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(How is it that UPS (UPS) and FedEx (FDX) can run profitable, successful delivery services while the U.S. Postal Service blunders its way into insolvency?)
1. Its union is too strong. The USPS cannot lay off employees due to union contracts. And in the next four years, union members will get a 3.5% raise and seven (yes, seven) uncapped cost-of-living increases. That's a shocking commitment.
2. It spends too much on salaries and benefits. About 80% of its budget goes to salaries and benefits, writes BusinessWeek's Devin Leonard. Can you even imagine that? Compare that with the 43% spent at FedEx and the 61% spent by UPS.
3. It hasn't raised prices enough. It costs the same to mail a letter to your neighbor as it does to deliver it by snowmobile to the Alaska wilderness. (Yes, the USPS actually does that.) The Postal Service should charge higher prices for longer travel distances.
4. It relies too much on junk and first-class mail. Total mail volume fell 20% from 2006 to 2010. The USPS relies too much on first-class mail for money, and when mail volume falls, its revenue falls as well.
5. It has too many post offices. Most of the post offices around the country lose money. What if the USPS took a page from Starbucks (SBUX) playbook and opened mini post offices at supermarkets, gas stations and retailers like Target (TGT)? Still convenient but with lower overhead. Even better: Nonunion workers can staff those offices, Leonard writes.
6. It hasn't embraced the Internet. Email has been a killer. But maybe the USPS has taken the wrong approach to the Internet. In other countries, Leonard reports, postal services let people pay bills online and even scan mail and send it to customers online.
In Sweden, people can take pictures on their phones and turn them into postcards. People can use their phones to send letters without stamps.
The USPS is incapable of owning up to its problems. And the revenue picture is just getting worse. The service predicts total mail volume will fall from 171 billion pieces a year now to as little as 118 billion by 2020, Leonard reports.
So far, the postmaster general wants to stop delivery on two days a week instead of just one. And he thinks that attrition will shave 20% off of the USPS workforce over five years. That's not going to be enough to stop the bleeding. The USPS needs to change dramatically, and that doesn't look like it's going to happen anytime soon.
Well, for most instances, nobody forces you to use USPS so you're free to send things using other carriers. Maybe just me, but UPS/Fedex has never delivered anything for me for less than a buck.
So I kinda like choices between physical service providers and electronic methods (i.e I'll efile a Fed tax return since its "free" in TT, but print and mail a State return to save the money). What role do you propose the USPS plays in an efile/electronic bill pay (#6) ?
Surely USPS needs to change their model, but ...
all post office locations will eventually be in gas stations. much cheaper than operating a dedicated walk in facility. fedex and ups figured this out long ago.
(How is it that UPS (UPS) and FedEx (FDX) can run profitable, successful delivery services while the U.S. Postal Service blunders its way into insolvency?)
1. Its union is too strong. The USPS cannot lay off employees due to union contracts. And in the next four years, union members will get a 3.5% raise and seven (yes, seven) uncapped cost-of-living increases. That's a shocking commitment.
2. It spends too much on salaries and benefits. About 80% of its budget goes to salaries and benefits, writes BusinessWeek's Devin Leonard. Can you even imagine that? Compare that with the 43% spent at FedEx and the 61% spent by UPS.
3. It hasn't raised prices enough. It costs the same to mail a letter to your neighbor as it does to deliver it by snowmobile to the Alaska wilderness. (Yes, the USPS actually does that.) The Postal Service should charge higher prices for longer travel distances.
4. It relies too much on junk and first-class mail. Total mail volume fell 20% from 2006 to 2010. The USPS relies too much on first-class mail for money, and when mail volume falls, its revenue falls as well.
5. It has too many post offices. Most of the post offices around the country lose money. What if the USPS took a page from Starbucks (SBUX) playbook and opened mini post offices at supermarkets, gas stations and retailers like Target (TGT)? Still convenient but with lower overhead. Even better: Nonunion workers can staff those offices, Leonard writes.
6. It hasn't embraced the Internet. Email has been a killer. But maybe the USPS has taken the wrong approach to the Internet. In other countries, Leonard reports, postal services let people pay bills online and even scan mail and send it to customers online.
In Sweden, people can take pictures on their phones and turn them into postcards. People can use their phones to send letters without stamps.
The USPS is incapable of owning up to its problems. And the revenue picture is just getting worse. The service predicts total mail volume will fall from 171 billion pieces a year now to as little as 118 billion by 2020, Leonard reports.
So far, the postmaster general wants to stop delivery on two days a week instead of just one. And he thinks that attrition will shave 20% off of the USPS workforce over five years. That's not going to be enough to stop the bleeding. The USPS needs to change dramatically, and that doesn't look like it's going to happen anytime soon.
In our small post office in MD they had an automated kiosk that was open 24/7 and could be used to mail small packages, to buy stamps, etc. It was very convenient. I haven't seen any of those kiosks in Raleigh, not sure why...
I wouldn't mind if my mail was delivered once a week. If they could throw most of it diectly into a recycling bin - even better.
In our small post office in MD they had an automated kiosk that was open 24/7 and could be used to mail small packages, to buy stamps, etc. It was very convenient. I haven't seen any of those kiosks in Raleigh, not sure why...
I wouldn't mind if my mail was delivered once a week. If they could throw most of it diectly into a recycling bin - even better.
We have a few Automated Postal Centers.
Two near me are:
Brentwood Station (Brentwood near Capital)
North Ridge Station (Falls near Strickland)
I like my Netflix. Until they stream their entire catalog over the internet, I would still like my Saturday delivery. Other than that I barely use the mail for anything.
I hate the going to the post office. The arrogance kills me and for God sakes I WILL NOT SIGN MY DEBIT CARD which they force me to every time I use it, which I in turn use a pen that has no ink on it... which, oddly, they accept (idiots).
So, with that said, I still use the USPS on occasion to mail bills and packages to our kids living in FL. I drive to a "contractor" Post Office in the Hallmark off Falls of the Neuse Rd. Hallmark employees are very nice and offer every single thing the Post Offices do plus a smile and good attitude.
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