Prediction for 2011 from Fox Business News

Charles Payne made the following prediction on the Fox Business News website. 

"UPS and FedEx will enter into a bidding war for the Unites States Postal Service. The deal is close, but unions balk."

The prediction provides another illustration of how difficult it will be to fix the Postal Service, when commentators are paid to make statements that have no basis in reality.

So what is wrong with this statement:

• There is no business reason for UPS or FedEx to buy the Postal Service.    The markets that the Postal Service serves best (advertising and document delivery) are markets that do not fit into either FedEx's or United Parcel Service's business of marketing parcel delivery, air express and cargo transportation, truck transportation, and global logistics. 
   
• UPS and FedEx find not owning the Postal Service to be profitable. UPS and FedEx make money providing air and other transportation services to the Postal Service and using the Postal Service to deliver light weight parcels to households.   Buying the Postal Service would add additional management challenges and could put the benefits of the current relationship with the Postal Service at risk.
  
  
• Both FedEx and United Parcel Service have corporate cultural issues that would keep buying the Postal Service off the table.  FedEx has made numerous purchases of existing firms in the past in trucking, logistics, and retail printing services.  None of its purchases have been unionized firms and it would seem unlikely that FedEx would start with the Postal Service.  
  
  United Parcel Service has a close working relationship with its union, the Teamsters and adding the Postal Service could create conflicts between Teamsters and Postal Union leadership.   New labor agreements that the Postal Service will sign in the next year will likely result in wage and benefit structures that are not as generous as what UPS offers its delivery drivers.   Adding the Postal Service could create unwanted pressure to raise wages and benefits to levels offered to Teamsters by UPS.  (The higher compensation levels would likely be linked to strict performance standards and flexibility in the use of part time workers that does not currently exist at the Postal Service.)
  
  
• Both FedEx and United Parcel Service understand that buying the Postal Service requires fixes to retiree benefit issues recommended by the USPS-Office of Inspector General.     Purchase of the Postal Service, or for that matter privatization requires a clean balance sheet  and sufficient cash flow to allow the private owner to use profits to invest in plant, equipment, training, and transition costs.    The current payment schedule does not allow for investments needed to make the Postal Service a financially viable private sector firm.

There are probably other reasons why this idea makes no sense.   Given how bad Mr. Payne's prediction was, clearly business stakeholders in the future of the Postal Service should spend some time working with the commentators, producers and  on-air hosts at Fox Business Channel, CNBC, and other influential business news sources that do not regularly cover the Postal Service in order to reduce the noise that could prevent progress in passing legislative changes necessary to ensure a viable postal industry for then next decade.