US Postal Service financial woes

[Sparky]

I always wonder why they don't just charge more money. 44 cents per stamp is ridiculously cheap to transport something anywhere in the country in 48-72 hours. Think of all the alternative costs.

Now, I understand the electronic alternative has eaten a lot of their business. But for whatever business remains, don't you think it would withstand a hefty price increase? If you're still mailing paper now at 44 cents, wouldn't you be willing to pay 50 cents? I would.

The USPS got denied a rate increase for 2011, and will be allowed a 1 cent increase in 2012. Aren't first class stamps way undervalued? Again, I'm assuming if you can mail something electronically, you're already doing that by now.

[Ares]

They did it to themselves with cushy retirement plans, and having union labor. They can raise the rates to the sky and I'll still never use it. I use UPS or FedEx whenever I need to snail mail anything. Other than that, bills are paid electronically.

[solid]

If you're still mailing paper now at 44 cents, wouldn't you be willing to pay 50 cents? I would..

I would pay 50 cents as well. I got to know our local postman, good man. I like the personalized service. It's one job they can't export to China. It's a shame the USPS is struggling, but understandable in our digital age. If snail mailing anything, I still use them.

It's the same reason I pay bridge tolls in cash, as opposed to those digital pay scanners. It's quicker to get beeped through, but the cost savings will never be passed down to us anyway, so I'll support the jobs. I'll pay cash, and wish the bridge toll guy a nice day.

[palani]

Cost to mail first class (up to 1 oz I believe) was $.03 for around 80-90 years. Statutory rate is still $.03 and envelopes will still be delivered at this rate. But the U.S. Post Office got sold out to private enterprise (U.S. Postal Service) in the 1970s and they would rather have you believe that you need to pay the current prevailing rate.

The country can thank Lysander Spooner for the $.03 rate. If he hadn't attempted to compete with the U.S. Post Office back in the mid 1800s the rates would have been much higher much sooner.

Certainly has been years since the U.S. government has attempted to communicate with me. They used to send me mail with franking on the envelope (no postage .. just a flattened eagle symbol). The U.S. government I know does not pay for postage. I don't know who these new guys are. They seem to want me to believe they are the same government but actually they are a hollow illusion.

[palani]

As to this new U.S. Postal Service, they are an irksome group. They lie to me all the time. I go in to attempt to have my mail held General Delivery and they tell me this service is only available for 30 days. Actually what they MEAN is they will hold on to a General Delivery envelope for 30 days but what they are conveying is they only provide this service for a TOTAL of 30 days and then you had best be applying for mail service.

There HAS to be a choice of how you have your mail received. Signing up for free home delivery or a PO box is no choice. That is a privilege. Free home delivery (you heard me ... it is FREE ... you only pay from post office to post office) is a benefit that started during the (un)civil war with the quid pro quo being selective service.

That is correct. If you have not signed up for the benefit of home delivery of mail then there is no duty to sign up for selective service. Don't want to get your tail shot off? Pick up your mail GENERAL DELIVERY.

[Ponce]

Don't worry guys, pretty soon you will see the USPOEM (United States Post Office EMail) and to start with they will charge 0.02 cents per page email......your wish will come true......I have seen it.

[Horn]

http://4.bp.blogspot.com/_MJIP4VjZOvU/TURWeB7L_HI/AAAAAAAAAHw/Drp3HQaA-Vk/s1600/junk_mail.jpg

Actually its all Unsolicited.

[solid]

I'm tired of getting junk mail. I received an email awhile back, what they recommend doing, is those prepaid envelopes? Use those to send the big companies all your other junk mail back to them. Send BofA a Chase credit card application, for example. It's all on their dime, and also supports the post office. Your local postman.

Sounds good to me. I'm going to start doing this.

[Horn]

My address is 300 meters south of the brown cantina, which has since turned in to a hair salon and is red.

[Ponce]

I'm tired of getting junk mail. I received an email awhile back, what they recommend doing, is those prepaid envelopes? Use those to send the big companies all your other junk mail back to them. Send BofA a Chase credit card application, for example. It's all on their dime, and also supports the post office. Your local postman.

Sounds good to me. I'm going to start doing this.

Stick the pre paid envelop to a brick and send it back to them.......last junk mail that you will get from them.

[Libertytree]

Thoughts?


http://www.youtube.com/ThePostalRecord#p/u/2/UTfXHTPcEkU

[solid]

Thoughts?]

Thoughts? Maybe going postal is a good thing.

Perhaps, the Post Office would be in better shape if some folks just plain went postal.

[Dogman]

In a lot of ways the postal service is a dinosaur, they got fat and lazy and did not pay attention too trends. Not that it would have done them any good. The internet and all of the ways that people communicate with each other now, is the stake in their hearts. Their business model is for volume physical delivery and other than mail and stuff that can not be sent electronically.

So the net and the other package delivery outfits, ups and FedEx that have a modern business model and are efficient in ways that the us postal service is not, are the winners.

And also the way they spent money like drunken sailors in the way they did business, they really have no way out and against the wall, personal letters are getting about as rare as hens teeth, so mostly all they do is deliver junk mail and monthly bills. They will need to cut hours and delivery days, and do a complete overhaul of their system if they plan to make it.

The less people send mail and use the other delivery company's to send their stuff, the post office will slowly die , no wait they are sorta part of the gov and that will never die a clean death.

[Ponce]

Blame the unions for the troubles of today........if the US post office could do it they would move overseas.

[BabushkaLady]

The USPS got denied a rate increase for 2011, and will be allowed a 1 cent increase in 2012. Aren't first class stamps way undervalued? Again, I'm assuming if you can mail something electronically, you're already doing that by now.

The post office may have been denied a rate increase in 2011, but I believe that was on a one-oz first class letter. The priority and flat-rates have gone up. They're just getting more sneaky in the way they price basic padded envelopes and packages.

As far as assuming everyone's gone electronic; privacy and security dictate that I still use a postage stamp. And NO, I don't feel like paying additional money for their mis-management and monopoly.

[k-os]

My address is 300 meters south of the brown cantina, which has since turned in to a hair salon and is red.

And to think, this is one of the few posts of yours that I understand, and could actually be true. ;)

[1970 silver art]

In a lot of ways the postal service is a dinosaur, they got fat and lazy and did not pay attention too trends. Not that it would have done them any good. The internet and all of the ways that people communicate with each other now, is the stake in their hearts. Their business model is for volume physical delivery and other than mail and stuff that can not be sent electronically.

So the net and the other package delivery outfits, ups and FedEx that have a modern business model and are efficient in ways that the us postal service is not, are the winners.

And also the way they spent money like drunken sailors in the way they did business, they really have no way out and against the wall, personal letters are getting about as rare as hens teeth, so mostly all they do is deliver junk mail and monthly bills. They will need to cut hours and delivery days, and do a complete overhaul of their system if they plan to make it.

The less people send mail and use the other delivery company's to send their stuff, the post office will slowly die , no wait they are sorta part of the gov and that will never die a clean death.

The USPS will be a "zombie company" as long as the gov't is there to keep it on "life support".

[Sparky]

...
As far as assuming everyone's gone electronic; privacy and security dictate that I still use a postage stamp. And NO, I don't feel like paying additional money for their mis-management and monopoly.

If you feel that paper mail provides you privacy and security, how can not not feel that a 44-cent stamp is one of the best values out there? If they go out of business tomorrow, what will be your option?

[Sparky]

I'm not sure I give a rat's ass if they are mismanaged. For 44 cents, I can drop a letter into a box in my neighborhood, and someone will pick it up and deliver it to the door of my friend's house 2000 miles away in less than 72 hours. Are you fukking kidding me? If that service were not available, my cheapest alternative would be to fly there for $500 and hand it to him, or take four days off from work and drive there and back for $450 of gasoline. 44 cents!

What the hell else can I get for 44 cents? I can't get a pack of gum or a candy bar for that price. I can't get a cold soda, or a pair of shoe laces, or a spool of thread, or a ball point pen, or a cheap cup of coffee. I couldn't even make a cup of coffee at home for that price, factoring in cream, sugar, and a paper cup to pour it into. 44 cents!

[Dogman]

If you feel that paper mail provides you privacy and security, how can not not feel that a 44-cent stamp is one of the best values out there? If they go out of business tomorrow, what will be your option? One fact about paper and what is printed or written on it , All things considered, it could last for 100's of years if taken care of and is not acid paper. And all you need is a pair of eyes or at least one. Plus you do not need electronics and the power to run them.

[BabushkaLady]

Seriously!!

They've raised rates a lot over the years. Just looking at it as a percent on my bottom line I don't like any price increases. More for them, less for the business.

Again I stress that they are hiding most of their increases in small packages which used to be considered "envelopes."

The sad truth is, we can't consider .44 a bargain. This thinking only works if we look at the "few" letters you send per year. When the businesses can't afford postage, then "your" bargain will be gone, too.

[solid]

The sad truth is, we can't consider .44 a bargain. .

What would be a bargain then? I'm with Sparky.

To further that point...the next junk mail prepaid envelope I get. I am going to stuff everything I can into that envelope, and mail it. Rocks, junk mail, random trash, it's all going in...yeah!

[Dogman]

What would be a bargain then? I'm with Sparky.

To further that point...the next junk mail prepaid envelope I get. I am going to stuff everything I can into that envelope, and mail it. Rocks, junk mail, random trash, it's all going in...yeah! Just do not use any white powders or any color. That would not be a good move. Even if there is no return address.

Hell send them back the stuff they sent you in the envelope supplied, Be the same as return to sender and will cost them.

[Horn]

And to think, this is one of the few posts of yours that I understand, and could actually be true. ;)

Actually I lied a little on that one, but its real similar.

You're much too scary to let know exactly where i live. :eek:

[Horn]

Ps. whatever happened to that traitorken guy?

I remember mentioning to him that when junk mail stops in the U.S. that shtf will be soon.

[k-os]

I'm not sure I give a rat's ass if they are mismanaged. For 44 cents, I can drop a letter into a box in my neighborhood, and someone will pick it up and deliver it to the door of my friend's house 2000 miles away in less than 72 hours. Are you fukking kidding me? If that service were not available, my cheapest alternative would be to fly there for $500 and hand it to him, or take four days off from work and drive there and back for $450 of gasoline. 44 cents!

What the hell else can I get for 44 cents? I can't get a pack of gum or a candy bar for that price. I can't get a cold soda, or a pair of shoe laces, or a spool of thread, or a ball point pen, or a cheap cup of coffee. I couldn't even make a cup of coffee at home for that price, factoring in cream, sugar, and a paper cup to pour it into. 44 cents!

I think you make some excellent points, but really, your next cheapest option is fedex or ups.

I have a book of stamps that I bought in January, and I have used exactly one stamp. One stamp a year . . . I guess it's people like me that are screwing up the USPS. Well, at least I bought a whole book of stamps. Forever ones, too, so I can keep using them at this rate until 2021.

[mightymanx]

http://www.financialsense.com/node/3628



Forever Stamps Tell Us Much



By Peter D Schiff (http://www.financialsense.com/contributors/peter-d-schiff)12/31/2010


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The United States Postal Service announced this week that all future first class postage stamps sold will be the so-called "forever stamps" that have no face value but are guaranteed to cover the cost of mailing a first class letter, regardless of how high that cost may rise in the future. Currently these stamps are sold for 44 cents, but will increase in price if and when the Post Office hikes rates.
Apart from sounding the death knell of the one cent stamp, the news is interesting on two fronts: it provides insight into remarkably irresponsible government accounting, and it provides investors with the most attractive Federally-guaranteed inflation protected asset available on the market today.
Over the past fifty years, the USPS has raised the rates on first class postage 20 times. During that time the stamp prices have gone up more than 1,100%. Given the increasing frequency of rate hikes (three in the last four years) the Post Office claims it made the move to forever stamps to save money on printing costs and to increase customer convenience. The public seems to appreciate the product and has snapped up a staggering 28 billion forever stamps since they became available in 2007.
But the real reason behind the permanent switch is that it allows the Post Office to hide its insolvency behind phony accounting numbers, setting itself up for a massive taxpayer financed bailout in the not too distant future.
Much the way Greece used phony accounting to qualify for euro zone inclusion, the USPS is using creative accounting to avoid making significant cuts in current wages and benefits. By offering forever stamps, the Post Office moves forward future revenues to pay current expenses. But every forever stamp sold today represents a stamp not sold in the future. The revenues booked now will not be put in escrow to deal with revenue shortfalls that are guaranteed to plague the Post Office in the years ahead. This simply kicks farther down the road any intractable fiscal problems that the USPS can't solve through more conventional means.
The Post Office also ignores that their ability to sell higher priced forever stamps in the future will be restricted. Those individuals and institutions who hoard the stamps now could offer them for sale in competition with the Post Office. Even though the Post Office will not redeem forever stamps for cash, there is no law against reselling them for whatever price the market will bear. How many forever stamps will the Post Office be able to sell at full price if customers can buy them at a discount on Ebay?
On that note, forever stamps provide the most conservative investors with a much more attractive alternative to zero interest checking accounts, low yielding Treasury bonds, or even inflation protected government securities (known as TIPS).
Given these stamps will always be completely liquid, the only way an investor can lose money on forever stamps is if the price of postage goes down. There may not be a single human on the planet who thinks that this is a likely scenario. On the other hand, if postage rates rise with inflation then the stamps are a very, very safe bet.
And unlike Treasury bonds or TIPS, investors do not have to pay a premium above face value for the privilege of buying stamps. While it is true that stamps do not pay interest, the extremely low rate offered by government securities should not fundamentally alter the investment calculations comparing bonds with stamps. More significantly, stamps are backed by an actual tangible service, postal delivery, whereas U.S. Treasury debt is backed by nothing but a printing press.
Forever stamps are about as close to a sure thing as most people will ever get. Over the past 10 years stamps are up 29%, while the S&P 500 is up a measly .1%. With labor and other costs continuing to mount inside the Post Office, there can be little doubt that many price hikes are coming. Minimum investment in forever stamps is just 44 cents, with no brokerage fees. Plus as an added bonus, if you use the stamps yourself, you pay no income tax on your capital gains.
Sure, without a federal bailout (http://www.financialsense.com/node/3628#) there is a chance the Post Office will go under, and those forever stamps will end up lining bird cages. However, given the track record of government bailouts and the clout of unionized postal workers, chances are very high that the Post Office will always get the bailouts it needs. As a result, forever stamps are a better bet than Treasury debt. They also have prettier pictures.

[Sparky]

I think you make some excellent points, but really, your next cheapest option is fedex or ups.

I have a book of stamps that I bought in January, and I have used exactly one stamp. One stamp a year . . . I guess it's people like me that are screwing up the USPS. Well, at least I bought a whole book of stamps. Forever ones, too, so I can keep using them at this rate until 2021.

What I meant was that if there were no such mail service alternatives provided (USPS, FedEx, UPS), the cost to an individual would be outrageous. So it's great that FedEx and UPS will deliver something for just a few bucks. But the fact that USPS will deliver something for 44 cents is off the charts! For the service they provide, how can that not be considered an incredible value, if you need/want that particular service? So with people like you screwing up the system <just kidding>, it's totally reasonable that they should be able to raise their rates considerably in order to survive, and they shouldn't be considered greedy or idiotic for doing so. It just seems overwhelmingly logical, yet they aren't allowed to do it, and people still complain about the price!

[Sparky]

Regarding Forever stamps, these are not foolish on the part of USPS, any more than the bank is foolish for taking your deposit and paying you interest to hold your money. It's the same idea, except with the USPS, they have the real benefit of not having to roll out a new stamp rollout every time the price goes up a penny.

As Cobalt pointed out, and Libertytree posted a video, the real problem is that they have been forced by the gov't to pre-pay retirement. That's what's sinking their ship.

[Horn]

http://www.youtube.com/watch?v=uuSZaW02Q-M&feature=related

[k-os]

What I meant was that if there were no such mail service alternatives provided (USPS, FedEx, UPS), the cost to an individual would be outrageous. So it's great that FedEx and UPS will deliver something for just a few bucks. But the fact that USPS will deliver something for 44 cents is off the charts! For the service they provide, how can that not be considered an incredible value, if you need/want that particular service? So with people like you screwing up the system <just kidding>, it's totally reasonable that they should be able to raise their rates considerably in order to survive, and they shouldn't be considered greedy or idiotic for doing so. It just seems overwhelmingly logical, yet they aren't allowed to do it, and people still complain about the price!

Hey, I said that you made some excellent points!

[reststop]

As Cobalt pointed out, and Libertytree posted a video, the real problem is that they have been forced by the gov't to pre-pay retirement. That's what's sinking their ship.

One article I read said the USPS has lost money 24 of the last 38 years. Recently I believe Congress has rescinded the requirement to fully fund retirement benefits, which has only been since 2005. Even so that requirement only accounted for approx. $5 billion of their loss. Their last deficit was on the order of $10 billion. It would appear that the only way the USPS can exist is to be heavily subsidised by the govt. The 44 cents to mail a letter may indeed be a good deal but I fear there are hidden costs we all bear whether we want to or not.

rest

[Horn]

The 44 cents to mail a letter may indeed be a good deal but I fear there are hidden costs we all bear whether we want to or not.

Its either that, or they need to go solicit for more unsolicited Junk mail.

As its the bulk cash crop of the operation.

[Dogman]

Its either that, or they need to go solicit for more unsolicited Junk mail.
As its the bulk cash crop of the operation.

Some of the news print flyers are great for wiping/cleaning out my cast iron after use! They have not seen soap/water for cleaning, from the first day of use. Wipe them out while still very hot, and re-oil/lard them.

[Neuro]

.44 cents to send a letter is extremely cheap, in Sweden it would be about 3x that, and Sweden is a much smaller country...

[beefsteak]

I have 4 pet peeves/rants about PO continuous lament they are losing money....

WHY is the Postal Service retailing geegaws, magnets, keychains, lapel pins, teddy bears etc., that NObody wants, and they never get their mfg costs back out of. Why on earth is the PO selling teddy bears???

My 2nd rant is the creation of MUSLIM stamps at Christmas time so that their wittle biddy feelers don't get ruffled. The post office never puts a mennorah behind the madonna or the Christ child, but they are happy to put vile muslim imagery "in the stamp queue" for customer relations.

My 3rd pet peeve is them insisting on printing on the inside of their boxes not only the words indicating it is for USPostal use only....all over the place internally, but also printing the THREAT that it MAY be illegal to use their FREE boxes supply for any other carrier or purpose.

My 4th rant is: what's all this bi-lingual crap in all the post offices? If you're in America, then learn English, fools! Or go home where someone gives a crap about what you want and are trying to say.

FREE isn't free. And stupid ink printing all over creation internally isn't free either. DUMP the Teddy Bears Retailing Chinese Crap, and your free boxes program and stop the horrendous printing ink waste stupidity and ALSO the bilingual crap. THEN come talk to me about the need for postal increases and how much you want more counter retail users!

[Horn]

Now that all the mortgages have been packaged with your neighbors and sold,

there is no reason for us not to switch address with the guy down the street.

Effective SHTF location deterrent.