General Discussion
In reply to the discussion: A Letter From A Former Letter Carrier [View all]mikekohr
(2,312 posts)here is a statement from USPS spokesman David Partenheimer (via e-mail): -see the problem-
Although our liquidity situation remains a serious concern, the Postal Service is continuing to prioritize payments to ensure employees and suppliers are paid on time, preventing any interruption in our operations,
Below is analysis from Michael Crew, director of the Center for Research in Regulated Industries, and professor of regulatory economics at Rutgers University and Richard Geddes, associate professor of policy analysis and management at Cornell University.
The other thing thats hurt the postal service is its an industry where we have scale economies, Crew said. The post offices fixed costs keeping the lights on at its huge network of facilities, maintaining its fleet and paying its employees are amortized across the amount of mail it processes. As you increase volume, unit costs decline.
But volume isnt increasing; its plummeting. First-class mail volume which earns around three times the profit of bulk mail has dropped by about a third in a little more than a decade, Geddes said. That decline is just enormous in a historical context, he said.
The decline was sparked by the rise of the Internet and exacerbated by the recent recession, when companies cut their budgets for mailings. About a quarter of their traffic has been lost in the period since 2007-2008, Crew said. The agency has shed thousands of workers, but its losing business faster than it can save money by shrinking its work force.
Crew also blamed a flawed governance structure and flawed business model for the agencys woes. Any significant changes that have to take place have to be approved by Congress. This is not a way to run a business if youre in a fast-moving environment, he said. The Postal Service has expensive benefit obligations for retirees, a bill the agency is currently putting off and on which it owes $11.1 billion.
read full article: http://www.nbcnews.com/business/postage-prices-rise-usps-still-teeters-edge-ruin-1C8146115