backtop


Print 67 comment(s) - last by lexluthermiest.. on Feb 11 at 7:50 PM

It will save USPS $2 billion annually

Many aspects of our lives have made a digital transformation over the last decade or so. We no longer rent physical movies from the video store; we watch them on Netflix or Hulu. We no longer get subscriptions for or pick up the daily newspaper; we read the news online. We don't run to the bank as often for daily finances; we jump on our smartphone, tablet or computer for online banking.

The U.S. Postal Service (USPS) is seeing these shifts in technology as well, but can't seem to keep up. Many letters, bills, etc. can now be sent electronically rather than through the mail. Hence, in an effort to save some serious money, USPS will no longer deliver mail on Saturdays starting August 1, 2013.

Cutting mail delivery down to five days per week will save USPS about $2 billion annually. For fiscal 2012, USPS saw a net loss of $15.9 billion (three times the loss record one year previous).

While mail delivery is getting axed, USPS plans to continue package delivery on Saturdays since this particular area has seen a 14 percent increase since 2010. Mail will also still be delivered to P.O. boxes six days per week as well.

In addition, post offices will remain open on Saturdays to allow customers to drop mail/packages off, access post office boxes or buy postage stamps -- although hours will likely be cut.


USPS is expected to give an official announcement today without explicit congressional approval. Lawmakers have said this approval is necessary for a change like cutting Saturday mail delivery, but the USPS is arguing this claim.

As far as the American people go, USPS expects some opposition from those like rural communities that worry a change in scheduling could make low-cost deliveries of items like medication a thing of the past, and publishers who will have to adjust schedules with publication deadlines.

Just last month, it was reported that USPS wanted to be more digital-friendly in order to keep up with the times. The agency is working on a digital platform called MyPost, which will allow customers to log in and view all packages that they'll be receiving as well as those they've already received instead of searching several different sites that the packages may be coming from.

However, Paul Vogel, president of digital solutions at USPS, revealed that his office is like "a San Jose startup," with only 15 Android/Apple developers, consultants coming and going, one computer and his BlackBerry smartphone. Technological restrictions make upgrading hard to come by.

A few other major obstacles are legislation needed to get permission for new digital products, the USPS' huge instruction manual for just handful of current products (adding digital products and security certifications would turn that 1,500 page book into something unimaginable), and USPS' losses of nearly $16 billion last year led to legislative proposals to keep making cuts (hence, more digital tech may not be in the cards right now).

Source: Boston Business Journal



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

Dont blame the internet and email
By Manch on 2/6/2013 10:38:39 AM , Rating: 2
It's piss poor management, improper handling of packages, theft, crappy customer service, and a horrible claims process.




RE: Dont blame the internet and email
By GotThumbs on 2/6/2013 10:45:12 AM , Rating: 2
Good afternoon Mr. Negative.

Best wishes and I hope you feel better soon.


RE: Dont blame the internet and email
By GulWestfale on 2/6/2013 10:49:39 AM , Rating: 4
maybe he's being negative, but i think the US post missed the boat on adapting to new markets and technologies. they should have tried much earlier to compete with the likes of fedex and UPS, and streamlined their operations. the same can be said for post services in many other countries, including here in canada.


RE: Dont blame the internet and email
By spamreader1 on 2/6/2013 11:21:51 AM , Rating: 2
While I don't disagree on should have been done, the root of their problems have been that Congress has to approve any major changes that the USPS makes. Many times they have gone to Congress to get these issues addressed and were shot down.


RE: Dont blame the internet and email
By othercents on 2/6/2013 2:07:43 PM , Rating: 2
Yes it is definitely Congress calling the shots. You can see it in their "funny" math.

quote:
Cutting mail delivery down to five days per week will save USPS about $2 billion annually. For fiscal 2012, USPS saw a net loss of $15.9 billion (three times the loss record one year previous).


I don't see saving $2 billion annually making up for the $15.9 billion net loss especially if we expect another 3x record loss from last year.


RE: Dont blame the internet and email
By Solandri on 2/6/2013 5:28:23 PM , Rating: 5
Most of those losses are paper losses - pre-payments for paying out future employee benefits. Right now they're basically stuck making 75 years worth of pre-payments in 10 years due to accounting tricks to try to make the Federal deficit look smaller. It's not like their actual operating costs (with pre-payments properly amortized) is resulting in a loss. The problem has been known about for over a year.

http://redtape.nbcnews.com/_news/2011/10/07/819142...


By nshoe on 2/7/2013 11:54:45 AM , Rating: 2
Perhaps in 2011 but in 2012 even if you remove the pre-payments they had a $2.4 billion operating loss.

http://www.usatoday.com/story/news/nation/2012/11/...


By retrospooty on 2/6/2013 11:42:51 AM , Rating: 2
"maybe he's being negative"

He may be, but he is definitely right.


RE: Dont blame the internet and email
By xti on 2/6/2013 12:44:29 PM , Rating: 2
idk, they let people (and more importantly, companies) print their own postage at home, via tech.

now less mail boys are running to the post offices, and all those post offices in our neighborhood are living off PO boxes and shipping grandma a new bra.


RE: Dont blame the internet and email
By Gio6518 on 2/6/2013 10:55:54 AM , Rating: 3
quote:
Good afternoon Mr. Negative


What he's absolutely right....I shipped a package the 22nd of January to be delivered the 23rd, it got misrouted and they attempted delivery on the 26th which was a Saturday...well the business was closed on Saturday, they left a note on the door, they wont pick it up. Post office won't re-deliver unless they get authorization. So I called to give authorization for re-delivery on the 29th, still not delivered, continue doing this on a daily basis, and today is Febuary 6th and guess what its still sitting there...


RE: Dont blame the internet and email
By DT_Reader on 2/6/13, Rating: -1
By geddarkstorm on 2/6/2013 12:39:28 PM , Rating: 5
I think you missed the entirety of his post. He is the one who shipped the package to a business. How can he "go get it" when it's the business he shipped to that needs to get it?

The system is definitely archaic at points, and with all the wealth of technology available, issues like this could be far better handled. That's the point.


By Schrag4 on 2/6/2013 12:44:10 PM , Rating: 2
LOL so if he shipped it to another state he should drive to that state, get the package, and finally delivery it? I think maybe you missed something.

Even if it was being shipped to HIM, though, if the carrier was responsible for delivering it on a certain date and missed it by several days, I think if they want return customers they should go the extra mile and deliver it when it's convenient. Of course this is the government we're talking about so they have absolutely zero, zip, zilch incentive to keep customers happy, and THAT is the point.


By Gio6518 on 2/6/2013 4:07:04 PM , Rating: 2
quote:
So, go get it. You've known where it is for 10 days. If it's that important go get it.


It's 1700 miles away....I did think about it though, but couldnt get the time off...


By GotThumbs on 2/6/2013 4:32:34 PM , Rating: 2
I feel for you, but to be honest, I wouldn't have sent it USPS if it absolutely had to be there that soon.

FedEx and UPS specialize in package delivery. USPS deals not only with packages but millions and millions of letters and junk mailers.

One day delivery is NOT a USPS specialty, even if they offer it, and weekend deliver is even trickier.

Realistic expectations would tell me....USPS is not the Go-To when it absolutely has to be there the next day. I'm sure USPS was less expensive than FedEX, but you had to weight the cost with the importance of getting it there overnight.

Sorry again for your experience but I think you put too much trust in them getting it there that fast.


RE: Dont blame the internet and email
By Manch on 2/6/2013 10:59:21 AM , Rating: 2
Good afternoon! My work day is about done so I will feel better shortly. I'm not being negative that's just how it is. Just for APOs alone the USPS has well over a million in outstanding claims! andwe're not talking about comparatively to the lower 48 a large group of people. We're still using very antiquated machines built by Lockheed martin that cost an arm and a leg. Floppies anyone? USPS refusal to modernize has hurt it. We also have brand new equipment from 2006 still sitting in boxes waiting to be installed. Now we have more new equipment coming supposedly and they paid a pretty penny for the 2006 equipment.

Also, a lot of vendors prefer UPS/FedEx over USPS bc the USPS will not guarantee your items will not be damaged. Sure you can insure it, but good luck on the claims process.


RE: Dont blame the internet and email
By EnzoFX on 2/6/13, Rating: -1
RE: Dont blame the internet and email
By KCjoker on 2/6/2013 9:07:41 PM , Rating: 2
LOL, wow so now it's republicans fault that the USPS is horrible? Care to back that up with facts?


RE: Dont blame the internet and email
By anactoraaron on 2/6/2013 11:53:56 PM , Rating: 3
That's simple. A republican president signed the bill into law. That's the same reasoning for everything obama is guilty of. Also I believe Tom Davis (R-VA) sponsored the bill. It has already been posted that this bill (the Postal Accountability and Enhancement Act) is the reason that the USPS is broke now, after running for 225 years in the black.


By Reclaimer77 on 2/7/2013 1:17:25 AM , Rating: 1
Right, it's the "Republicans" fault that E-mail is kicking the ass of snailmail. And only an idiot would ship USPS when there's FedEx and UPS around. Nice spin....


By JediJeb on 2/6/2013 10:14:44 PM , Rating: 2
Are you sure it is the Republicans and not the Unions not wanting to modernize because it would mean they would need less workers?


RE: Dont blame the internet and email
By Manch on 2/7/2013 2:18:05 AM , Rating: 1
One of the major problems with the USPS other than the ones I mentioned above, is that although it's supposed to be ran as a "private entity" by law they are not supposed to make a profit. With that kind of mandate management has been very wasteful. This just get by mentality has led to some very wasteful decisions.

Blame Republicans? Democrats?

Try blaming management.

If you want congressional stupidity however:

Senator Harry Reid- “Elderly Americans rely on the United States Postal Service… I’ll come home to my home here in Washington and there will be some mail there. A lot of it is what some people refer to as junk mail. But for the people that are sending that mail, it’s very important. And, talking about seniors — seniors love to get junk mail. It’s sometimes their only way of communicating or feeling they’re part of the real world.”


RE: Dont blame the internet and email
By retrospooty on 2/7/2013 10:13:07 AM , Rating: 2
"Senator Harry Reid- “Elderly Americans rely on the United States Postal Service… I’ll come home to my home here in Washington and there will be some mail there. A lot of it is what some people refer to as junk mail. But for the people that are sending that mail, it’s very important. And, talking about seniors — seniors love to get junk mail. It’s sometimes their only way of communicating or feeling they’re part of the real world.”"

/facepalm...

He's right about the elderly, but that isn't a reason to keep a failed system in place. What a moron, and of course he's the senate majority leader... ugh.

They should seriously stop delivering on Tuesday and Thursday as well. 3x a week, M-W-F is plenty for snailmail. If they cant modernize and be efficient, then delivering mail 3 days instead of 6 is at least 1/2 as inefficient.

Now if we can just get Congress to work 1/2 as much we might be on to something.


By Manch on 2/8/2013 1:46:39 AM , Rating: 2
I don't doubt they rely on the USPS for many things but the last part of his statement is just idiotic.

While I cant speak for all elderly, I know my grandfather hated that crap. He said the shiny paper wasn't even useful for starting a fire. It's bad for the chimney and releases too many toxins. He was a chemist.

I agree with the 3day delivery on letters. It would save a good bit of money and time not having to sort, bin all of that daily.


RE: Dont blame the internet and email
By Motoman on 2/6/2013 10:59:27 AM , Rating: 2
Yes and no. Email essentially destroyed the informal letter between friends and family...but that probably was only a tiny percentage of what the USPS dealt with by the advent of the internet anyway.

Unions, bureaucracy, and having to put up with Congress' stupid oversight are probably the biggest problems.

Anyway, cutting Saturday delivery probably isn't enough...my guess is that the USPS should:

1. Only deliver 3 days a week...like Mon/Wed/Fri. No one will notice the difference.
2. Raise the cost on bulk mail. It's by far the biggest burden on them, literally, from a volume standpoint - and volume drives cost-to-serve. Make it expensive enough where a lot of it just goes away because the advertisers don't want to pay that much...then the volume (and cost-to-serve) goes down. Then, whatever remains is more profitable too because they're being paid more to process it. On top of that, citizens will be infinitely happier because they're getting less junk mail...and even the environment is better off because of fewer trees getting killed. Everybody wins.
3. Compete with UPS and FedEx...stores. Obviously, USPS competes with UPS and FedEx delivery services, but look at all the other stuff you can do at a UPS store. Any reason the USPS couldn't do similar stuff? Well, yes...the reason is Congress is in the way of progress.
3a. Bring up the point of removing USPS from congressional control. I'm not sure that privatization is the right answer, but having to plead to Congress every time you want to do something will never work out.
4. Get rid of the unions.
5. ???
6. Profit.


RE: Dont blame the internet and email
By bah12 on 2/6/2013 11:11:17 AM , Rating: 2
See my other post below, but add to your list.

7. Stop using FEDEX as your #1 supplier, by a HUGE margin. Not sure, but when your direct competitor is your top supplier there are some pretty big f'in problems.
http://www.huschblackwell.com/images/PostalResourc...

8. Stop servicing ALL boxes daily for pick-up. Fedex/UPS doesn't come unless I call, why do we still require the USPS to drive around looking for little red signs.

I don't agree with #2, that is the only thing keeping them alive is bulk mailers.


RE: Dont blame the internet and email
By Motoman on 2/6/2013 11:58:34 AM , Rating: 2
quote:
I don't agree with #2, that is the only thing keeping them alive is bulk mailers.


It's incredibly low-margin. That's the problem. Make it cost more to send bulk mail, and the volume goes down - meaning you need fewer resources to process it. And because it costs more, the margin you make on what remains is much better.

A lot of the time you can do this sort of thing and wind up making the same overall revenue number, but have much better margin on it.


RE: Dont blame the internet and email
By bah12 on 2/6/2013 12:14:17 PM , Rating: 1
quote:
A lot of the time you can do this sort of thing and wind up making the same overall revenue number, but have much better margin on it.
Except they would not be allowed by the unions to cut the workforce to make up for the loss in volume. In principal it works, but they are too in bed with the unions to properly lay off the workforce no longer needed. Coupled with the fact that they still have to travel the miles to look for little red flags (and thus cannot lay off any of that workforce), and quite frankly they are better off with the higher volume lower margin as their model does not scale well with volume.


RE: Dont blame the internet and email
By Motoman on 2/6/2013 12:46:11 PM , Rating: 2
Yes, which is why one of my points was getting rid of the union too.


By bah12 on 2/6/2013 12:58:40 PM , Rating: 1
Totally agree there, but if you still require them to drive by each box daily the volume reduction only impacts inter post office miles, and sorting. You'd still have lots of un-productive miles. IMHO they really do need to be allowed by congress to implement a call for pickup model. Do that, and then you can kill all bulk discounts.

Take a look next time you drive out of a subdivision on how many mailboxes have a flag up, yet the postman still has to weave through the entire area looking for them. Luckily he has some revenue generating bulk in his bag or those miles would be all cost.

You and I are on the same page, but I don't think many people really understand just how complex the issues are. It isn't just a management issue. In fact very little of it is. The vast majority of their problems are Congress driven.

Several drastic changes need to occur for them to recover, but alas the union lobby will eventually kill them.


By nshoe on 2/7/2013 12:11:11 PM , Rating: 2
quote:
Make it cost more to send bulk mail, and the volume goes down - meaning you need fewer resources to process it.


The problem there is is already costs less to process bulk mail. I have actually been involved in prepping a bulk mailing that a non-profit I volunteered for was mailing out. You have to use machine readable mailing labels, you have to presort the mail by zip code and bundle based on those zip codes. Basically all the post office has to do is throw the bundle in the correct pile, then sort and deliver at the final destination.


RE: Dont blame the internet and email
By fic2 on 2/6/2013 11:59:57 AM , Rating: 2
The USPS attitude about bulk mailers seems to be we loose money on every transaction but we'll make it up in volume.

I have gotten an offer letter from AmEx every two weeks for the last 8 years. Even after I did the take me off the pre-approved credit card lists AmEx still sends their crap to me. I would be happy if the USPS raised bulk rates at least 1 or 2 cents. From looking at the price list bulk rates can be as low as 12.6 cents - although I didn't make it through all 53 pages of prices.

I get a thing in my mail yesterday telling me what my "official" address is. Well, since I have lived there 15 years I am pretty sure I knew it already. The zip code didn't even include the extended 4 digits that they want everyone to use.


RE: Dont blame the internet and email
By bah12 on 2/6/2013 12:18:21 PM , Rating: 2
quote:
The USPS attitude about bulk mailers seems to be we loose money on every transaction but we'll make it up in volume.
But that has to be their attitude, if there were no bulk mailers how quickly would they run out of money if they were still required to drive by your house every day to see if you had a package to send. At least with bulk they get some revenue daily from your box, without it it would simply be impossible to drive by each day. UPS/FEDEX spends millions yearly to reduce route miles, USPS doesn't have that HUGE leg up, as they are required to re-actively see if you have a letter going out today, rather than proactively only driving by if you call for a pickup.


RE: Dont blame the internet and email
By Dr of crap on 2/6/2013 12:54:44 PM , Rating: 2
Answer, don't have pickup at EVERY address.
Like UPS and FEDEX, use drop off mail boxes for out going mail, then the only reason the USPS trucks need to come to your house would be for a delivery.

AND charge those bulk mailers more. Make them pay more for the truck to go to every address and that will cover the losses they are having.

OR, just get the damn govt out of the way. Nothing messing the post office up more than having to go to the govt,
slow and expensive!


By bah12 on 2/6/2013 1:00:25 PM , Rating: 2
Spot on, but you and I know the union lobby will never let any of this happen. My bet in less than 5 years the USPS will be back on the government teet.


By Solandri on 2/6/2013 5:37:21 PM , Rating: 2
quote:
7. Stop using FEDEX as your #1 supplier, by a HUGE margin. Not sure, but when your direct competitor is your top supplier there are some pretty big f'in problems.

I don't see the problem. FedEx doesn't deliver to every address every day. The USPS does. It makes perfect sense for them to accept money from FedEx to deliver those packages for them. Since they're going to be going to that address anyway, it's very little additional work for the USPS, and the next best thing to free money.

The USPS may want to increase how much they're charging FedEx. But it'd be stupid for them to turn away FedEx's business.


By Mint on 2/6/2013 12:23:41 PM , Rating: 2
I don't see how #1 will help. 10 guys delivering 3 days a week will need more trucks than 6 guys delivering 5 days a week.

Eliminating Saturday delivery, I presume, reduces overtime pay, and that's where the savings come from. Otherwise, it seems to me that reducing hours worked throughout the week is more efficient.


RE: Dont blame the internet and email
By Ammohunt on 2/6/13, Rating: 0
By GotThumbs on 2/6/2013 4:40:12 PM , Rating: 2
USPS pensions are fully funded.

If anything, they are the model everyone else should follow. Many cities are borrowing from its employees retirement funds and then realizes they can't cover the expense of paying it back along with all the other bills.


RE: Dont blame the internet and email
By DT_Reader on 2/6/2013 12:09:25 PM , Rating: 5
It's Congress we should blame. On December 20, 2006, the “Postal Accountability and Enhancement Act of 2006? was passed in both House and Senate. The USPS was required to pay in 10 years (ends in 2016) health benefits of future retirees of the next 75 years. Some of the employees have not been born yet. That's $5.5 billion a year. No other government agency has this burden. No private company has this burden. This was a clear cut move on the part of Congress to cripple the USPS to the point that they could justify privatizing it.


By lufoxe on 2/6/2013 12:24:10 PM , Rating: 5
Don't forget that the USPS is a self funded branch and thus, has no tax burden for you and me. This is the worst law ever cooked up by congress and no private institution would have done that.


By EnzoFX on 2/6/2013 1:55:09 PM , Rating: 3
Republithugs always trying to break USPS. They won't stop until a private company replaces it. It's pathetic. Yes, let's scapegoat the unions! boo, those terrible people!


By AnnihilatorX on 2/6/2013 12:51:37 PM , Rating: 2
I agree
In the UK, the revenue of Royal Mail actually had increased due to increase in e-commence enabled by the internet.


By christojojo on 2/6/2013 8:11:51 PM , Rating: 2
Manch you speaking from your experience as a postal worker? How much did you steal? Just wondering. I mean the poor management I can confirm but I did not wittiness too much in the employee theft zone. They tend to get rid of them quite fast in my area if any are found out. I do know of managers that slept to get promoted but that seems to be more than just a postal thing. I have witnessed an excess in managers seems like my stint there every time they cut a route or two they hired another manager or assistant. then there is the charges for future employees that may never be hired that congress charged them last year.
The postal service is definitely flawed and too slow to adopt to the post pony express era (only a slight exaggeration) but to blame the core employees for it is insulting and not aiming at the right villians.


By lexluthermiester on 2/11/2013 7:50:56 PM , Rating: 2
Seriously? Compared to what? FedEX or UPS? The claims precess with UPS is a little easier, but FedEX? Not! And both of those companies deal with theft and package abuse even more than USPS. So you want to come again with that one?

I am a seller on eBay and PREFER USPS for one simple reason; reliability. I've rarely had to deal with damaged or lost packages. But when ever I but from Amazon or Newegg[both of which use UPS], I have to worry about whether or not my package is going to arrive damaged or arrive at all.

Sorry, mate. USPS is the best carrier in the US bar none.


"And boy have we patented it!" -- Steve Jobs, Macworld 2007














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki