to help workers is a vibrant job market. Unions mostly just protect the insiders, like union functionaries are just in general people who already have a job.
> because you think USPS is more efficient than a private sector alternative would be?
What makes you think USPS is inefficient? If it wasn’t for the ludicrous pension constraints applied to them of funding all pensions out to 2056 upfront, a requirement that no other federal agency or private company has. USPS would be returning almost a billion dollars of profit every year.
I would call that pretty good going for a public service.
Surprising though it may seem, with some limited exceptions, it's illegal for a private party to deliver a letter to another private party without paying the US Postal Service.
The "monopoly" is the right to put stuff into your USPS mailbox. A lot of apartment communities have package lockers where private carriers can put stuff. And homeowners are used to receiving packages on their porches - so it's no big deal if letters are left there too. So that monopoly doesn't seem like much of an advantage in today's world.
Yes. But not the question becomes, why would it be a good idea to have such a clause in a constitution?
Edit: I just had a look. The clause only seems to talk about the power, not the obligation to run a postal service.
In fact, 'An early controversy was whether Congress had the power to actually build post roads and post offices, or merely designate which lands and roads were to be used for this purpose, [...]'.
Regardless of if it was a good idea they would need a large margin in order to pass the ammendment and given the rural statea it would be DOA from them alone, even those who might support it likely wouldn't consider it an important issue. There are /
way more important questions left unresolved in the constitution's text. I am all for at least planning a set od constitutional modernization proposals and mass vote while dreading what sorts of messed up things they would try to put in there and get passed. Especially if logical viability was a requirement.
I don't think you'd need to change the constitution.
As far as I can tell the constitution only gives congress the power to interfere in mail, it doesn't impose an obligation to do so.
> Section 8
> 1: The Congress shall have Power To [...] To establish Post Offices and post Roads;
Similar to how the same section gives Congress the right to borrow or to impose tariffs and excise duties, but I don't think anyone would construe that as an obligation to borrow or a ban on free trading.
I don't think there was any constitutional crisis when the national debt reached 0 during the Andrew Jackson administration?
Yeah, it is spending a little more for those rural customers due to additional distance traveled. However, the have been using flat-rate shipping within the US for a long time, so they know the price they need to maintain. Postage is still 55 cents for most letters in the US, which doesn’t seem particularly bad. UK has ~80 cents a stamp as the cheapest I found. Germany was praised elsewhere in the thread and has stamps at ~90 cents a letter.
So yeah, based on how cheap it is to send mail in the US, and the fact that USPS would be profitable venture if they weren’t screwed over by horrible laws (pension prefunding, etc.), the USPS is very efficient and shouldn’t be parceled out to states.
Cheap food is a social good. It would be catastrophic if food prices were high. Private enterprise handles food just fine despite substantial logistic challenges. In Australia we had a stern-faced inquiry into why the prices of milk were so low; it was hilarious to watch politicians trying to complain without suggesting anything so radical as raising prices.
The second part of your post is a fine argument and I'm not complaining about that, but "it's okay to recognize something is a social good" is not fine. It is likely everybody in this thread thinks a cheap, great logistic system is desirable. No impugning of motives, thank you very much.
Population density: 240 per Km2 (Germany) vs 40.015/km2 (Contiguous U.S.)
While there are no doubt significant benefits for the U.S. to attain looking at models for how other countries handle the distributive logistics of various industries, I would argue that the vastly different population densities of the two nations should be assumed to be material, unless and until robust arguments with strong evidence show otherwise.
>According to research conducted by Tulane University in 2009, 2.3 million Americans lived more than one mile away from a super market and did not own a car.
There are billions of dollars in Government subsidies sprinkled all throughout the food production and distribution system.
There are food stamps and government grants to private charities charities. And there people who donate millions of hours to food distribution to the poor and vulnerable.
Private businesses do not handle food distribution just fine.
> It is likely everybody in this thread thinks a cheap, great logistic system is desirable.
The guy I responded to later advocated for privatization of roads.
I'm perfectly fine with impugning the motives of a person who has arrived at that being a sane policy decision. Before that? I'm perfectly fine with impugning the motives of a person who believes it's okay to privatize the means of voting for an entire state.
> Private enterprise handles food just fine despite substantial logistic challenges.
I don't know about Australia, but in the US food is propped up by massive taxpayer subsidy and relies on an undocumented immigrant workforce paid low wages with no recourse against employer abuse.
I can't speak for other countries, but the US Postal Service has a mandate to provide mail services to every single resident in the US - "Universal Service". You can see some info on that here: https://about.usps.com/universal-postal-service/usps-uso-exe...
Essentially, a private company has the option to not provide certain services to you or even decline to serve you at your address entirely. The USPS does not. In many cases a carrier like UPS or FedEx hands things off to the USPS to do last-mile delivery in an area their delivery network doesn't cover, because the USPS is already built out to handle it.
Normal companies cannot do this "just fine" because it's a money-losing proposition. That's why the postal service has to be an agency instead of a for-profit company traded on stock exchanges, it is necessary to have universal service even if the country loses money doing it. Essential things like vote-by-mail, mail-order pharmacies, etc become impossible without it.
Food is a different matter in many ways that don't make it a good point of comparison with the USPS. For example:
Many foods and ingredients can be stocked up on intermittently - say, once a week - and will last for a good amount of time in the fridge or freezer. So you can take a trip to a grocery store or other distribution facility a few times a month, even if it's far from you. You can also pretty safely and legally have a friend pick up groceries for you if you don't have a car or are unable to leave the house, but having someone go deal with your mail would be considerably more difficult (for legal reasons and otherwise).
Lots of mail is time sensitive - even if that ballot you're being mailed won't melt in the distribution center like a neglected package of chocolates would, there's a fixed deadline for you to fill out the ballot and a fixed deadline for it to make it to the processing facility. If delivery of that ballot - or the pick-up and return delivery - is delayed, it's worthless. As such, daily mail delivery is essential in many ways even if people don't receive mail every day. Incidentally, we've had widespread issues with ballot delivery and postmarking in the last year or so, so it's a real problem and not a hypothetical.
On that note, the government has to send mail to every citizen multiple times a year, they're going to have to pay private mailing services for it anyway... How much taxpayer money is actually being saved by privatizing it?
I'm not quite sure I get your argument about why dealing with other people's mail would be difficult? Using the post office's services is exactly 'other people dealing with your mail'.
(If there are any special laws that give the post office more rights than you can voluntarily give your friend or a business, those laws ought to be amended.)
You have an argument about time sensitivity. But I don't understand how you arrive at the frequency of daily? Why not weekly? Why not hourly?
For voting, weekly or even monthly would surely be enough. Election dates are known far enough in advance. Any additional time pressure is purely there by legislative fiat. (And we also already assume that people who vote in person can find their way to the polling station on their own. We don't argue for a government rickshaw to cart them there.)
> On that note, the government has to send mail to every citizen multiple times a year, they're going to have to pay private mailing services for it anyway... How much taxpayer money is actually being saved by privatizing it?
A few times a year is much less than the total volume of mail.
I was going to type out some philosophical arguments about hypotheticals and counterfactuals here. But no need for that. We can just look at the impact of postal privatisations in eg Europe.
In any case, what I'm arguing for would be a level playing field and the absence of political pressure.
See eg the whole argument about how 'the evil party has decreed that money must be set aside for known future obligations, and that is bad'. You only get that because the whole thing is politicized.
I'd say to abolish the universal service obligation and the postal monopoly. Let all providers compete on a level playing field.
The one thing not discussed is how does one hold third party providers to any standard. Right now, Fedex Ground is basically contractors 10 layers deep. They have no incentive to deliver anything correctly but bumrush packages out.
When it comes to legal mail it's a huge disaster waiting to happen if Fedex was supposed to deliver a jury summons and the delivery guy being paid dirt just chucked it out and now you are in jail on a bench warrant. Sure they'll just slap Fedex with a fine and you got unemployed in the mean time.
The other issue is security. Many apartment complexes and even neighborhoods nowadays have locked central mailrooms but they provide a key for a USPS worker to enter. Those keys are tied to a keychain for the route. Are buildings and individuals now supposed to give out keys to every fly by night contractor in existence that changes every day?
> The one thing not discussed is how does one hold third party providers to any standard.
Make them post a bond, if they want to do business with you. If your business is sufficiently important (like perhaps government letters might be), they'll post the bond.
How is your example with the jury summons different in the USPS world? How does the FedEx guy differ from the USPS guy?
> Are buildings and individuals now supposed to give out keys to every fly by night contractor in existence that changes every day?
No, why? The situation is basically the same that we already have for packages or very urgent mail. Look at what solutions are employed there.
In practice, you'd provide access to some trusted providers. A new market entrant would have to negotiate access, or arrange last mile services with an existing provider, or refuse to deliver to those areas etc.
> In economics, a public good (also known as a social good or collective good) is a good that is both non-excludable and non-rivalrous, in that individuals cannot be excluded from use or could benefit from without paying for it, and where use by one individual does not reduce availability to others or the good can be used simultaneously by more than one person.
Basically, defense of the realm is commonly seen as such a public good.
However, food and postal services are excludable and rivalrous.
Delivery of mail is not a public good by the economics definition used in the Wikipedia article:
(1) A provider of postal services can exclude you from either sending or receiving mail. (Excludable)
(2) There's only a limited capacity to send mail at any given time. The postman can only carry so much. (Rivalrous)
(Of course, sustained high demand for mail delivery services can lead to an expansion of supply, ie they can higher more mail man. Just like sustained high demand for bread means more bakeries will produce more bread.)
That postal services charge the sender rather the receiver is mostly incidental and not important for the distinction. They could just as well charge you for receiving mail. Similar to how people in the US seem to pay for receiving calls on their cell phones (I heard).
Your own logic is falling apart as you used the example of military as a public good (which it is). However, it doesn't pass your test.
(1) The military can main it's own people, excluding them from receiving protection. They can also choose not to enter an engagement, leaving US citizens behind. (Excludable)
(2) There's only limited military at any given time. If every other country in the world started attacking the US, we would reach our limit to protect everyone. Probably why the uber-wealthy have private security forces and private islands. (Rivalrous)
You are somewhat right. Those very arguments are brought up on the Wikipedia page:
> Some question whether defense is a public good. Murray Rothbard argues:
>> "'national defense' is surely not an absolute good with only one unit of supply. It consists of specific resources committed in certain definite and concrete ways—and these resources are necessarily scarce. A ring of defense bases around New York, for example, cuts down the amount possibly available around San Francisco."[14]
> Jeffrey Rogers Hummel and Don Lavoie note,
>> "Americans in Alaska and Hawaii could very easily be excluded from the U.S. government's defense perimeter, and doing so might enhance the military value of at least conventional U.S. forces to Americans in the other forty-eight states. But, in general, an additional ICBM in the U.S. arsenal can simultaneously protect everyone within the country without diminishing its services".[15]
Basically, 'public goods' are an important concept, because standard economics suggests that anything that's not a 'public good' can be better provisioned by private, profit seeking actors.
The argument we just brought might suggest that we should privatize the military as well. I did not want to make that argument here, but it's perfectly cromulent.
In practice, how much a given good is a public good is a matter of degree and context.
In most context bread is less of a public good than defense.
But with sufficient effort, you can exclude people living in the same country from defense. Whereas there's little effort required to exclude people from eating your bread.
Similarly to make eg the benefits of nuclear deterrence rivalrous, you need lots of effort or extreme scenarios.
If you have a good or service with a large fixed cost, but a low variable cost, you can discuss about how much it makes sense to treat it as a public vs private good. For example, software or intellectual property in general has almost 0 variable costs, but copyright is a legal invention to make software excludable.
Networks are in-between: the postal service or the phone service or even buses or planes on a schedule have large fixed costs, but when below saturation, they have low variable costs.
I suggest we treat the postal service like we treat buses and planes.
> It's just a normal service like any other. Normal companies do that just fine.
No, they don't. Like others have mentioned USPS delivers to anyone in the extended U.S. with sane prices. They also provide sane international shipping prices. USPS also provides other services like free shipping materials and free pickup. Hiding these and the other services they provide behind companies who only care about the bottom line would hurt people who couldn't afford the services or simply have services they're used to dropped.
If you want to help people, it's more efficient to use a program that's financed by progressive taxes and targeted at the poor and needy.
Instead of a hodge-podge that's financed by city dwellers who need to send a lot of letters, and assists people who chose to live in the middle of nowhere even if they are filthy rich.
Yes, charging more to people who cause more costs would be exactly the point.
(The poor people could use the targeted help I talked about to afford the higher price. Or they could use that help to buy something they need more than sending letters. Like food or nice clothing for an interview etc. Or whatever they fancy.)
There’s a wonderful irony in your suggestion. The current one-price-to-anywhere postal system originated because it is/was cheaper to provide a single flat price, than to compute a bespoke price for every letter dependant on its destination.
Most original postal systems (and I’m primarily thinking of Royal Mail) started by charging depending on distance a letter would travel.
I’m not sure your system of progressive taxes and rebates, and the needed administrative infrastructure would be cheaper than operating a flat price system. Especially in a country like the US which doesn’t have a large well developed welfare system that already performs these types of assessments.
The London Penny Post only delivered in London. You can’t really compare it USPS or Royal Mail that deliver to every nook-and-cranny of an entire country, regardless of how wet, dry or frozen over said nook-and-cranny maybe.
> The US already has progressive income taxes and a welfare system.
The current pandemic is demonstrating how woefully under-equipped that system is, I don’t think your proposed expansion would help much.
I’m a little confused, what point are you trying to make with the London Penny Post?
It supports the ideas of flat pricing, something you said you don’t support. It also not even close to the first postal company, Royal Mail was incorporated almost a hundred years before.
I said I am against making flat pricing or universal coverage a legal requirement.
I'm not against any company implementing a flat pricing scheme or universal coverage.
> It also not even close to the first postal company, Royal Mail was incorporated almost a hundred years before.
The London Penny Post was an important early innovator, and privately owned.
"The new Penny Post was influential in establishing a model system and pattern for the various Provincial English Penny Posts in the years that followed. It was the first postal system to use hand-stamps to postmark the mail to indicate the place and time of the mailing and that its postage had been prepaid. The success of the Penny Post would also threaten the interests of the Duke of York who profited directly from the existing general post office. It also compromised the business interests of porters and private couriers."
"Before the emergence of the Penny Post the profits of the existing General Post Office were assigned by Parliament in 1663 to the Duke of York, who now had similar designs on Dockwra's lucrative Penny Post. As the Penny Post proved to be a great success and a potential new source of constant revenue the English government and the Duke of York at the time fined Dockwra £100 for contempt, claiming it infringed the monopoly of the General Post Office, and took control of the Penny Post's operations in 1682, bringing that enterprise to an end.[3] Less than a month later the London Penny Post was made a branch of the General Post Office. For compensation of his losses Dockwra obtained a pension of £500 a year after the Revolution of 1688."
The Penny Post successfully competed with the Royal Mail. And then the government took over the cash cow.
Universal mail delivery isn't just about helping the poor and needy. It's also about allowing the government to deliver services efficiently.
The government has an obligation to send every citizen voter registration cards, census forms, driving licenses, tax forms, firearms registration forms, passports and so on.
The alternatives - an IRS office in every backwater town, denying a vote to people living in remote areas, ATF agents delivering gun permits in person, denying driving licenses to people without a home internet connection - would either be more expensive, or less constitutional.
Unless UPS or FedEx wanted to take on a universal service obligation, of course...
The German government manages to send those forms out just fine, despite them privatising Deutsche Post and eventually abolishing their letter monopoly.
Deutsche Post has flat-rate pricing within Germany - unlike your proposal that mail to and from remote locations should cost more. So I'm not sure how that example supports your argument?
What they decide is to not service large areas of the country. This also happens with internet service. Without government enforced rate setting and subsidies, rural areas would have very expensive roads, water, electricity, and phone service - even unaffordable.
Deutsche Post / DHL service quality has absolutely declined as a result of this and keeps getting worse so I don't know what argument you are trying to make.
You could procure the government postal service to a private contractor at the start of each presidential election, for the entirety of that presidential term /s
>The alternatives - an IRS office in every backwater town, denying a vote to people living in remote areas, ATF agents delivering gun permits in person, denying driving licenses to people without a home internet connection - would either be more expensive, or less constitutional.
That's not the alternative. The alternative is that they pay a private delivery company to deliver it and/or the recipient will have to come to town to pick it up.
You are making points that seem relevant but aren’t. We don’t want a market normalized mail shipping price, we want a reasonable enough price that allows every single resident to send and receive mail.
It’s far more important that the lowest income residents can send and receive mail.
Also, the same people who want to privatize USPS are the ones who don’t want subsidies or payments to the poor at all. Killing this would be done in exchange for nothing, not as part of a reform bill that targets help toward those that need it.
Just give the lowest income residents some money. They can use that to purchase mail delivery services on the market. (Or purchase other things they might like better.)
How would it help to throw away the benefit of the scale of USPS while driving FedEx & UPS prices through the roof? Would this come with a mandate for the duopoly to service every household in the US?
The retail rate for sending a letter via FedEx & UPS is currently over 30 times the retail rate for USPS ($0.55 vs > $20)
Poor comparison. FedEx and UPS cannot ship first class mail. It is literally against the law. The USPS has a monopoly on first class mail, no one else can do it, so you cannot compare costs.
Say the stamp costs double and it now costs a dollar to mail an envelope instead of 50 cents. No one is priced out of mailing a letter, and we are in a better position s the net benefit is better off (total cost is lower than the previous total cost)
Then why postal services in most countries have a monopoly still? If they are so good at what they are doing by all means let it be known on a real market place. Guess what, they will fight tooth and nail so that competition for regular mail does not happen.
I love how people on HN complain about monopolies in tech but find it absolutely OK to have monopolies in other walks of life.
In Japan you have heavy competition for package deliveries and the former National post gets trashed when it comes to reliability and speed vs Sagawa or Yamato.
> USPS delivers to anyone in the extended U.S. with sane prices.
They are able to do this by overcharging for local mail and absurdly undercharging for rural mail. Just another in the never ending list of ways that dense areas subsidize less dense areas.
But the kicker is the less dense areas are the ones who would vote to privatize the USPS. So I say give them what they want.
I'm not angry about either. I am in favor of giving people what they want. Look at who supports the postal service and who doesn't. There will be no downsides for me if the postal service goes away. The people who want it to go away must have considered the downsides and still don't care. Why would I want to get in the way?
There's a difference between insurance and cross subsidies.
Insurance is basically a bet. If I have deep enough pockets and some actuary tables, I can write you a single insurance policy. And I can expect to make money of that single policy on average. (But in the specifics, I might have to pay out.) No need for a group that cross subsidizes each other.
The duopoly of private shippers charge more than 30x for letter delivery within the US (and still substantially more than USPS for most package services) and those prices are surely as low as they are because USPS drives them down.
USPS has a legal monopoly on letter service, save for "extremely urgent material". All private document delivery must therefore be Express-class. It's not reasonable to compare FexEx Express to USPS First Class.
USPS Express and FedEx Overnight for documents are essentially the same price, even though FedEx has a higher standard of service. (Which is not surprising, because FedEx runs the backbone of USPS Express.)
FedEx and UPS parcel prices generally beat USPS above a certain fairly small weight, even at retail prices.
I'm happy to have USPS around, and I do a lot of business with them as they're the better option in certain circumstances, but let's not pretend their pricing is particularly magical.
Are you the only house on that road? I know a rural mail carrier and a large portion of their customers live on dirt roads and they deliver to them. However, they won't deliver packages to your door if you're the only house on the road and it's over a certain distance.
No, there’s plenty of houses on the road. We fall into the “distance” category. We’re 1.1 miles from the end of the pavement.
I believe they use an OR operator in that decision and not an AND. They won’t deliver if you’re the only house on the road OR if you’re over a certain distance from a paved road.
Well, maybe we need a "delivery neutrality law" as well. In Germany it's the same story, DHL treats Amazon packages with utmost care and always delivers them on time, while anything else gets deprioritized. Guess the delivery companies don't have much choice here as Amazon packages make up 20-30 % of their parcel business now (at least in Germany), especially since Amazon is building up their own logistics in larger cities to compete with them.
And Amazon experimented (or is still experimenting) with building a logistics company to no longer depend on DHL. In the past i got sometimes packages delivered by „Amazon Logistics“ employees.
My understanding is that the infrastructure for Amazon Logistics was added to help scale for the weekend Prime deliveries and Christmas/Black Friday season. But I guess just like AWS was born out of Amazon building internal redundancy for scalability of their compute, Amazon Logistics is paving their way towards being more independent with shipping
Do you mean actual Amazon Logistics branded vehicles?
Where I am Amazon seem to use an independent contractor, and they're brilliant. It's always one of a couple of people I recognise, they have a nice van branded as their own company. It's a great service.
I think this is the norm in Canada. I’m getting all of my packages from a third party logistics company. A small local operation. This is in a major central city.
That’s probably because Canada Post is just so terrible and expensive here that it’s worth it.
Amazon uses multiple delivery companies in Germany, including their own Amazon Logistics, Hermes, DHL standard, DHL Express, UPS, Pin AG and Deutsche Post Letter.
It usually depends on the location of the recipient.
Providing a level playing field for non-Amazon sellers is extremely important for the economy. Amazon is approaching monopoly or near-monopoly on many things, and getting preferential treatment from logistics companies will only accelerate that.
What the original OP said about German parcel services was wrong anyway. Even standard DHL packages in Germany are delivered the next day 95% of the cases.
It's just that Amazon pays DHL extra money that they guarantee next day delivery. It's just that Amazon can tell their customers that the shipment will arrive on a certain date.
However, as I said, since 95% of DHL standard packages arrive on the next day in Germany anyway, there is no point trying to scandalize Amazon's prioritized treatment (which they also pay for, btw).
Source: A close family member of mine works at DHL Germany so I have some insight on their business.
The crazy part is that their special Amazon tariffs seem to not really cover costs, so individual package delivery goes up in price instead.
Amazon might make up 20-30% of volume, but they also pay only 20-30% of the normal price for delivery. Which is crazy when you consider that most of the cost for delivery comes from the actual delivery to your door. That doesn't magically scale and get cheaper per unit because Amazon hands over a large amount of packages.
Mail delivery, like many internet services, has very nice economies of scale. Once you are paying the setup cost for someone to go to every door every day, the marginal cost of adding one more package is not high. So USPS can probably offer any particular mail-sender very low rates and justify them with the idea that the revenue exceeds their marginal cost to deliver (though if they offer everyone such low rates they won't be covering their true overall costs).
Like all other "neutrality" laws, this would be fundamentally anti-free-market, anti-consumer-preference, and pretty dumb. The USPS should give people what they want, otherwise the other delivery companies will put the USPS out of business.
If that happens, there will not be any delivery company that is required to bring mail to everyone, no matter where they live. Let's give the USPS the ability to survive so people in rural areas can still get mail.
First of all, any people outside Germany need to know that "DHL" in Germany refers to the regular parcel post of the former German national post. What other countries outside Germany call "DHL" is actually called "DHL Express" in Germany and they are a separate subsidiary of Deutsche Post World Net. They have their own fleet of delivery cars and also local parcel depots.
Secondly, it's important to note that in Germany, Deutsche Post DHL delivers 95% of all packages within Germany on the next day. This means, that your insinuation that non-Amazon packages are not delivered fast is untrue.
And, thirdly, Amazon pays for their packages being prioritized. Amazon calls this delivery service "Amazon Prime", at DHL, these packages are internally called "PRIO" (it's also on the label) and Amazon actually pays for that. Other types of packages include "VIP" which is used for packages with valuable content.
And since Amazon pays your the prioritization of their packages, every other customer can do that as well with DHL guaranteeing that your package gets delivered on the next day.
However, since 95% of all DHL standard packages in Germany are delivered on the next day anyway, most customers aren't using this particular service. There is simply no gain since a standard parcel ("Paket" as compared to the even cheaper "Päckchen") already comes with tracking and insurance up to 500 Euros.
Please keep in mind that in the US, regular packages take 2-3 days which is why choosing priority shipment in the US makes a huge difference as compared to when ordering from Amazon Germany.
The idea of paying for a superior level of service is exactly what net neutrality is supposed to prohibit, so your response just kinda lends credibility to the parent comments analogy.
Service tiers make total sense for mail, even under a "neutral" system. Sometimes people need, for example, guaranteed next day delivery. So, if Amazon wants to pay extra for that service tier like everyone else ... what's the problem?
The real issue is if Amazon gets that service at a discounted rate. They probably do, and I can see arguments for why we wouldn't want them to be able to. But I can't see arguments against service tiers.
Besides, service tiers exist under net neutrality. I can choose to buy a 1Mbps connection, or a 1Gbps connection. The latter gives me a clear advantage. Yet that's allowed under net neutrality because _anyone_ can buy those tiers of service.
Every reason that mail service tiers make sense can be applied to net neutrality too. VOIP, streaming media, multiplayer video games all “need” a much better QoS than say browsing a web page, or downloading a torrent does.
Anybody who wishes to compete with Amazon will also have to pay additional fees to offer an equivalent service, and if high QoS delivery channels become over-subscribed, prices for them will increase. Further discriminating against competition.
> So, if Amazon wants to pay extra for that service tier like everyone else ... what's the problem?
What’s the problem with an ISP creating a seperate QoS tier for people who require it, and charging more for it? It’s exactly the same thing.
> Every reason that mail service tiers make sense can be applied to net neutrality too. VOIP, streaming media, multiplayer video games all “need” a much better QoS than say browsing a web page, or downloading a torrent does.
That's a pretty good argument against net neutrality. It's a bad argument against service tiers for mail.
If net neutrality is supposed to prevent paying for a superior level of service from the provider you directly contract with, somebody should crack down on all the internet providers that offer different bandwidth/priority for different prices.
There’s not an analogue in this instance for the two sides of a network connection; DHL picks up the packages and drops them off. If you want to argue against price discrimination in general, you’re going to need a stronger argument than an analogy to net neutrality.
Not really. It is more akin to paying more monthly for more GB of internet per month or paying more for faster internet.
Net neutrality is supposed to prohibit a company from slowing down a competitor or slowing down things the company disagrees with - so, for example, Comcast shouldn't be slowing down Netflix. For the post office, this would be prioritizing packages from one carrier in the same class of mail over another. Now, there is no saying that the mail is neutral, though, nor that the contracts allow them to be (I really don't know: Maybe they need to prioritize just to keep from having fees that bankrupt them).
And to add to what you said, except bigger packages (things like TVs) for over 2 years most of the normal Amazon packages (could be only in the bigger cities) are going through some Amazon sub-contractors or whatever they call Amazon Logistics.
That's rather harsh. The DHL "PRIO" sevice was explicitly created for Amazon and later opened to other larger customers like Zalando, but it's nothing I can buy as a private person or even small online retailer. I think your 95 % next day delivery rate is actually the value that DHL promises to PRIO customers (https://www.dhl.de/content/dam/images/pdf/GK/dhl-paket-prio-... - they mention up to 97%), as regular parcels don't have a guaranteed delivery time.
So to recap, DHL has created a specific service that it offered exclusively to Amazon (and now a few other retail giants) which prioritizes their packages. I can't buy that service as a regular Joe or small retailer, so my stuff gets deprioritized as compared to Amazon. In my personal experience I have witnessed that many times when sending or receiving packages, as my stuff from Amazon always arrives on time while my own packages take days or (in rare cases) even weeks to get delivered.
> Secondly, it's important to note that in Germany, Deutsche Post DHL delivers 95% of all packages within Germany on the next day.
Maybe DHL claims to have attempted a delivery for 95% of packages within a day (even that does not match my experience, average is more like 2+ business days) but that doesn't mean that the package was delivered or that a delivery was attempted.
I have had DHL claim to attempt delivery while I was home waiting for the package. No one rang the doorbell that day. No, this hasn't been a single occurence. Yes I have complained. No, this hasn't stopped happening.
I have had DHL send back international packages because they supposedly had made one delivery attempt (with no notification left behind) and then given up.
I have had DHL lose packages for months, only delivering after complaints and with no explanation of what had gone wrong.
Every international package I received had detailed online tracking until the moment it reached Germany where all updates stop until the package is delivered (if it is delivered).
DHL stopped making multiple delivery attempts for most packages and instead of stashing the packages at the Postfiliale around the corner they send all undelivered pacakges for the city to one or two places, causing literally hour long queues of people trying to get their stuff (not to mention the wasted time getting there in the first place).
I have had DHL claim a package was dropped of at a Postfiliale only to have the people there not find any records of the package even days later. And worse, they didn't launch an internal investigation but just directed me to the public DHL service hotline which is good for only one thing and that is wasting your time.
DHL / Deutsche Post is complete garbage and badly needs oversight that actually holds them accountable.
Amazon being able to cut deals with the delivery companies themselves seems... fine? Like I'm not in the habit of advocating things be easier for giant corporations, but it's whatever.
However, giving them a better deal than a regular citizen with a nationalized service is just bullshit.
Bulk discounted presorted shipping is a thing for everyone technically - junkmailers have been doing it before before Bezos was born. It is a matter of baked in fixed transaction costs. In addition to sparing the back end sorting costs they would rather get 1 order of 1000 to process than 1000 orders of 1. Most would rather not bother with the overhead of say a 17 cent checkout fee to pay for groceries and just have it baked in the prices.
This is sad and wrong at the same time.
What if instead of postal services, Amazon required water or electricity to function. They would have payed just enough to get some level of priority (without making the water/electricity companies turn any profit, just keeping them barely alive), so when the grids get overloaded (e.g. during summer), you could run out of water/electricity because your neighbors ordered some useless stuff from Amazon.
"We're sorry, you can't turn on your A/C today because your neighbor ordered the new UselessThing, which requires a lot of resources to be delivered. Maybe we'll let you use it tomorrow, unless they order the UselessThing 2.0."
I believe this is something that already happens in certain countries with Coca-Cola bottling plants, where when local droughts happen, the plant is protected over the local population.
Even in the harshest drought, water for human consumption is a trivial amount.
It's usually agriculture (and industry) that's the big consumer. Alas, not many places have functional markets for water, so people can't buy out the farmers' water rights. And it's often use-it-or-lose-it for the farmers.
There's more to this than just your personal consumption: absentee voting is likely to be pretty high this year and the mail system is common amongst the incarcerated to speak with their lawyers and loved ones.
Systems shouldn't be optimized for narrow edge cases, like incarcerated mail or mail in ballots, but for the typical case. The majority of all mail is advertisements and bills. I suspect if you asked people to vote, they'd prefer Amazon packages get priority.
Maybe any other year, but I'm pretty sure that in 2020 most people in the USA would rather have their vote count than get their Amazon packages quickly.
> ...which mandates that the agency pre-fund health benefits for retirees up to 2056.
On it's face that sounds like an incredibly onerous requirement. Not being a US resident though, it's quite possible it makes sense and my ignorance simply can't tell. Could someone with more insight provide additional context here?
I can't watch right now but does he do a decently bipartisan take on it?
At the time the requirement to fund pensions through 2050ish was passed it got support from republicans who wanted to make life financially harder for USPS and democrats who wanted to guarantee that employees (union employees, so making sure they get a good deal is even more important) would be provided for and that USPS couldn't weasel out of it's obligations as part of a future bailout, perhaps by a congress that would have given employees the shaft.
I’m always looking for videos that “debunk” Oliver to make sure I’m getting reasonable information but I never find any. Not sure if this means he’s usually right or not!
I've been following police violence and civil liberties for more than a decade now. I like to think I'm pretty well informed on the issue. His episode on riots didn't say anything wrong but he just kinda laid it all at the feet of the cops for shooting one too many unarmed black people when that's either a red herring or the straw that broke the camels back depending on how cynical you are.
I get that he has to take a complex situation and make it into something a nationwide general audience can laugh at but he seemed to go to great lengths to avoid casting shade at city and state politicians (and by proxy voters) who bear a lot of responsibility here.
He didn't say anything wrong but I was really disappointed how one sided it was. I know he's a comedian. I know he has an agenda. But it makes me suspect his other stuff might be tilted.
No, if you mean the recent one called "Police" you are mistaken. At about 5:00 in he spends 6+ minutes talking about the decisions that put police in this position.
* "Look, clearly, the police are just one part of a larger system of inequality, and for tonight we're going to focus primarily on them"
* Then spends the next few sentences talking about how TV and film have painted an extremely unrealistic picture of police in the US
* The history of policing and the policies we created it based on (slave patrol)
* The Jim Crow laws & segregation that drove policing
* Racist voters that tried to keet regions white
* The media's whitewashing of the civil rights movement
* Nixon & Regan's drug war + broken window policing
* Stop & frisk policy and how more than 3/4 were black / hispanic
* Then the big bomb at 9:05: "And let's be clear here, Democrats were very much involved in that, from big city mayors all the way up to this guy [shows a supercut of Bill Clinton in '93 promising 100k more police on the streets in various speeches, then "another 50k more in high crime neighborhoods"]"
* This all came hand in hand with cutting every social service possible and pushing all of the extra work onto police
* "So, while we should absolutely be angry at the police right now, let's also be angry at the series of choices that left them as essentially the only public resource in some communities"
So he spent around 15-20% of the total time making it incredibly clear that while this is a police problem not a police only problem.
What I'm more interested in knowing is, are his facts wrong? Or maybe is he leaving out an entirely separate side of things that point to the real issue? That's what I always wonder in the back of my mind.
It is a completely dubious provision that loony anti Government Republicans passed to deliberately handicap the Postal Service. No other Public or Private agency has such onerous requirements.
Most of the weirdness comes from government employees having special kinds of pensions (and health benefits).
If they were on a defined contribution plan like most of the rest of the economy, this provision would just mean that they actually need to make contributions on time.
Naively, you might want to keep track only of money that flows in and out of your business.
But that can be rather misleading. So typically account for expenses when they are incurred. That means for example that in your accounting you set aside a bit of money for your rent every day, even if the physical cash only leaves your wallet once a month or even once a year.
That way your accounting reflects the economic reality of your business, even if it doesn't reflect how much cash is in your wallet.
The economic reality is important, because even if you have cash on hand now, but predictably won't earn enough money to pay back a debt that's coming due at the end of the year, you better panic early instead of acting all surprised.
Well, when you promise people a pension dependent on how long they worked for you, it makes sense to make a provision every day they work for you, for the predictable outflow of cash you will have in a few decades.
In the special case of pensions, you might even go one step further: instead of just having a reserve on your books, you might want to ring fence a specific amount of money and put that part of your balance sheet in a separate investment vehicle or fund. So that for example bankruptcy of the parent company wouldn't imperil pensions already promised.
The opposite of having such reserves is called 'unfunded liabilities'. Sounds nasty, doesn't it?
From the Pension Crisis article:
> In addition to states, U.S. cities and municipalities also have pension programs. There are 220 state pension plans and approximately 3,200 locally administered plans. By one measure, the unfunded liabilities for these programs are as high as $574 billion. The term unfunded liability represents the amount of money that would have to be set aside today such that interest and principal would cover the gap between program cash inflows and outflows over a long period of time.
It's part of the republican agenda to destroy all publicly owned infrastructure. They couldn't get the votes to privatize the USPS, so they're just trying to ruin it instead.
I've heard about how terrible this is for a long time, so I just went and checked your first link there, and it says that the cost is about $5.5B per year. It appears that the USPS has about 497K employees[1]. So it seems like that is around $11K per employee per year. That doesn't sound particularly out of line in magnitude.
The rhetoric about paying for the next 50 years sounds like somehow the post office is being charged at more than the amount necessary to maintain a steady state. Is it that they would be paying $5500/year/employee, but they have to pay double that for 50 years?
I'm having a hard time wrapping my head around what exactly is the problem and where the unreasonableness lies. I'm sure a Republican would say that the problem is the amount of benefits, and I can imagine that might be disingenuous, but I don't honestly understand what's really going on despite hearing about it for years and years.
Maybe someone can ELI5 why or how there's a gap between the long run average cost of the retirees and the payments.
The "up front" part I think is what is considered onerous.
Typically you'd target a result in the future and work backwards off of an average return rate (over years/decades, not months!) to ballpark a "this is what we need now to fund (with interest/returns) our pension obligations in the future".
As one can see from many pensions today though, this setup often falls prey to politics or other mismanagement. I think the "other side" sees it as an attempt to say "USPS can't stay solvent, time to chuck it over to the private sector." while ignoring that other comparable businesses do not and will not have such an explicit cash requirement, which by definition makes them looks better.
The usual proximate causes for pension scheme funding gaps are excessively optimistic assumptions about investment growth and mortality, coupled with underfunding.
i.e. you assume your investments will growth faster than they do, and you assume people will die earlier than they do, then you don't even put in enough to fund the scheme based on your optimistic assumptions.
In the US, state pension schemes tend to use more aggressive growth assumptions than private ones: the government holds private companies to strict standards, but does not impose them on itself.
> I'm having a hard time wrapping my head around what exactly is the problem and where the unreasonableness lies. I'm sure a Republican would say that the problem is the amount of benefits,
As far as I know, that is exactly the problem. I don't think any private corporation would be paying $11k per year for each employee for retirement benefits right now. Unless the base salaries are much lower, this is a pretty difficult requirement.
As an aside, I love that this got downvoted here. Do people think most corporations are paying $11k+ each year for each employee for retirement benefits?
I would certainly not bet that they are, but if you imagine an employer that paid a reasonable amount in an ideal world, it could easily be that much. $11K is barely over half the 401k limit and health care for retirees is costly and not particularly visible so I at least have no idea how much that should add but it might be significant.
Two separate questions are - is $11K a reasonable cost in general, and is it reasonable for whatever the USPS actually needs to fund? I think it's obviously a reasonable cost for the sort of benefits that I personally would like, and for the sort of retirement most SWE HN participants expect to be able to fund. It could still be a vastly excessive amount for whatever USPS employees actually will get. The number really means nothing out of context.
It makes sense in the wider context of the republican party generally viewing free universal services as a bad thing - the push to privatize education, the push to eliminate or scale back public health care systems like medicare, the push to scale back public pension systems like social security.
A given politician might have their own reasons for wanting to privatize everything (profit, ideology, etc) but it's pretty consistent across the whole party that they aren't fond of any of these programs - I wouldn't actually attribute this to key donors.
The more reactionary donors have a real generational hatred of civil service in general and the post office in particular. Alot of fringe thinking from the 1960s and 70s is front and center today.
Can you speak a little to why it doesn't make sense? There are multiple responses on this thread where people are asserting that it's obviously wrong. It's not obvious to me - could you provide some more details?
It's part of a long-standing battle of the Republican Party to crack down on unions.
This is a strategy called "Starving the beast". Basically, they impose incredibly harsh financial burdens on the company, and then argue that it's unprofitable.
They have to pre-fund the benefits they already owe employees. It’s perfectly reasonable. Without it, they’d come begging to the feds for money in a couple decades. A private enterprise, on the other hand, would only hurt creditors if it can’t pay a pension.
>It's funded by insurance premiums paid by companies that offer pensions, not by taxes,
It's not much different than the post office itself in that regard. It's losing money every year. At some point congress will step in and bail them out. Any time a company goes bankrupt and forces them to take over pension obligations they lose more money.
That's one of the purposes of the PBGC--to prevent people from losing their pensions when companies have problems. Look at the history of the PBGC and bankruptcy. Companies routinely use bankruptcy to benefit creditors at the expense of the PBGC. Basically creditors get paid, while the PBGC gets stuck footing the bill for pensions.
There is a difference between a company going bankrupt and not able to meet pension obligations and deciding not to fund a pension necessary to meet defined benefits.
If PBGC allowed this then companies could abuse it by promising 200% pensions and then only contributing $1 and defaulting.
Funding defined benefit pensions is very expensive, USPS wants to save money by not funding it in order to pay benefits. I’m not sure their argument other than “we don’t have that much money.” It seems they need to reduce pensions or live with sinking tons into it. Not paying pensions shouldn’t be an option, I think.
>Funding defined benefit pensions is very expensive, USPS wants to save money by not funding it in order to pay benefits. I’m not sure their argument other than “we don’t have that much money.”
This is their argument.
1. They are forced to prefund the retiree medical fund in addition to the pension fund. No private company is forced to do this. If a private company runs out of money for retiree medical, they will just stop paying--the post office can't just stop offering this benefit without an act of Congress.
Additionally the retiree medical fund is forced to invest only in U.S. Treasuries, so the interest rate is much lower than it should be--meaning that they need to invest more money than should be necessary to prefund.
2. They were forced to prefund over a 10 year period. When the law was passed in 1974 that forced private companies to prefund plans that had been pay as you go, they gave them 40 years to do so.
Thanks for the description of their argument. They are different than private companies because government account is different than corporate accounting.
I think the issue I have is that this requirement is correcting a previous practice of not funding properly.
I don’t think it’s accurate to compare USPS vs private companies as they are very different. I think it’s more accurate to compare them to other federal agencies who all also have to prefund pensions, including medical pensions. Although federal agencies have reduced pension and medical in the past decades to reduce costs.
>I think it’s more accurate to compare them to other federal agencies who all also have to prefund pensions, including medical pensions.
Other Federal agencies don't have to finance their own operations, so it makes no sense to compare them to the USPS. In most cases congress just allocated more money to the agency so that pensions could be prefunded.
The closest thing I can think of is if congress had told NASA: "You need to come up with 75 years worth of pensions and health plans within the next 10 years and we weren't going to give you any extra money to do so. Oh and you can't reduce benefits, and you must maintain the exact same level of services. And if you can't do this we are going to sell off your assets and privatize your agency."
If congress had done this it would obviously be because their goal was to privatize NASA. This has never been done to any other agency.
The responses here are full of misinformation. The bill in question was passed with unanimous Bipartisan support And the endorsement of one of the postal employee unions.
The USPS is the largest unionized operation in the USA. Republicans are trying to drive it into crisis and kill it. So they passed a law which requires it to set aside vast amounts of money to prefund retirement obligations on a scale which no other organization in the USA has to do. At the same time, they are refusing to let it raise postage rates or otherwise generate more revenue. And in the news recently (past few weeks), Trump has appointed a new head of the agency who is ordering it to slow down mail delivery.
Goal is to get the public to perceive it as a money-losing, inefficient operation which should be destroyed and outsourced to private companies (who will immediately hugely raise postage rates, reduce letter carrier pay, reduce delivery speed, and so on).
All pension benefits in well-operated schemes are, by definition, pre-funded. You can't have a pay-as-you-go type of system because, if your company went bankrupt tomorrow, you might have retirees that still have a life expectancy in the decades.
You get an actuary to look at your current and future obligations based on your workforce, schedule of entitlements etc. and they work out how much you need to contribute to the scheme today to make sure that it is funded. The idea is that some disaster could befall your company at any time and retirees would not be out of pocket.
This is what pre-funded means. It doesn't mean "when I join the USPS at age 21 they have to assume I'm going to retire with 40 years of service and immediately put aside cash for that".
Now, typically, retiree health benefits are not included in this setup because they're not guaranteed. i.e. there is nothing in the law that requires them to be maintained.
On the other hand, the USPS is required to provide those retiree health benefits. It can't stop paying them unless Congress passes a law. It does at least seem consistent with the treatment of pension benefits on this basis.
The real issue here is the fact that the USPS is overloaded and requires extra government attention. If you don't properly fund and support you public postal service, you don't get on-time mail deliveries. Maybe that is the issue.
This has little to do with Amazon. Amazon is paying the USPS according to their contract. If the contract from 2013 is unsatisfactory, then it should be renegotiated by USPS. I wouldn't be surprised if it is a 10-year deal, and has hefty fines for late deliveries.
A journalist should be able to request the contract and see why USPS is now overloaded: Is it because USPS is not receiving enough funding from the government, or because the contract with Amazon is really bad for USPS. It sounds like the fact that Amazon is shipping so many parcels is a symptom, not the (systemic) cause of why parcels aren't shipped on time.
If the USPS is to blame, then who made this deal and what were their reasons? Was it a national deal? Why is it a problem now? Why wasn't this anticipated? And how can it be avoided in the future?
Aren't contracts of the government with private parties publically accessible? I mean, you, the taxpayer, pay for the contract so you should have access to it, as well be able to check on the government's workings. At least, that's how we do things in europe.
In Australia often contracts between Government and a private-entity are declared commercial-in-confidence to prevent disclosure of information that could affect the private entity. I wouldn't be surprised if this is common in the US as well.
In Australia (and in Canada) the government's post office has been corporatized (in Canada, closer to privatized) in a way which tends to have it set postage such that it covers its own costs. The USPS is complicated in this respect, it is partially corporatized, but it often runs deficits.
Canada Post is still a Crown Corporation, as it has been since it was "corporatized" the early 80's; so "closer to privatized" doesn't really make any sense.
You have to understand the difference between a crown corporation and part of the government. A crown corp has government representives on the board. A crown corp could get funding from the government but it also could act privately and get it from profit. The books are not open the same way (annual review vs always accessible)
I totally understand how Crown Corporations work, please do not accuse me of ignorance here.
There is a massive difference between a Crown Corporation running as a for profit enterprise where any profits return to the Crown and a privately owned company, especially one that was "spun off" and privatized at pennies on the dollar.
Protecting the rates and fines made through a bulk deal as 'affecting private entity' sounds a bit hypocritical as that same deal 'affects' that private entity massively in a positive way for being the only one with that big government-type of deal. Wouldn't you, as a taxpayer, like to know why that private entity got the deal, and how it is affecting society?
In Europe we have this system where public deals above a certain cost are open for everybody. If you meet the requirements best, you win the deal. Problem with this system is that the requirements are rarely written down properly, causing half-baked solutions meeting bare minimums and extra costs to fix them. For example, that is why we Europeans are unable to produce proper governmental IT systems, or buy new trains that won't break down due to cold weather.
If the USPS is getting lots of business, why would they need more funding? The issue here is simply a temporary Coronavirus situation combined with how the USPS runs their business.
It has been a while since I have seen that one, but if I recall the two main points were
1 - Forced to save billions over a short period of time for retirements benefits.
2 - Inability to set their own prices, like a business would.
The extra business from Amazon should have been a massive boon to USPS. But it seems the ridiculously low rate they got into, plus the couple factors above (and I am sure many others - like being required to maintain rural routes at a loss) has put them in a bad situation.
They should just spin off the USPS as a purely private enterprise—no more monopoly on letter delivery or bureaucratic micromanagement regarding prices—and instead periodically solicit bids from all the carriers (including the former USPS) for the core services. Whoever wins the bid would commit to flat-rate nationwide delivery of first-class letters and receive a negotiated subsidy for each delivery depending on the route.
Did you not read the part about how they have to fund their retirees health program up through 2054? That's millions to billions of dollars that they have to set aside for potential future costs decades away. No other government program or service is required to do this.
“ Establishes in the Treasury the Postal Service Retiree Health Benefits Fund, to be administered by OPM. Requires the Postal Service, beginning in 2007, to compute the net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year”
Compute the net present value of future payments does not sound like “accrued” benefits at all. It sounds like future payments which is the opposite of accrued benefits.
I don’t know the details of USPS’s finances, but reading that bill it seems they basically got rid of pensions around 2007
“ Postal Civil Service Retirement and Health Benefits Funding Amendments of 2006 - (Sec. 802) Relieves the Postal Service of an obligation to contribute matching amounts to its employees' civil service retirement.”
but required that all existing pensions be prefunded.
That’s an extremely onerous requirement and whether the fund has been funded or not, it will still affect service drastically. Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now.
> ... net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year
This means you calculate the total amount of added expected additional pension payments earned over the last year of work.
So, if last year you could have retired with a pension estimated to pay out $100k, and this year your pension would be estimated to pay out $120k due to the additional year of service, then that number would be $20k.
Since that $20k is not paid out all at once, but over a period of time in the future, you calculate the net present value which reduces the amount based on a “discount” rate which is the expected rate of return on your cash. So, $20k paid out over 10 years starting 10 years from now is discounted to, e.g. $14k, which is how much money you need invested today to fully fund that liability in the future.
To sum it up, in that hypothetical example, the USPS is supposed to be banking that additional $14k to find the future liability.
It’s actually exactly what anyone running a pension program absolutely should be doing.
The other commenters did will to address your misconceptions but I want to further elaborate on this one.
> Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now
The fund is not paid off as the Post Office never actually made the vast majority of its payments. It's also not in an account waiting to be used. It is being used right now to fund current retirees and it's running deficits. The reason it's a moot point is because even if this requirement were removed today it would operate in the same way i.e. pay as you go.
Maybe all cities and states should have to do this? We have a massive pension crisis in the US. Many cities and states are not even 50% funded. It’s a looming disaster.
Do you not see what it's going to do with the USPS? Why would you want it done with cities and states, unless your goal is to privatize entire cities and states.
The argument here is that it's all shell games otherwise if the money isn't set aside - e.g. look at the broader trend with social security's solvency. With the way public funding has trended, it would not surprise me if any unfunded programs simply ran out of cash at some point.
There isn't an easy answer to balance the needs of existing liabilities (pension commitments) with financial operations - the problem with the USPS was (I believe) the catch-up funding required to meet funding requirements, and not the actual funding itself.
Social Security is insolvent because congress keeps borrowing from the trust fund that we pay into to cover obligations in the general budget. It has nothing to do with shell games. Fundamentally the problem is that the congressional budgets are stealing money from my generation and then blaming the Social Security Administration for mismanaging the trust fund.
If you're going to offer a pension, a guaranteed amount of money in the future, then you should be making sure you can pay it; guaranteed. If making sure you can keep that promise is too burdensome, then you should not be making that promise.
It's absurd to say this and honestly I don't know how anyone who understands the scale of the numbers here and the impact these programs have on society could think this.
Pensions are funded by the next generation, just like Social Security and Welfare.
You pay for the previous generation in exchange for the next generation paying for you.
Without this kind of offset, you end up with as much as 10-15% of your population as indigent elderly, homeless and starving, who become MAJOR financial burdens on their children (and I mean MAJOR -- ask someone from China or a similar country about it) or who become homeless or die.
It's unfeasible to set aside the money all at once, and in fact hoovering that much money out of the economy and into investments would have a noticable effect on the economy. You're basically suggesting something outrageous like 5% of GDP stop being transfer payments to poor people who spend it immediately and start being investments into government treasuries and corporate bonds.
Actually, pensions are paid for by returns to investing funds, not the next generation-- at least that was the idea. The problem is that:
1. Governments don't put even the actuarially required amounts into pension funds that assume 7-9% rates of return on fund investments.
2. Governments have been slow to adjust their expectations on returns, since 7-9% is far less achievable than it was in the 80s and 90s when interest rates were much higher.
Permanent low interest rates, economic downturns, and underfunding pension funds together have created an untenable environment. The cash isn't there in many municipal and state pension funds, and earning that much in returns is laughably difficult or requires an inordinate amount of payments now.
Now, it's absolutely true that the USPS is being held to a ridiculous and overcorrected standard in this case. But it's not the case that our current pension obligations, in many of these local and state retirement funds, can be paid for through current employee cash receipts.
It's ironic that you cite social security, which is a giant unfunded liability. Pensions don't actually have to be funded by the next generation. That's just the asinine way we have it set up here in the US. It relies on a never ending baby boom and economic expansion. Surprise surprise, it doesn't really work all that well. Hence social security funded at 70% and many city and state pensions funded at less than 50%.
What we should actually be doing is pay as you go. You pay into the pension and you get out what you paid, plus growth. We could have switched to this model at any point over the last 70 years if American society wasn't so addicted to endlessly kicking shit down the road and punting on problems.
> It's ironic that you cite social security, which is a giant unfunded liability.
Social security is not an unfunded liability. If you look at your paycheck you will see a line that explicitly goes toward funding social security. It is currently underfunded due to (1) Congressional malfeasance; and (2) the $120K cap on paying into the fund.
Even the underfunding is nowhere near as bad as advertised - current funding is sufficient to pay full benefits through 2035 and about 80% of benefits from 2035-2094. If we pay back the borrowed money and remove the income cap the funding issue would resolve.
Yes, but how are we going to prevent further congressional malfeasance between now and 2094? One of the two parties is not going to stop trying to undermine social security every chance it gets in over the next 75 years...
I'd like to see constructive alternative proposals.
Today, many cities and states have underfunded pensions following a continually worsening trajectory. The scale is enormous. Please take a read about the state of public pensions in Illinois, for example.
If you're not profitable while funding pensions at their present discounted value, you're not profitable to begin with, and this requirement only revealed it.
Regardless of what their pension obligations are, shouldn't the financial stance be determined by actual financial planners instead of the US congress? That's what everyone else in the world does if they need to plan for a future payout. They pay someone to do the math. In this case Congress made the decision, and I suspect for politically motivated reasons.
In the same real world, every other corporation is required to set aside the present discounted value of promised pensions. We learned our lesson from the GMs and Bethlehem Steels of the world.
It turns out there's a difference in the way the private sector and the public sector account for pensions. In the private sector, if your actuarial numbers tell you that the pension is going to ultimately cost $1 million, then you have to have $1 million in the bank right now to fully fund it. But for public sector accounting, you can figure that the magic market money tree is going to top you up by 7% each year and so you'd only need, say, $800k right now to "fully fund" that same $1 million pension. The "onerous" USPS pension obligations is really forcing the USPS to fully fund the pension according to private sector accounting. [1]
This explains a lot about pensions. First, having to have the entire pension cash value up front makes pensions extraordinarily expensive: giving someone a $1k pay raise puts you over $20k out-of-pocket for that pension. Consequently, the private sector abandoned pensions because they were unaffordable. The other observation is that, because almost all public pension funds have assumed unrealistically high growth rates, so consequently their funding rates have consistently slipped.
The truth of the matter is that virtually all public-sector pensions are in exactly the same boat as USPS's pension is. It's just that the governments are more effective at sweeping their pension issues under the rug, while they have forced the USPS to have its pension issue sit in broad daylight.
We should be pushing to force the same reckoning on cities and states sooner rather than letting things deteriorate while thinking we'll magically make up lost ground in the next decade.
[1] Edit: As an addendum, the USPS is specific required to 100% fund its pension benefit. This 100% funding requirement is actually legally unique, although a decent portion of the private sector does seek to do so.
I'm not sure. In a traditional pension scheme, the company kicks money into the pension fund, and this kick of money plus the internal investment income of the fund provides the assets to cover the liability. In modern 401k schemes, the company kicks some money (in addition to the employee kicking money) into the 401k to generate the internal investment income to cover the liability.
It would be a pay cut if the modern salary plus employer match were less than the prior salary plus employer contribution to the pension fund. I do not know if this is the case (especially when you maximize the match). I also do not know to what degree companies were underfunding the pensions in the past. My suspicion is that the upper-middle-class who maximize employer match are no worse off, perhaps better off, but that the median employee is worse off.
City and state pension managers only need to change their stupid formulas to account for actual risk and variance in annual returns -- not some mythical 8% annual no matter how good or bad the economy does. Yes, some cities have been underfunding even the contribution amount and they should be held to account.
But the claims of unfunded liabilities are far overstated. The worst of them assumes that you have to have the pension fully funded for a new employee on the day they start working which is ridiculous in any business.
They can’t set their own rates and have an obligation to deliver everything, which leads to them shipping many things (not just Amazon) for free. There is no other country in the world, no other private business that lets you send first class letters for $0.60 for a reason. For years they were also wrangled into a treaty obligation that forced them to ship small packages from China for a loss.
They also have huge retirement —prefunding obligations which is pretty much unprecedented in either private business or government agencies.
All of these public obligations are poorly thought out and largely out of the control of the USPS itself. People bitch about USPS being inefficiently run and that’s true to some extent, but the most fundamental issues they struggle with revolve around factors beyond the control of USPS management.
Except for bailouts - like the one currently being proposed - USPS is self-funded and does not receive money from taxes. One problem is that USPS is meant to be a service (congress has to approve rate increases), but it's treated like a business. This wouldn't be such an issue if people weren't trying to sabotage it so that they could privatize it.
I've heard the deal with Amazon is bad, and the new Postmaster General is trying to renegotiate it.
In my experience, no Priority or First Class packages were delayed in favor of Amazon packages, but the flood of Amazon packages did overburden the system causing some delays. From what I understand, USPS is receiving more Amazon, because more people are shopping online (Covid) and because Amazon is (was?) dealing with a labor dispute. A couple weeks back my station got absolutely hammered - received about triple the typical Amazon volume on back-to-back days. The clerks have to sort each package to the appropriate routes, and then the carriers have to deliver all those packages. As they're out delivering, they're picking up packages to bring back to the station, and those are the packages that were subject to delays.
In general, everything goes out every day, and even if one package is left behind, someone has to drive that package to the plant. From a business standpoint, this doesn't make a lot of sense, but it's part of the service culture at USPS, and clerks and carriers are horrified and mortified to hold up mail, which is why you see complaints like the one from the carrier in the article.
At the same time, USPS was rolling out some new policies, and they're missing a lot of people due to Covid, so a lot of factors converged to make the situation difficult. But, at my station, no mail has been delayed for weeks. I can't speak for the plants, but the vast majority of Amazon packages are delivered to the stations as drop shipments, so if the plants are having issues with volume, it's not because of Amazon.
During Covid, letters and flats had been down in volume (businesses being closed = less advertising) by somewhere between 25% and 40%, but they appear to be back to normal, and parcels had been up something like 60% overall.
I think that's most of the pertinent information. But, I'll say that this is typically the time of year where many USPS employees exhale a bit. The overtime dwindles, and the pace slows. Instead, much of this has felt like Christmas - anyone on the OT list and any non-career employees are working lots of hours to keep up with demand, and sometimes they're even compelling people not on the OT list to work OT. So, it feels like the holiday season never stopped, and we're all pretty exhausted. Of course, we feel lucky to have been able to work through the pandemic, but it's taken its toll, as well.
USA should eat the loss, or let USPS run itself as a business (no deliveries for 55 cents to Alaska for one). Of course they can't since entire USA runs on it: bills, tax notices, communications, e-commerce etc etc. So what it loses $10 Billion a year? Call it a loss leader.
Banking services for rural Alaskans / people without internet access / anyone else in the 2% [x] lose about as much as postal services.
[x] In the west big tech can more or less serve 98% of the population. but there is (approx) 2% of the population who for various reasons are massively uneconomic to serve - mentally, ill, disabled, poor, lacking literacy skills or the wrong language. Hell its probably more than 2%. But the point is Government must serve these people and provide a level playing field. Commercial companies dont have to.
Those are already challenges the USPS has to deal with. They have infrastructure in place to address those challenges. If they're paying those costs anyway, they might as well add services that can take advantage of that investment in exchange for more revenue.
There certainly would be an additional marginal cost, but it would be much, much less than an entity trying to start that from zero.
Of hand, I believe it is a lot higher than that. I listen to an NPR (Or was it NYTimes?) podcast that interviewed working poor people and the number thrown around was that something like 40% of Americans working poor are unbanked with some areas of the country upwards of 60% (I think they said certain zip codes in Queens) are unbanked. What really stings working poor people from using banks are the hidden fees. There needs to be cheap and no frills banking for the poor.
The USPS should provide local health care services. An interesting deployment strategy for socialized medicine. It would be everything everyone expects from both right and left wing perspectives.
Edited to add: Wealthy privileged HN readers would not know this, but poor people who are "unbanked" have to use USPS money orders to pay bills, and the USPS charges a fraction of one percent on money orders. So yes, the USPS is already performing banking functions.
Just curious, but why are poor people unbanked? It seems like one could open a bank account with pretty much $5 at almost any bank in the country.
Are they unable to do that because they wrote unpaid hot checks in the past, engaged in some kind of fraudulent activities? I honestly don’t know. Here is a study from Wharton that talks about it[1] but all I get from that is that “poor people are often financially ignorant and don’t avail themselves to banking services even though many of them could if they wanted to.”
USPS doesn’t need to be a bank. We already have banks. The problem is that a large number of unbanked people don’t understand how to use or access a bank (apparently.) My point is that a USPS bank is a solution looking for a problem.
The implications in your comment are gross, but to respond to the underlying question:
Using a bank as a poor person is stupid expensive. Have less than 200$ in an account? That's a monthly fee. Use your debit card less than 15 times last month? That's a fee. Need checks for that account with only $100 in it? Most people get them for free but you pay. For a time, TD Bank was even applying transactions to your account out of order so you would incur more than expected overdrafts and accrue more overdraft fees than you actually should have had. They lost a court case about that and had to pay people a few dollars, because class action suits are a travesty of justice often.
For another discussion of why banks are terrible for poor people: "Why It's More Expensive to Be Poor", from PBS's personal-finance channel: https://www.youtube.com/watch?v=aLwRZibUqL0
So it would make a profit providing a service no one else finds profitable (offering services to these unbanked), and will also take a loss to serve this underserved marked?
How can it act as both a public service and source of free money? Even if it made a small profit doing so, it would be less than ramping up their most profitable areas and would have an opportunity cost.
(If you mean they should do it purely as a public service, that's a fair point, but you're writing like it's an easy way to improve their financial position, which doesn't make sense.)
I don't think it's a given that just because no one else finds it profitable means that the USPS couldn't operate it in a profitable way.
Most of the reasons that it isn't profitable relate to problems that the USPS already has to solve as part of their core function. It doesn't make sense for a bank to invest in physical infrastructure in the middle of nowhere, the cost of the building would erase any potential profit. The post office already has a building there though (and staff, etc). A significant amount of the up front expense, as well as a decent chunk of the ongoing expenses, is already going to be spent anyway.
Yes, but that means you're saying the USPS has some kind of advantage locating where there are disproportionate unbanked and also a dearth of banks. But I keep hearing about the unbanked as being an issue of large urban areas, which don't have any shortage of bank locations.
So for these five or six people in rural areas that can't get a bank account, and aren't complete deadbeats, and can't get to a bank as easily as they can get to a post office, the USPS has a cost advantage in serving them. Okay. I just don't see numbers that make this a big source of free money.
You can't really evaluate a public service's accountability based on its balance sheet alone. It's a public service and is there to... provide a service.
In the past USPS has been evaluated as "thing that should make money" which is silly - if it was profitable to run a reliable service in that space the commercial sector would have forced out the government.
Its important to note that the purpose of the article is to take an isolated incident of one strangely misguided manager and/or management labor dispute turning into false accusations, and turn that isolated incident into a stage for national policy discussion. By doing that the source becomes a propaganda outlet instead of a journalist outlet, unfortunately.
Possibly, if you shipped a product thru that one individual post office, it might have arrived a day late. Not surprising you haven't noticed the problem, because there isn't one.
I've noticed delays in getting items shipped to me via USPS. One shipment took several months. Just because you do not perceive an issue does not mean one does not exist.
Having something take several months is not what is being discussed though. That is not an example of slow shipping, that is an example of something being lost or misdirected.
While the article is simply a local report about a local issue, it got reported because the USPS is intentionally slowing down mail delivery nationally, under a new boss who was appointed to wreck the agency:
The stop of overtime at USPS, in the middle of a surge in online shopping, is real. The lack of staff right now due to COVID but also due to lack of hiring, is real. Every other carriers is hiring like crazy, but not USPS. The problem is real. The fact that the OP anecdata did not experience any delays is totally irrelevant to the conversation.
Is there any inherent problem with the USPS over-hiring now and needing to let people go later? Is it somehow not possible for them to easily reduce the workforce after this, temporary, surge?
I also run a mail order business with "statistically significant" order quantity sent USPS. I've been tracking delivery times. For several weeks around July 4 more than 10% of packages were seeing >2 week delivery times. However it has since returned to normal.
I expect delivery times will go sideways again in Q4.
The difference is that utilities don't also have their liabilities defined in law. No electric company has a standing mandate to stuff $110 billion under a mattress so that they can pay pensions to people who won't be born until the next century.
> The release of the existence of such a relationship or of the material terms of any such agreement, should it exist, with a particular business entity could harm the Postal Service's commercial interests in obtaining competitive rates with a variety of business partners in the future.
Understandable reason. Redacting only the "necessary" bits might well render the document unreadable.
Fuck that... That is the same as taxing the middle class (because you must know that taxing essential services affects everyone equally no matter how much money they have and that poor people get tax credits for it)
More like if you let your legislature run wild and artificially cripple your own services.
USPS is a service that warrants a bailout, and repealing of these acts. They have been self profitable for a very long time, but cannot sustain their operation in this way.
As far as I can tell, before the deal USPS did math along the lines of “10% of our trucks deliver packages and 90% letters” so then they laid out the pricing for packages. But then did a deal with Amazon so that now the trucks are 30% packages.
Not projecting into the future and instead trying to hold the pricing ceteris paribus was either a major oversight or corruption
We're 4 months into the pandemic and their workload is only going to get worse if we have nationwide mail in ballots. If they're going to do something, they should get on it instead of letting their members suffer.
They are doing something. Screwing up the system is the goal.
They tried, 'Poll numbers got you down? Just start a war!' but it didn't work because no one is interested in fulfillment Bolton's wet dream of starting WW3 with Iran.
So now it's, 'Poll numbers got you down? Just cheat!'
Not sure about USPS specifically, but our canada post is just finally catching up now.
They explained it was basically christmas holiday load, without the extra staff, with less staff on a non busy time (people taking covid related time off for sickness and family).
While I definitely had a couple packages arrive late in the April/May timeframe, since June I've had a couple packages actually show up before the delivery date Canada Post gave.
You'd have to be pretty crazy to actually mail your mail-in ballot. What is the only way to expose every election in the country to the meddling of the federal executive branch? Interpose the USPS between the voter and local election officials! Whether by incompetence or malice they'll find a way to fuck it up. I intend to carry my own ballot to the county election office.
I don't think that mail in ballots will significantly affect the USPS. They do about half a billion mail items per day. Ballots for everyone who is registered to vote is mabye 200 million. Ballots are also small. Packages take much more time to handle by the mail carrier.
Critically, mail in ballots are generally not accepted late. USPS will get everything where it's going eventually - but if the Trump appointee announces an impromtu postal holiday the week before the election then
1. Probably nothing technically illegal has happened
2. Nobody's mail-in-vote will arrive in time to be counted
This coupled with the fact that those rabid Trump fans will be showing up at the polls in person might[1] be enough to tip it in his favor.
1. It still might not be enough though, he is doing hilariously abysmally in polls.
As Wisconsin demonstrated, the attempts at voter suppression will likely backfire. If the Republicans had agreed to mail-in balloting or a delayed primary, they might have held on to the state supreme court seat they lost, but what they ended up doing kept Republican voters home (why go vote in person in a pandemic when there's no top of the ballot choice to make) while the Democrats stood in line (between the obvious attempt to make them stay home [Streisand effect] and the real impact of their top of the ballot choice). I'm just some schmuck in another state and I could see the likely outcome of the attempt at voting suppression before it happened, but Republicans seem to have only two tools in their toolbox anymore: tax cuts and voter suppression, and those tools aren't doing the job now and hurt more than help.
The point is that mail-in ballots are time-sensitive and the USPS has already fallen behind on its current workload.
I've seen tweets of e-tailers saying some packages (very small+light first class... the kind that are only cost effective thru USPS) are taking weeks when they used to take 1-4 days.
Unless USPS magically becomes more efficient in the next 100 days, their backlog of work will grow and non-prioritized deliveries will fall further behind. It will especially hurt voting is Amazon (or other packages) have higher delivery priority than ballots and ballot materials (usually 4+ items per voter per election).
Delivery is based on routes, which are designed to take 8 hours to fulfill on average. If there's a heavy parcel day, bad weather, coverage for sick workers, etc, the 8 hours may be 11 hours.
Now, they stop working after 8 hours in most cases and leave whatever is left in a pile to be done later. Just like with computers, when you develop a backlog in a system optimized for throughput, things tend to get worse.
You shouldn't be downvoted for stating the fact that this changed drastically under the new Trump appointee, who has donated millions to his and other republican campaigns.
The new head of the USPS is a big campaign donor and made specific changes in how the post office works that are bad. I'm blaming the literal choices of Trump's appointment, that appear to help Trump.
As anyone could have easily seen coming, Trump used the stimulus money like a slush fund and this guy was paid to destroy USPS in general and specifically to screw with mail-in ballots during the election.
Pretty clear this is an intentional move by the Trump appointee DeJoy. It's a classic Republican tactic. Appoint someone to screw up a public service. Use that as an argument that it doesn't work. Privatize it so your rich friends can make a killing. It also has the added benefit of complicating mail in voting which might help the Republicans keep the senate and presidency. While I agree the postal service has some issues the current problems are entirely artificial.
Intentional mismanagement due to ideology and greed.
> The Postal Service is a joke,” said the President in May.
> “Every time we’ve slowed down mail, we’ve lost revenue,” said Dimondstein. The new postmaster general, he said, instituted sweeping policy change after just one month in his position and without consulting any unions or representatives with deep institutional knowledge.
> “These changes are happening because there’s a White House agenda to privatize and sell off the public Postal Service,” said Mark Dimondstein, president of the American Postal Workers Union.
On the one hand, that sounds plausible on the face of it. Underhanded political shenanigans aren't rare.
On the other hand, I hear this used as a fully general explanation for every messed-up public service, including ones in places like the Bay Area, where government-run services are usually run very poorly and Republicans have near-zero influence. And there are so many other reasons why a public service is likely to end up poorly run eventually: bad incentives, otherwise-good incentives that don't incentivize their own preservation, accumulation of increasingly heavyweight bureaucracy and procedures, gradual transfer of power from leaders who know how to do new things to leaders who only know how to do the same things, and so on. Blaming everything on political sabotage doesn't seem like a great fit.
(Maybe in the case of the USPS it really is a case of political sabotage, but this is why I'm skeptical of those claims in general.)
I totally get your concern, and I'm sure people tire of having partisan politics used as explanation too often for issues of the day, but that seems pretty darn explicit in the case of the USPS[1]
Anecdotal stories should be taken at a grain of salt, but I've heard more complains about package delivery in the last couple weeks from people who didn't know anything about the political rumblings at USPS, and that combined with the recent appointment news makes me doubt that it's just a coincidence.
Who said only republicans do this? Defunding public services is basically a bipartisan agreement in the US since the clinton days. And the overton windows of the parties are not the same in California as they are in Alabama, anyways.
Seems like you didn't read the article. The issue, according to the article, is that USPS management is intentionally delaying regular mail in favor of Amazon deliveries.
Yes, I've read how the article blames USPS to favor Amazon. I've also thought about why they are doing this. Why is the USPS of Portland doing this? Are they being influenced by Amazon? By the national USPS? By the government?
The problem with the mail is the symptom, like a headache. But what is the cause, like a blunt to the head or migraine or a hangover?
USPS is understaffed from COVID and the new Postmaster (installed by Trump) tells people to not work overtime and just leave the route when their shift is over, which means more mail gets backed up.
> The real issue here is the fact that the USPS is overloaded and requires extra government attention.
I agree with this, and this attention needs to come in more ways than extra $$. As others said, USPS is stuck in a weird state: need to be self-funded with no authority to set prices. So the gov't needs to either subsidize some things or let USPS compete.
However, to fix USPS some of that attention needs to come in the form of hard kicks and forced reorgs. USPS is a dinosaur with a lot of inertia against improving efficiency and modernization. That causes problems, costs a lot of money and drives customers away. USPS is also notorious for advocating for spam senders (who give USPS a lot of revenue) and against people they are supposed to serve. Those are all problems that external "attention" should resolve.
As an anecdata, I was occasionally involved with field testing campaigns which include significant shipping for next day delivery a couple of thousand miles away (something would break or some new hardware would be needed and will be shipped from home ASAP). This provides a non-insignificant revenue to the shipper. We tried USPS, but it just did not work. With FedEx we get accurate, near real time package tracking, so the minute the package is dumped at our hotel we see it and someone can drive out and pick it up. With USPS, their system was showing delivery at the end of the following day. Maybe something changed in the last few years, but I doubt it.
There was huge consolidation “for efficiency” in the past decade. They shut down lots of distribution centers. Local mail that used to be delivered over night wis now delivered in 3 days at best.
USPS is efficient and self-sufficient, congress has just done everything possible to make it look like they're failing.
If they didn't have to prepay pensions (something no other government agency, or private company in the world is required to do, or does), they'd be in great shape.
In fairness, pension pre-funding should be an expectation of all government agencies and private companies with pensions. But the way it was introduced was absurd, IIRC USPS had 10 years in which to pre-fund 50 years of pensions.
It doesn't matter if it's 500 years. The farther it is into the future, the greater the time discount to fund it now. "75 years" just sounds inflammatory as a soundbite, but it's completely reasonable. If you're promising it, you should book the expense's present discounted value.
Why aren't other federal agencies subject to similar requirements? Why isn't such a practice standard in the corporate world?
> If you're promising it, you should book the expense's present discounted value.
Your argument proves way too much. There is no "promise" here. To whom is the commitment made? The beneficiaries of such pensions do not even exist at this time. The most you can say is that there is an expected future expense. But if your claim is that an entity should be presently setting aside money for all anticipatable expenses, no matter how far in the future, then I think you'll find very few CFOs to agree with you.
>Why aren't other federal agencies subject to similar requirements? Why isn't such a practice standard in the corporate world?
It is absolutely standard for corporations to be required to fund their pensions, and to include liabilities on their balance sheet that aren't due for 80 years (in what few cases those actually happen in). Edit: Do you know of a rule whereby e.g. such bonds can be left off the balance sheet? I don't.
If other federal agencies (which are different in many other ways) aren't required to fund pensions, they should be -- I agree.
>Your argument proves way too much. There is no "promise" here. To whom is the commitment made?
The workers, to provide pensions for their dependents.
>The most you can say is that there is an expected future expense. But if your claim is that an entity should be presently setting aside money for all anticipatable expenses, no matter how far in the future, then I think you'll find very few CFOs to agree with you.
It's not an "anticipatable" expense, it's one that you have specifically committed to as compensation for labor, every bit as "anticipatable" as having to make this month's payroll. Do you know a CFO that thinks it's fine not to have allocated money for that?
>Do you know a CFO that thinks it's fine not to have allocated money for that?
I can't know the state of mind of any CFO. What can I do is look at the record and find companies that have failed allocate money for that. There's no shortage of them in the USA.
This is from 2003, but is fairly indicative of the games played:
So regardless of whether or not it is "absolutely standard for corporations to be required to fund their pensions" (and I don't believe that it is anywhere near as standard or required as you portray it), the facts on the ground are that there are many, many pension funds that are underfunded by many different metrics.
I can also look at the record of corporate bankruptcy proceedings, and note how the obligations towards pensions are handled in comparison with those towards other types of debtors. TLDR: not well.
Finally, there is no specific committment by corporations to pay into a pension fund, only to pay out. They are at liberty to play whatever games they want regarding paying in. The simplest is to declare assumptions about future revenue, and pay in less (or nothing) in the present.
Yes, there is an epidemic of this problem in state/local public pensions. I was speaking of for-profit corporations, for which we collectively have gotten our act together and required it. I totally agree it needs to be fixed for state/local pensions similarly to how it's being fixed for the USPS.
>I can also look at the record of corporate bankruptcy proceedings, and note how the obligations towards pensions are handled in comparison with those towards other types of debtors. TLDR: not well.
Well, yes, that's a reason to require the pensions to be funded (at present discounted value), as the benefits are accrued -- why are you bringing this up to oppose that requirement on the USPS, except to condemn those workers to that possible fate?
>Finally, there is no specific committment by corporations to pay into a pension fund, only to pay out. They are at liberty to play whatever games they want regarding paying in.
This is false; among other places, see the Forbes overview. Many reforms have been enacted and the PBGC has requirements. This isn't the 50s anymore.
Sure, ERISA has led to a series of rules about minimum contributions.
But there are bunch of games corporations can play to reduce or avoid minimum contributions. Principle among them is to fund too much of the plan via contributions of the company's own stock (limited in scope but large enough to underfund the plan). If the underfunding is limited to 90% of the fund's liabilities, it can take 3 years before an increase in funding is required.
But rather than focus on the rules, I prefer to look at the actual on-the-ground situation. Many corporate DB plans are underfunded. It's not enough to say "the rules say they must fund liabilities as they are accrued" when many corporations demonstrably fail to do this.
Anyway, most people recognize that corporate DB plans are more or less over, so the comparison between corporate pension provisioning and public versions is going to get less and less relevant (probably).
"The confusion over 75 years may be due to an "accounting" and not an "actuarial or funding" issue. They only have to fund the future liability of their current or former workforce.
I've seen this claim elsewhere but IMO it's ridiculously misleading. It's technically true that USPS is mandated to fund pensions for people that aren't alive yet. However, they're not required to actually start putting the finds away until those people grow up and start working for USPS.
EVERY company (either private or publicly traded) in the US that offers a pension is legally required to do one of two things:
1. Pre-fund the pensions of employees who aren't born yet
OR
2. Stop offering the pension before they hire the people who haven't been born yet
Some companies chose to do 2, but without an act of congress the USPS is locked into option #1. This is tautological for any long lived pension plan. It will eventually serve people who haven't been born yet. I don't see why people are so surprised by it.
Literally every single private company in the US is required to prepay their pension obligations. When MAP-21 changed the formula for how much prepayment is necessary, FedEx stopped offering pensions to new hires. I think UPS only offers pensions to union employees now. I think the sticking point for USPS was that they were also required to prepay the retiree medical benefits that they offer
USPS pension funding gets brought up quite a bit as some kind of a conspiracy, but that doesn't appear to be accurate.
The issue for the postal service is that the law was changed so that the USPS would start funding their retirement health care costs since they are promised to the workers and the projected costs had exploded. This was supported by a bipartisan commission, the GAO, and the Postal Service itself:
>...Although retiree health benefits are often unfunded or poorly funded, two considerations suggested the Service’s retiree health care obligations should be funded: they are as firm a commitment as the Service’s pensions, and they had become enormous (about $75 billion by 2006). In 2003, the presidential commission suggested establishing a reserve fund for these obligations, and the Postal Service itself sent Congress a proposal for creating such a fund.
>Prior to 2006, the Service simply paid retirees’ health benefit premiums when they came due. The Service put aside no money when it promised the future benefits. Paying benefits when they come due rather than funding them in advance is known as the pay-as-you-go or unfunded approach.
>Early this century, Congress, the Administration, the U.S. General Accounting Office (GAO), and a bipartisan presidential commission expressed concern about the lack of funding. Although retiree health benefits are often unfunded or poorly funded, two considerations suggested the Service’s retiree health care obligations should be funded: they are as firm a commitment as the Service’s pensions, and they had become enormous (about $75 billion by 2006). In 2003, the presidential commission suggested establishing a reserve fund for these obligations, and the Postal Service itself sent Congress a proposal for creating such a fund.
>In 2002-2003, it was discovered that the Service was contributing far more than necessary to fully fund its pensions, and Congress allowed the Service to contribute less. Congress decided the pension “savings” could help patch the retiree health benefit underfunding. In 2006, as part of the Postal Accountability and Enhancement Act (PAEA), the Postal Service Retirement Health Benefits Fund (RHBF) was established. Most of the Service’s contributions to the new fund could be paid using the pension “savings.” PAEA was bipartisan legislation with broad support.
>...If they didn't have to prepay pensions (something no other government agency, or private company in the world is required to do, or does), they'd be in great shape.
In relation to this, the USPS has posted this as part of a fact sheet:
>...More recently, the USPS Fairness Act was passed by the House. It would eliminate the requirement to prefund
retiree health benefits and forgive our current defaulted prefunding payments. However, ultimate passage of the bill will not reduce our underlying retiree health benefits liability, nor improve our cash flow or long-term financial position.
It's also something we did in Canada as well. There were good reasons to make sure that the postal office had their pensions well funded. They're most likely to be disrupted by technology. We expected email to eviscerate traditional post, and it has, but for now package delivery and spam mail are making up the shortfall. Even so, it isn't too hard to imaging a post office that runs at a fifth of the workforce once we get more competition from autonomous devices.
> However, to fix USPS some of that attention needs to come in the form of hard kicks and forced reorgs. USPS is a dinosaur with a lot of inertia against improving efficiency and modernization.
I haven't seen evidence of this, in fact I think it's just coming back to the lack of funding. USPS is a bit of a dead-end job due to how limited its lifespan is (continued calls to defund it from the right) and in its current state it isn't really attracting talent. If the US cared about its post service it could be revived and greatly improved.
Also, just FYI, you folks have it great. I'm a US expat in Canada and CanadaPost is comparatively terrible - it's slow, expensive, and most package delivery happens through the third party companies (like FedEx, UPS, Purolator, DHL whatnot) which are absolute trash up here - without USPS constantly raising the bar the independent delivery services routinely lie about delivery attempts, refuse to deliver to addresses and re-route packages miles away when they have offices down the street.
Since moving up to Canada I've been pretty wowed by the healthcare, but the mail system up here is terrible. I think there are some intensely dedicated souls in USPS still that have managed to keep everything going on their shoestring budget, but they're eventually going to retire and the defunding will probably be capped with USPS being privatized for "costing the tax payers money".
It's okay though - delivery service in DC will be great. And USPS will be the latest example of "failed socialism" and held up as the Dems mismanaging budgets.
I've had a Prime membership forever, originating from when it actually meant something to have it.
Prime changed from being "We're going to have the package to you in two days" to "We'll get it to you in two days, if we feel like it and it's convenient and inexpensive for us to do so".
Repeatedly, lately, I've bought items based on delivery times only to receive updates a few hours later pushing the delivery times back by days. It's one thing to have an exceptional circumstance during delivery, and quite another to change the committed (was it really?) delivery time within a few hours of the purchase decision.
The excuse I've seen is that Amazon points out that the shipping time was still 2 days, it just took them a week to start the shipping process. It seems like they're trying to minimize time in transit as opposed to trying to get the package to my doorstep ASAP
I see a number of reports regarding slow delivery times from Amazon.
My personal experience is the opposite: times were heavily impacted peak-COVID, but now are returning to the very fast times, and are often same-day (!) or next-day delivery.
The only times I see times being pushed back now is when they ship by UPS via a program where UPS takes it from Amazon and gives it to the USPS for last-mile. These can take 4-5 days.
But if Amazon's delivery drivers are handling it, which is most of the time for me, it's very fast.
This isn't meant to invalidate others' experiences. But I wonder what the difference is. My experience is in an urban area.
This has been my experience as well. Also, anything coming from the nearest distribution center always arrives on time, but anything else is a crapshoot.
We're the polar opposite from you: Amazon deliveries here never arrive in less than 3 days, before covid or after (rural New Mexico). The pandemic seems to have had essentially no impact on delivery times here. It was "sort of fast/sort of slow" (depending on your baseline) before and it's the same now.
Is there really an issue though? Almost everyone I know only checks their mail about once a week anyway. USPS/mail is still important but not as critical as it was 20+ years ago, especially when it comes to delivery frquency.
Maybe it's time to start delivering mail twice a week instead of every day.
I check my mail about once/week, but I have packages directed to an Amazon hub.
It was suggested many times over the years that the USPS reduce delivery to cut costs, and that didn't seem like a bad idea, but I'd suggest that any changes to the USPS need to come from an aligned perspective and in an orderly fashion, and that's not how the USPS is being treated these days.
It could be an issue for people who expect medication that could expire.
The thing is that for priority mail, the truck still has to drive every day. Might as well load it up. Problem I read from the article is that that prio-1 mail is not handled as prio-1, but rather after other, more lucrative, mail.
But to be fair, in my country we had a new mail service competing with the public mail service. The new mail service only provided twice a week, but at a reduced rate. If you didn't care about your package being delivered a week from now, then it was convenient. End result was that the public service no longer could compete with the lower prices and reduced volume, BUT in the meantime was allowed to merge(=take over/take down) with the new mail service, by grace of the government who gave them a get-out-of-antitrust-jail card. Currently the case is at the EU court, which decided the merger has to be reversed, but the damage is already done. Contracts ended, brand damaged.
If you privatise your mail service, don't be surprised if it becomes stupidly expensive to deliver the same quality of service. Competition won't exist because it will be acquired by the main company. And the government will simply pay for that quality of service, as that is what the voters expect.
For me checking the mail when I’m not expecting something (so, 50 weeks out of the year) most closely resembles emptying a small trash bin every so often so it doesn’t overflow. I’m generally pro-USPS for other reasons but yeah, checking the mail is a kinda worthless chore. Do it so they don’t suspend delivery in case I need something. Not to read anything that showed up.
Such contracts are negotiated modulo the principal agent problem. The person agreeing to the contract has incentive to make themselves look good and otherwise personally benefit, and little incentive to make it so that the organization doesn't suffer in the long rung. That the USPS has insisted on keeping this contract private is evidence of Amazon getting a special deal that would not survive scrutiny by the public or by other market participants (UPS/Fedex/DHL). In other words, corruption.
Tangentially I've heard stories of mail being purposely held back a day, to support that narrative of discontinuing Saturday delivery that was being pushed 5-10 years ago. This agency has been getting politically strangled for quite some time.
> Is it because USPS is not receiving enough funding from the government
Why is this even a painpoint ? How much funding does Fedex or UPS get from government to stay operational ?
I find it surprising that USPS remains operational at such massive scale while being a cash sink for American taxpayers. Putting more money in this sinkhole is unlikely to yield better results. If US government makes it legal for other carriers to carry letters (which is illegal at this point) the need for USPS would be much lesser. USPS could then focus more on rural and underserved communities and negotiate contracts with Fedex/UPS etc.
> How much funding does Fedex or UPS get from government to stay operational ?
The government also doesn't set Fedex or UPS's rates, or appoint their chief executives, or pass laws about their pension funding. So it's not a fair comparison.
This comment completely misunderstands the USPS's problems. The USPS doesn't get public funding, but its pursestrings and business model is micromanaged by Congress (which has no business placing most of the mandates on the USPS that it does). This is roughly equivalent to having an environmental conservation group being given a majority of board seats on a real estate developer.
These micromanaging mandates include schedule of delivery, the breadth of service area (which frequently must include the least profitable places to deliver), micromanaging of every price increase, and restrictions that the USPS can't move into other businesses that might encroach on their lobbyist-buddies clients (eg. paycheck cashing, which USPS used to do). I can't make sense of how much the 75-years pension prepay is catching up from insufficient coffers (perhaps justifiable) and how much of it is just punitive to keep the USPS from running efficiently and being able to use more of its debt for capital improvements.
According to WSJ, UPS added delivery surcharges in May due to COVID's impact. The only reason USPS can't do the same to manage the supply/demand curve changes is because Congress is somehow allowed to micromanage USPS price changes.
He is no Adam Curtis and HN readers probably dislike him^1, but Ken Loach's most recent film (2019) is about delivery services and the "gig economy". It is called "Sorry We Missed You".
1. His last film in 2016 won the Palm d'Or at Cannes if that means anything.
Honestly this (or, at leasst, prioritisation of parcels over letters and printed paper) is the right way round. If it were practical I'd back an actual and punitive financial tax on sending anything via the post that could be communicated electronically instead. Waste of paper and resources.
What rank-and-file boots-on-the-ground employee of a mega-corp who works at a local office doesn’t think the clueless paper-pushing bozos at the head office are the ones cramming through bad decisions?
The postal service is one of the only ways for democracy to happen this year. Amazon and USPS has been strategically linked by groups that dislike both organizations.
First people are told that vote by mail leads to fraud and secondly that Amazon is deeply political and against the current power in Washington. Throw in ownership of the Washington Post, and you a suddenly have a good recipe for a fake news conspiracy to rile up the base with in an election year.
Benjamin Franklin knew the power of the post office in the 1700s.
They were smart enough back then to know that people spread out to different geographic areas needed a legitimate way to vote and communicate.
He also knew that this system should retain some form of government control because the amount of information moving around inside the post office could be used by private parties to influence government affairs.
Other than the political angle, the attacks you see against the USPS are simply about money. Over the years, in the rush to privatize, the USPS was set on the path to be a private company.
Their idea was you remove funding from USPS, make insane capital requirements for future commitments that no other company has to do, then wait until they have massive capital expenditures.
The old mail trucks we are are familiar with have supposedly been catching on fire because they are way past their service dates. As far as I know, the USPS does not have a plan for replacements for these outdated vehicles, and even if they did, where is the money going to come from?
Last point in my rant is that you could ask probably half the country or more if Amazon helped bankrupt USPS. I bet many would say yes because that is what they have heard or read in articles. Amazons contract likely provided needed capital to keep USPS going since 2013.
Instead, the people who have been actively trying to bankrupt the USPS for more than 30 years are now trying to blame the main private sector company that supports it.
It's all lies, as usual. The post office has some of the best main street real estate all across the country.
Any political crony knows that if they can get their hands on that after being privatized, the control over information in the mail system, and the value of the land all across the country, would turn that crony into quite an oligarch.
TLDR; Support your local post office if you care about democracy
This is also the case in Italy as far as I know. I was a mailman for the Italian mail service for some months in the summer of 2019. We were encouraged to give priority to paid work (advertisement, other deliveries). Mail doesn’t make any money, it’s just a public service. Which is why the postal service also does banking and has its own mobile carrier. These things pay for the public mail service to work. Anyway this is the case in Italy so maybe it’s not relevant.
Yeah it's a similar situation in Switzerland. Not sure about the prioritization of deliveries though but the postal service started to offer different kind of services (like starting a bank "Postfinance" [which I guess is a swiss thing to do], or selling office supplies).
In general: revenue from mail is down but revenue from parcel is up.
Also during the COVID-lockdown people started ordering shit online like crazy, so there were of course delays and problems.
With deliveries up in volume due to the pandemic, it is a failure of leadership that the USPS didn't get more funding and support.
This is the time you want more deliveries over in person interactions, of course people will ship more, but they are expected to roll with the support of a time without such a spike in demand. Essentially these are holiday level volume numbers with regular time funding.
As a taxpayer, I want money I pay going to the USPS, it is extremely valuable infrastructure for the last mile, small business and big business as seen here with Amazon.
Without the USPS, and the Universal Postal Union (UPU) [1], shipping would be much more expensive. It really is a sort of loss leader service that fuels so many other economic network effects. The UPU and USPS are some of the best ever public services created and one area where the world gets along, anyone attacking it should be immediately ejected from power.
Any infrastructure bill should include shoring up the USPS and expanding it, possibly including banking again and financial services that can be attained by the unbankable. USPS is required infrastructure, the lack of care about it is short-sighted and inexcusable.
"Did you read the article" and "Do you work for Amazon" both break the site guidelines. Please review https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here.
Your comment would be just fine without those bits.
That behavior still makes sense if one factors in that Amazon is a customer with the option to ship via another carrier if they find the USPS can't meet (Amazon's) delivery targets.
USPS is, unfortunately, operated like a private company, and their bottom line gets hit harder if Amazon switches most of its business to FedEx than if other, much smaller firms decide 1st class isn't a reliable enough guarantee and stop paying for it.
The USPS provides universal service, especially to areas that are unprofitable. Moreover, congress sets their rates instead of letting market forces determine rates. Finally, they are under retirement funding rules that commercial carriers are not. Then, after being required to run unprofitably, legislators observe that the USPS is not competitive?
One can't help but wonder if Amazon wants to pull up the ladder behind them.
That’s why Amazon built their own Shipping network now. They only use USPS where it makes financial sense, notably often in the Midwest or in places where they don’t have other deliveries. They are rapidly gaining competitive advantages that cannot be equaled without billions in investment.
This is not true for much of society. Many, many people receive important documents in the mail: voter IDs, driver’s licenses, voting forms, Medicare and Social Security forms, utility bills, mortgage statements, IRS docs, unemployment benefits, and more. These all seem pretty meaningful, no?
Yes but who orders a shiny new utility bill and obsessively tracks its progress until it's finally delivered and they can joyfully unbox it? Who orders their mortgage statement and medicare form and forcefully complains to the ombudsman when they come late three times in a row?
People who are struggling to make payments or rely on Medicare for their health? Is it really so hard to imagine how other people live their lives differently?
Some of us that recognize the severe damage that can be inflicted on you if said documents were to fall into the wrong hands because most companies don't give a shit and allow their CSR to be socially engineered into fucking someone over?
Fine with me. I pay Amazon $129 per year for Prime service and if this is one of the ways they arrange it, great. What else comes by mail? Junk, or bills that are due in 3-4 weeks, or statements. First class mail was always kind of variable in delivery speed anyway.
It's not so crazy that the highest rate mail goes through (if that's the case) at the expense of bulk-rate mail. But if first-class and priority mail is being delayed, as is being alleged, that's a problem. People aren't getting the service they paid for.
so you're telling me because Trump is trying to get back at Bezos, he's telling the Postmaster to prioritize Amazon's packages over regular mail delivery?
This is true overseas as well. Israel Post used to have huge issues with deliverability, but whenever an Amazon package showed up they'd get priority and was rarely, almost never, lost or delayed.
In fact, they even have a partnership now and text you when an Amazon package arrived ("a package has arrived from Amazon") but not always when another vendor's package arrives, even if there's a phone number attached to it.
If the USPS would stop filling my box with pounds of junk newsprint and other spam, then I might be sympathetic. Amazon sends me stuff I ask for. The majority of stuff USPS sends me goes directly in the trash. It shouldn’t be allowed to send people bulk mail unless that person opts in. Mailbox spam is worse than digital spam because there is a distinct environmental cost to printing so much crap. USPS shouldn’t be providing discounted services for anyone.
Aside from this article and similar, I can't find any credible confirmation that Amazon packages are delivered "fourth-class" or what that means. After all, big bulky boxes are hardly competing against catalogs for space in the mail truck, the differences in size are so huge.
Amazon has a private contract with the USPS that presumably puts it in its own unique category regardless of other labels, and the USPS likely loses money for late delivery, so this is just things operating how they're intended to operate.
The real problem is politics that doesn't give the USPS the flexibility to expand. I live in Brooklyn and haven't gotten a single package delivered on time by the USPS in the past 3 months, always 1-3 days late.
Any normal business hires more employees as business booms, and remember the USPS makes money off Amazon. Unfortunately, the USPS is so hamstrung by politicians that it can't simply expand to meet demand, the way e.g. Amazon Fresh has.
I am worried what's going to happen with big vote-by-mail election. How much chaos will ensue with an overwhelmed USPS?
We've already seen elections with ballot invalidation rates of 25% in NYC with some of the primaries. A lot had to do with postmark dates and signatures.
In my county (in California) there are dedicated ballot boxes that are not serviced by the post office. The ballots are collected from the boxes by county election officials. Is this not a thing in other states?
Washington State is entirely vote-by-mail, and we have the option of returning to drop boxes located at libraries or city halls and well as mailing them in.
My anecdotal observation is that the majority of people use the drop boxes, but that was also pre-pandemic.
I'm more thinking of states that have never voted by mail. We don't understand the protocol, and there's unlikely to be any feedback whether our vote counted. Likely to be many administrative snafus
One of my COVID resolutions has been to aggressively attack every source of junkmail I can find.
I figure, reducing the load in my mailbox (my actual goal; I haaaaate dead-tree mail) will have the collateral benefit of reducing the load on the carrier's shoulder.
I've enjoyed partial success so far, but just fired another volley of unsubscribes yesterday. We'll see.
So far- have you found any particular methods to be the most effective? (Return postage envelopes with a form letter, online tools, other options)
My grandma, who passed a bit less than two years ago is still receiving all sorts of junk mail. I have tried unsubscribing normal ways from some of it (online forms, etc) and none of that seems to work at all.
I do use the "do not mail" junk mail opt-outs which has reduced the volume that comes in both her name and mine, but there's still loads of "previously accepted/subscribed-to mail" that I can't seem to put a stop to- even if I use the publisher/sender's preferred opt-out method.
I used to get a TON of mail for the guy who previously lived at my address. Even eight years after he moved.
So I'd call the various companies and ask them to stop. And one miraculous time, I ended up talking with a rep who told me The Secret. Paraphrasing: "I can remove him from our database, but he'll be back in a few weeks when we do our next import from the credit brokers. That's where you need to focus your effort, try Equifax."
Funny thing was, I could not find a form for "My name is Alice and I swear Bob no longer lives at 123 Main", but I could find a form for "My name is Bob and I swear I no longer live at 123 Main". So I filled that out, didn't sign it, and sent it in.
It slowed to a trickle within a month or two, and all but stopped within a year after that.
The post office has been unduly laden with nonsense financial restrictions by the GOP in two presidencies now (Bush and Trump). Put another way, they've purposefully sabotaged one of the oldest institutions in America in order to crater it on behalf of private businesses.
Are there things that can be changed at USPS? Certainly, but they are not the primary cause of distress for this institution. See also: The current assault against the NHS in the U.K.
USPS sent tens of thousands of ePacket (international air mail) packages by boat recently—supposedly the first time in history they've done that. Instead of shipments arriving in 1-2 weeks, they took 6-12 weeks.
Completely screwed people over. Our organization has now dropped USPS entirely for international shipments, and we spend a few million annually on shipping.
There was also a massive rate increase recently, particularly to the UK, that has made USPS far less competitive compared to other shippers.
Funny, this was the inverse of my experience growing up in Hawaii. UPS and Fedex were an hour drive to get the package. USPS would bring to the post office down the road. I always tried to get USPS whenever I could
I've always thought it inefficient to have mail delivered every day. Doing deliveries every other day seems like would be an easy way to save money. No?
I cannot believe with the decrease in 1st-class mail that the USPS is still running delivery trucks 6 days per week to every house. It's a complete waste of resources.
They should go to 3 days per week, then cut back to 2, and maybe even just 1 per week. Since the pandemic, I have been leaving my mail in the box and getting it Sunday night. You know what I'm missing? Nothing! There may be 2-3 pieces of mail plus some junk mail, and I don't get email delivery of any bills: it's all physical mail.
Most people do not care if they get junk mail plus a few bills every day or once a week. They do care if they get their Amazon packages delivered. So to me, it's perfectly reasonable to delay 1st-class mail and prioritize, uh, "priority mail".
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