Sep 05 2011

A Sign Of Our Times – The End Of USPS

The postal service has a warm and special place in our social history. From the Pony Express of the wild west to the diligent and unfailing service of the last century, the only means of affordable, long range communication was the US Postal Service (USPS). Heck, it even came to the rescue of Santa Claus one year. But ever since the internet came alive around 1990, and with the arrival  of modernized and commercial package shipping companies like Fedex and UPS and the like, the role of the United States Postal Service has dwindled.

As long as it was a federal government-run entity, The USPS was doomed to failure when faced with such private sector competition. That is because the federal government is obsessed with process, not product. I have been a contractor to the federal government my entire career, and I am successful because I can help them produce something worthwhile despite the fact the government only considers success when process is followed, not when something that works is produced or a value-added service is performed. Following the endless reams of government process is now the focus of the bureaucracy, all else is secondary and can be sacrificed.

That is why government wastes so much money. It’s obsession is process, not winning over the most clients or customers. The inability to provide for innovation (actually to even get permission to innovate) is why the USPS was doomed. Instead of sparking their workforce to compete, they pay them to sit around and do nothing:

Where else could you get paid a decent salary for sitting in an empty room, doing absolutely nothing?

Standby time cost the Postal Service about $30.9 million in 2009, the equivalent of some 1.2 million hours. The semi-independent government agency paid out $22 million in 2010 in standby time, according to the Office of Inspector General.

So, while the post office idles its people in a lame move to avoid layoffs, the private sector uses incentives to constantly evolve and stay current.   And so this news story is no surprise at all:

The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year.

By the way, $9.2 billion is almost 2/3rds of the NASA annual budget and would have easily covered the cost of replacing our aging shuttles with the new Orion crew vehicle – and then some. That’s right, the waste in USPS alone would have continued our leadership in human space exploration.

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors.

The USPS has become obsolete. It now exists on the bottom-feeding and wasteful bulk mail advertising that swamps our mail boxes, and which heads straight for the paper recycling bins unread. It is a huge economical and ecological waste. Internet technologies make communication easy, cheap and instantaneous. Fedex, UPS and the others own parcel shipping. As I wrote last fall, the best thing now for USPS is for its resources to be auctioned off to the commercial sector, where its workers can become more than a cog in the government machine. The privatization of the USPS would bring much needed revenues INTO the government, instead of this dying institution being a mammoth money sink.

I have warm and nostalgic memories of the USPS at its pinnacle. Bur like the 8 track tape, even the most successful and important runs in history come to an end (and no, the 8 track tape was not an important run – I was thinking more like Greece or Rom).

How the two parties address this challenge is going to be indicative of their futures as well. This is a prime example of government waste that can be eliminated in a controlled and humane manner. I would wager 30-40% of the government is in similar shape – too caught up with process and thus completely failing in their mission. I work for these kinds of programs all the time, trying my best to get them out of the ditch and back on the road. It is becoming harder and harder each year, despite the ease of leveraging new, affordable and proven technologies. Process first, then results if there is time.

One party is going to try and fix the USPS, pretend time does not march on to the future and evolution does not occur. And the other party will be demanding we put our limited resources into yet-to-be-discovered ideas and approaches, which continuously spring from Main Street when Wall Street and DC get out of the way.. One party is right and one is wrong. One has a political future, and one is going the way of the Dodo bird and USPS.

Update: More good discussion over at Hot Air, especially on the union stranglehold and lethargic government oversight.

16 responses so far

16 Responses to “A Sign Of Our Times – The End Of USPS”

  1. Mike M. says:

    I’m ambiavalent, AJ.

    On the one hand, the parcel carriers are sometimes (not always) more economical then USPS. On the other hand, the parcel carriers have the right to decline a package for any reason – including the fact that it needs to be delivered to the middle of nowhere. There has to be a carrier of last resort, and the Post Office traditionally took that role.

    Having said all that, I agree 100% on the Federal Government’s obsession with process over product. I’ve worked for the Navy since 1980, and it has driven me up a wall – especially since that obsession has become more pronounced lately.

  2. AJStrata says:

    Mike M – If wasting $9.2 billion is not enough to get your attention and make hard decisions I have no clue what will. You find ten of these and you save $90 billion. 100= nearly $1 trillion. There are easily more than 100 of these in the federal bureaucracy.

    Ambivalence is why we have this mess.

  3. […] (Ann Althouse)he just seemed to shrink up into the chair AnneQuote of the Decade Charlie MartinA Sign Of Our Times – The End Of USPS AJStrataThe end of the Post Office? (Ann Althouse)So you’re telling me […]

  4. lurker9876 says:

    Looks like the biggest culprit blamed by Hot Air posters is the Union.

    Under Obama, we’ve seen the growth of public unions.

    MikeM, NASA’s obsession with process over product has been challenged. We’re seeing a push of Agile Manifesto at JSC as the means of reducing development and long term sustaining costs. In a way, it does but it depends on the design. We’ll see.

    Anyway, I think Obama’s preview speech in Detroit today is indicative of increased union participation, tax hikes, more green jobs, unemployment benefits. Look at the union leaders being with him. Especially Trumka.

  5. dhunter says:

    AJ, Jimmy Hoffa Jr speaking ahead of Obama as invited speaker says of Republicans and the Tea Party “Lets Take Those Sons Of Bitches out”!

    I guess the whole Obama, Demrat, Presstitute mantra meant not civility for all only STFU Tea Party.
    We really need to take out the trash in 2012.

    Sorry for the off topic post but this needs to be addressed loud and long will OBlahBlah denounce? I won’t watch him. Now Trumpka is up.

  6. lurker9876 says:

    Incidentally, AJStrata, your point about wasting taxpayers’ money on projects instead of funding a “small project” like Orion is being increasingly repeated by bloggers who are advocates of NASA of late.

  7. WWS says:

    Let FedEx or UPS compete and bid for the right to be the deliverer of last resort. I’ll bet it’ll still only cost about 1/10 of what we’re spending on the current system. Rebid it each year.

    All kinds of incentives can come up – like offering people postage rebates if they’re willing to drive in to a central facility from a rural area. Things a union run government business would never try, but an efficiency seeking private enterprise would.

  8. AJStrata says:


    Those union boobs want a fight bring them on. They may intimidate pansy liberal elites, but not us self dependent and pro-military types.

    Hoffa is a overweight moron wearing expensive suites to compensate for his lack of brain wattage. He’s all hot air.

  9. momdear1 says:

    Got a friend, Korean War Vet, with high school education who started out as a postman. About 20 years ago he retired from the Postal service, after having climbed thrugh the ranks to becoming postmaster of a small town (abt. 10,000 population). His starting pension was over $100,000 per year. Then there was the situation in SC many years ago when the PostOffice advertised for a janitoral position with starting pay of $19,000. All the local school teachers went down and applied for the job since it was more than they were earning at the time. Post Office and federal workers pay scales are way out of line with what the rest of us peons can earn on the outside. Givingthem Military pension benefits for sitting in an office warming a chair is out rageous. Retirement after 20 years regardless of their age. Full medical and other freebies at age 35 or 40. Is anyone aware of the number of retired fed. workers wo go on to get state jobs and end up drawing Fed. and State pensions plus Social Security? Have welost our minds. Nobody should be able to retire and draw a pensionbefore age 65 is he also holds down a full time job. It’s no wonder the country s bankrupct. We now have at least 2 nonworking leeches riding the back of every worker.

  10. Mike M. says:

    I think there is a good case to be made for contracting out the whole USPS operation, but the contract MUST specify a level of service. USPS has a duty to deliver to any address in the United States. FedEx and UPS don’t. Any contract should require any-address service as one of the contract terms.

  11. Redteam says:

    There is still, and likely will continue to be, a need for mail delivery.
    Maybe it doesn’t have to be daily or 6 days a week. But if I need to mail a letter, there has to be a way that doesn’t cost $15.00, as Fedex and UPS do. And as has been pointed out, if it doesn’t fit with their plan or route, they won’t even take it, at any cost.
    I suspect it will end up as some sort of point to point delivery, as in delivery to the local post office, where it is picked up. I even see a time when the ‘tracking number’ will be an originator of text messages, so that when it is scanned, it will notify you by text when and where to pick it up. Technology is here to stay.
    I’m not ready to not have a post office, but it definitely doesn’t need to cost what it is costing the taxpayers to run.
    Public labor unions are the cause of the problem.

  12. Mike M. says:

    To a large degree, yes.

    It’s worth noting that less than one-quarter of the Federal workforce is unionized. And those unions are concentrated in certain sectors…most notably the USPS.

    And it is precisely those sectors that tend to have the most problems.

  13. andie says:

    I, too, work for the Federal government, and YES !!! They absolutely do put process over product. It’s mind-boggling sometimes.

  14. andie says:

    Also, as a stamp collector, I have a warm spot for the Post Office.