Thursday, March 4, 2010

Is the Postal Service Destined to Fail?

Minyanville has a fresh observation of the risks that a failing Postal Service would have for the American economy and the companies that rely on it today in the column, "Why the USPS is destined to Fail". 

The article describes how the use of mail has changed base on a quote from the Seinfield character, Newman

 “Because the mail never stops. It just keeps coming and coming and coming. There's never a letup, it's relentless. Every day it piles up more and more, but the more you get out, the more it keeps coming. And then the bar code reader breaks. And then it's Publisher's Clearinghouse day!” 

This quote fairly describes the nature of the demand for mail when Seinfeld was on television between 1989 and 1998.  The nature of competition for document and parcel delivery is not longer the same as it was in the 1990's.  The forecast completed by Boston Consulting Group suggests this quote will be even less descriptive of the Postal Service in 2020.

The Minyanville article identifies some surprising losers if there is not a successful transformation of the USPS.Losers if there is not a successful transformation of the Postal Service into a viable enterprise,   The losers the article identifies include:
  •  FedEx and UPS who transport mail by air and rely on the USPS for delivery of parcels under 5 pounds
  • Amazon,  NetFlix and Ebay that rely on the Postal Service for handling deliveries
The article just touches the surface of the economic impact of the failure of the Postal Service.   Numerous business both large and small that focus on serving limited geographic areas (e.g. pizza delivery, dentists, furniture retailers, opticians, and home repair firms) use mail as their primary means of advertising.   Replacing the USPS with alternative delivery would be difficult for either the losers that Minyanville identified or those that were not.  

The Minyanville column suggests that the Postal Service will Fail because the legislative and regulatory process will not move fast enough to allow the Postal Service to handle a wave of change that is similar to what has already devastated newspapers and magazines.  This viewpoint is not without merit as the Postal Service's proposal is similar to other proposed policy changes designed to transform an industry in that the benefits are diffuse (i.e. all businesses and households that would use a universal mail delivery network in 2020), and the costs are concentrated (i.e. job cuts, higher postage rates, changed retail presence).   Those who will bear the costs will find it easy to raise the funds necessary to argue why change is not necessary or harmful to the nation's interests.    Those who receive the benefits most likely will not even realize the value of the change to themselves or their business and will likely be silent.

Change will require champions in Congress and the White House, and a significant independent record available for those champions to use.   While the studies prepared by the Accenture, Boston Consulting Group, and McKinsey and Co. provide some of that record, more work needs to be done confirming their findings in order for change advocates to prevail.


Anonymous said...

The Management at the top in Washington has to realize the Postal Service is a "SERVICE" and go back to being such instead of trying to be a business like most Fortune 500 companies. FedEx, UPS, and other couriers are not going to deliver to every home in the USA for 44 cents. If the Postal Service fails, citizens who live in rural, urban areas, etc. will not get service (or be charged outrageous fees for delivery to their homes). The Postal Service has a lot of problems like high labor costs, top heavy management. Some of the employees in the processing plants have become complacent and barely want to come to work or do their jobs. The carriers for the most part do an excellent job and are under more and more pressure to get the mail out in less time. The Postal Service has many employees in the Plant who are on limited duty...who can't do their jobs and still get paid. Older workers who are eligible to retire won't because of the economy and are waiting for a buyout similar to GM and Chrysler, but are being told it won't happen, so they are staying put. Something has to be done soon to overhaul the Postal Service, or it definitely will fail.

anymanhere said...

So very true. I carried mail, was a mailhandler and now in management. The Carriers in my opinion are underpaid. It is definitely the hardest job physically and mentally. Imagine going out everyday no matter what the weather brings while in the plant they make abut the same. Your assessment of the plant is very true and real. I think it is a shame that there are so many people especially in the plant that claim life long injuries. If there really is an injury I have no problem with that but I have heard people say that they were going to get restrictions so they wouldn’t have to run the DBCS’s. I not saying that running the machine is easy but if Firefighters, Construction Workers, Police Officers and other jobs that are very physical had as many people claiming injuries, and I know they don’t, we would have a serious problem. I have been with the service 26 years and my back hurts sometimes, knees and other extremities but I am not going to try to make the USPS pay for everything. You see it is call wear and tear. And with the economy the way it is people should stop complaining and be happy that they have a secure job with good benefits because there is definitely a line waiting to take the job. Plant people come to work. Sick leave is used without regard and really this is not very smart. When I started I made about half of what I make now so the sick leave I saved is worth a lot more now and not only that, it is for when you are really sick. So many people in the plant use so muck sick leave and sick leave without pay, and annual in lieu of sick leave that sometimes they start the year with a negative annual leave balance. Did you know that management and craft can sell back annual leave once every year and get cash. And as far as sick leave goes, some jobs don’t allow you to accumulate sick leave. It is taken at the end of every year. I am proud that as one of the first FERS employees, January of 1984 I will have 2000 hours of sick leave in a few months. Most of my time has been spent in craft, not management and other workers called me stupid for saving my leave because before Obama signed the law that credits FERS sick leave toward retirement you lost it when you retired. Who’s stupid now? Maybe I will need it or maybe not but is sure good to know that for one year my life would be covered if I couldn’t work, and if I don’t need it, credit another year towards my retirement. I read these articles a lot and there are so many unhappy postal workers. How about saying something positive about our place of employment? Times are hard people and they are harder for the unemployed. Think about that.

Anonymous said...

Obviously written by a carrier! Your article started out clear and correct. Management top heavy, should go back to "service", competition would drive rates very high if we failed.
Now to correct you. Try working nights. At my midsize office(where you can't buy a stamp except when the windows are open) we have 5 mini deadlines and 1 major to process all the mail and get it ready for the carriers. Hopefully the carriers wont hide it in their closets. Did that sting? Yes, we have some older employees. They are getting an extra 2% added on to their retirement per working year. Don't judge them, you'll be in their spot someday too. 300,000 cuts in the next 10 years-do you think it will be by natural attrition itself?

anymanhere said...

Wrong ananymous, I have worked tour 3 for 12 years and tour 1 for 4 to five years. I got lucky. I went thru the last ASP program and got RIF'd and I am now on days where I first started as a carrier. You see my perspective doesn't come from one angle like most people writing on these comments, I try to be fair and look at the whole picture. How many different angles can you see from?

anymanhere said...

I do agree with you on the ridiculous 5 minute rule. People need to realize that a lot of the transaction that we do can't be accomplished in 5 minutes like a passport or several certified letters to one customer, In fact more than that. I am at a small AO and have an IRT. I do think it is funny that we always attack management; it is like people voting down a school levy, the only thing sometimes they think they can control. You and I both know that without supervision and I don't care where you work, you would have more problems than we have now. I not saying it is the best because I don't get along with all of them too, but you and I both know we feel the same way about some of the people we work next to...worthless...take care