Postal Service needs flexibility to achieve financial stability

December 23, 2011


As Congress considers legislation to reform the business model of the Postal Service, it must confront a basic choice: to permit the Postal Service to function more as a business does, or constrain it from doing so.

With greater business model flexibility, the Postal Service can return to profitability and financial stability. A flexible business model would speed product and pricing decisions, enable a five-day per week delivery schedule, and permit the realignment of mail processing, delivery and retail networks to meet lower mail volumes. It would also allow the Postal Service to more effectively manage its healthcare and retirement systems, and better leverage its workforce.

For an organization that generates all of its revenue from the sale of postage, products and services – and is contending with declining use of First-Class Mail for bill payment – having the ability to quickly adapt and react to the marketplace is vital. Our immediate goal is to reduce our annual costs by $20 billion by 2013, which would put the Postal Service in the black and ahead of the long-term cost curve.

The alternative is a business model that prohibits or delays cost reduction, perpetuates an inflexible structure, and constrains the Postal Service from being more responsive to the marketplace, which soon could result in long-term deficits in the range of $10 to 15 billion annually.

Within the limits of our current legal framework, we have responded aggressively to a changing marketplace – reducing the size of our workforce by 128,000 career employees and reducing annual operating costs by $12.5 billion in the past four years. However, to return to profitability we must move at an even faster pace. And to do so requires changes in the law.

In a digital world, businesses and individuals have choices in the way they communicate.  Although the Postal Service facilitates trillions in commerce annually, and supports a $900 billion mailing industry that employs almost 8 million people, it must have the tools and the motivations to effectively compete for customers.

In the current debate about its future, some have argued the Postal Service should not operate like a business and be allowed to regress back into an unchanging, taxpayer-subsidized agency, and some have urged that it be privatized and completely separated from the government. The former is undesirable and the latter is unrealistic.

The answer resides in the middle – an organization that performs a vital national function and operates with the discipline and motivations of a business that competes for customers. If the Postal Service is to endure as a great American institution, provide the nation with a secure, reliable and affordable delivery platform, and serve as an engine of commerce, Congress should provide it with the speed and flexibility it needs to compete in an evolving marketplace.

The Postal Service is far too integral to the economic health of the nation to be handcuffed to the past and to an inflexible business model. To best serve taxpayers and postal customers, it’s time to remove the constraints.

Kerry Wolny is the district manage for the Sierra Coastal Postal District which includes San Luis Obispo County.

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CCN really needs to disable the thumbs up / down. Obviously it’s being over-abused and makes following conversations difficult.

It’s too bad some people feel the need to spam ratings (up or down); it just shows genuine dishonesty, and there is enough of that going around.

The USPS is the poster child for government inefficiency, and will fail accordingly. The sooner the better.

The USPS is the poster child for government inefficiency, people have been making this claim since 1775, there must be some truth in the theory for it to have lasted this long


Although mail volumes are down, it is NOT the Internet or even a bad economy that is killing the Postal Service. It is a huge mandate called the “Postal Accountability and Enhancement Act” from a Republican held LAME DUCK congress in 2006, that was insidiously passed, that is killing the Postal Service!

The huge pre-funding of the PAEA fee of 5.5 BILLION, with a “B”, each year, is for a 75-year liability, which the USPS is required to pay over a 10 year period that started in 2006! NO OTHER GOVERNMENT AGENCY OR PRIVATE SECTOR BUSINESS IS REQUIRED TO MAKE SUCH A PAYMENT, but a provision in the 2006 PAEA demands it of the USPS! What’s wrong with this picture?

Since the USPS is the largest remaining Unionized entity in the USA, and that primarily votes Democratic, could it be that the GOP PAE Act, and the subsequent H.R. 2309 bill described below, is to try and kill the Postal Service? Naw, again, I digress.

As a September, 2012, due date draws near for another 5.5 BILLION, the USPS is approaching it’s debt ceiling. The banter relative to this fact, I am sure, will be filled with incorrect “assumptions” , like so many proffer within CCN, and blatant inaccuracies of a government bailout!

If you recall, this is precisely what happened over the Summer. USPS Management announced it was suspending payments to FERS (5.5 BILLION) to conserve cash. Oh, oh, assumed bailout in the future! The very next day, on June 23rd, 2011, Rep. Darrell Issa (R-CA) and Rep. Dennis Ross (R-FLA) introduced H.R. 2309, “The Postal Reform Act of 2011”, which would be devastating for the USPS and for postal employees and further punish the Postal Service as a whole, which in turn, punishes YOU!

The Issa bill is designed to avoid a taxpayer bail out. But wait, the fact of the matter is, the federal government is holding 75 BILLION of USPS “overpayments” to its pension accounts through PAEA, where the USPS does not have to be bailed out in the first place if it operated as other business’ do with their retirement accounts!

IF The USPS had this 75 BILLION that the government is holding, it would solve most of the USPS problems for years to come! President Obama has asked Congress to re-pay at least $7 billion of it, but that is not likely to happen in the current Republican House.

H.R. 2309 would do nothing about the pension overpayments or the pre-funding mandate, which is the cause of the USPS crisis to begin with! Instead, H.R. 2309 would punish the workers and curtail service to citizens and business across the country. It would also unilaterally re-negotiate the USPS contract, to cut wages, abolish benefits, and end collective bargaining! Doe’s that sound familiar in Wisconsin?

NOW, this is the time for a certain faction to say HOORAY with glee in the fact that why should the UNIONIZED USPS workers have a decent living wage ($20.00 to $25.00 per hour), along with benefits, and a safe work place? Now, for this faction, I’ll give you a moment for your jumping up and down with glee!

…………….. Okay, I assume that you’re done with your jumping up and down with glee about the above H.R. 2309 protocols, yes? Good, then wipe your sweat from your brow so we can continue.

H.R.2309 would create a five member board that would order $1 Billion worth of post office closures in the first year! If it is enacted, thousands of offices throughout the country would be closed along with even more distribution centers! Now, if your local post office closes under this bill, you have to send your letters by UPS, or Fed Ex at 40 times the cost! Or, you could drive miles to your nearest open post office to save money! But remember, a certain faction is jumping with glee about this fact! HOORAY!

So, I ask you, what’s a better outcome?

A. Eliminating the “Postal Accountability and Enhancement Act of 2006, that costs the USPS 5.5 BILLION a year, and that NO other business in America has to address, along with further promoting the demise of the USPS by bill H.R.2309?!

B. Keeping things in the status quo mentioned above to assure the demise of the USPS? NO, privatization will not work for obvious reasons, so please, save us the time and remain silent upon this proposition to save yourself embarrassment.

If anyone agrees in condition “A”, then write your Congressman and tell them to support Rep. Stephen Lynches (D-MA) H.R. 1351 that allows the Postal Service to apply it’s BILLIONS of dollars in overpayments to it’s pension funds under the PAEA, towards it’s financial obligations now, including the funding of it’s pension and health care funds under the normal business practice! Or visit

Furthermore, why didn’t the author of this article, Kerry Wolny, mention the above FACTS in a more discerning way within their article?!

At the end of my treatise, the “Or visit” was left off, the website is;

Ted: Very well said, and the links certainly help out those that may doubt your assertions. For all of the conservative banter about “Run the government like a business”, as you pointed out, no other entity in the world has to pay into a pension system for a 75 year period in ten years, so how is this supposed to “help” the Postal Service? As stated, it’s not supposed to; it is a punishment, plain and simple, period. For all who would want to attempt to privatize the USPS, let it first function like any other government agency first, or at least like any other private company, which means do away with this punishment of a supposed “reform”. Just remember, when listening to a Republican politician describing an agency or program that they want to “reform”, it means that they really want to destroy it, dismantle it, or render it impotent; nothing else, ever.

Congress has the authority to create a postal service (Article 1, U.S. Constitution). It does not have the authority to privatize it, at least not yet. Congress has failed the USPS.

I think privatization would be a huge mistake. I like to think of it as a basic service, like a utility. Unfortunately, Congress has never given it the flexibility it needs, hence, private companies like FedEx, UPS and others (who have now folded) jumped in to compete. Why make the USPS private if we already have private firms. We might as well eliminate it’s charter and sell off the assets. Competition has been good, though painful, for the USPS. What has hindered the USPS is the tight reins of Congress, partisan bickering, lousy priorities (such as wars, military buildups, corporate socialism, etc). It’s worked well in the past, and can work well into the future, it only takes a vision.

I feel it is a great opportunity to let the USPS do what it was intended to do, deliver mail & parcels efficiently, reliably and securely.

Most of my experience with the USPS has been satisfactory and it’s quite a bargain that I can send a physical document anywhere with a LIBERTY BELL FOREVER stamp. I’m not even sure how much 1st class postage is. This is not a nostalgic argument either, but a pragmatic and necessary habit of citizens of a civilized society….actually penning letters.

I’m not too interested whether or not the USPS makes a profit as a necessary government enterprise. Any profits should be rate adjusted forward.

It would be a sad day in our lifetime when written paper and penned documents can no longer be mailed for “pennies on the dollar”..

Would anyone disagree that writing letters and sending them is a critical form of communication in an advanced society and is a foundation of advanced critical thinking? Ink’g paper and constructing a letter from your thoughts is a skill essential for all adults, without this skill you will ALWAYS, I MEAN ALWAYS be dependant on someone else. Either your someone’s pawn or perhaps your a prince or princess working for the emperor or emperess has no clothes title.

Don’t get me started on we have computer’s, internet, etc,….they are not a right or a guarantee, they will not always be available, and there is a sociological cost to society with its use.

A hand written letter has what? A power or 100 or 1000 times the impact of a email? or 10,000 times the impact of a text message? Just putting some perspective from my point of view as a tax paying value added working citizen.

USPS should be maintained as a government enterprise with performance incentives. I believe a marketing campaign to highlight the importance of written communication by ink and pen is a key that would get citizens to use more USPS services. It’s takes effort, skill, intelligence and habit to write letters and maybe there in lies the rub, yea Department of Education go after this too.

If anyone remembers the STAR TREK NEXT GENERATION series, emails, texting, etc is analogous to the BORG and BEWARE OF BEING ASSYMILATED!!!!!! The USPS is remedy to this.

I strongly agree about “penning letters.” Handwriting is getting to be a lost art! Almost nobody writers letters anymore. Did you know that there are public educators who are pushing to have cursive writing removed from the curriculum in the public schools? It’s true! They think it’s a waste of time! Of course, there are other educators who disagree, but the fact that some “educator” would dare propose such a ridiculous idea is a sign of the times.

This state of affairs is a shame. Letters DO have far greater impact than e-mails, or other printed/electronic matter.

That being said, I question that the government is the best delivery system for the mail. I think the private sector could do better, provided that the rule of law holds. Unfortunately, the rule of law IS NOT holiding; therefore, it makes very little difference at this point. Since we live in a POLICE STATE, the private sector and the gubmint are being fused into a fascist state.

To everything there is a season. The USPS is dying a slow death and likely can’t be rendered first aid. The internet will keep evolving and will cause the demise of our postal system. It’s called progress.

Welcome to it.

Yes, the slow death coming is at their own hand.

Just labor costs alone are enough to break them not to mention the inefficient process they use to move the mail. Streamlining of this process would help and so would hiring non union laborers to do the menial tasks that most post offices do day in and day out. It reminds me of the AG business with union scale labor. Imagine what would happen to our food costs if we paid farmworkers union scale?

easymoney, a word please!

“Yes, the slow death coming is at their own hand.”

Granted, delivering mail in declining, but the impetus of the USPS going under is the “Postal Accountability and Enhancement Act” initiated from a Republican held LAME DUCK congress in 2006 that is killing the Postal Service! DO YOUR HOMEWORK!!!

“Just labor costs alone are enough to break them not to mention the inefficient process they use to move the mail.”

If it wasn’t for this Machiavellian mandated retirement fund, aka, the PAEA act, it is said that the postal service would have actually netted $1 billion in profits over the last 4 years! It’s NOT the wages! AGAIN, DO YOUR HOMEWORK!!!

Because of the PAEA act, they’ve had to close many distribution centers, therefore, less efficiency. Tell me, how inefficient is it to have a letter mailed to New York from SLO, and deliver it to a specific address for only 44 cents?! Or, “if it fits, it ships” boxes that the USPS are now promoting?

“Streamlining of this process would help and so would hiring non union laborers to do the menial tasks that most post offices do day in and day out.”

They have “streamlined”, but because of this “Postal Accountability and Enhancement Act”, which no other business is required to be under, the new distribution centers are all for naught because they have to close them! DO YOUR HOMEWORK!!!

“It reminds me of the AG business with union scale labor. Imagine what would happen to our food costs if we paid farmworkers union scale?”

Any employer who has integrity and the least bit of consideration for his fellow humans, knows he has an obligation to pay a fair wage, provide safe and comfortable working conditions, and apply a lot of time an energy into finding ways to have the work done in an effective and efficient manner!

But, unfortunately, most people who own businesses in the farm area of California are extremely greedy, have little to no integrity or consideration for others, and have no interest is increasing the efficiency of their workers or the company.

God forbid if we treated our farmworkers in the way WE would want to be treated! Nope, “easymoney” doesn’t want to pay another 5 cents for that head of lettuce! He would rather let the farm workers get less income, and be in unsafe conditions for that 5 cents savings!

It sickens me in that the majority within these forums just throw something out against the wall to see if it sticks! LOL Assertions are a “dime-a-dozen” at CCN, and easymoney, along with MANY others, are guilty of this form of fallcious argument!

I have done my homework,

and my local USPS has downsized, cut hours and laid people off. They are open for business from 9am until 4pm and closed for an hour for lunch, and only open till 10am on Saturday for parcel pickup only. I have dropped off mail to be delivered and some times it gets there sometimes it does not(without any accountablity or recompense). Those of us who run small businesses are dependent on the USPS for timely delivery or at least delivery timely or not.

That all being said, the USPS is one of the most dysfunctional federally run businesses under the guise of a fedreal department and IMHO, it is only a short matter of time before they go out of business altogether. We have just seen what our leadership in Washington thinks is needed to prop up private businesses, banks,and other agencies at great cost to us taxpayers. If it does not work, fix it or let it go. I for one am sick of the tax dollars being printed and thrown around like so much confetti.

And instead of making personal attacks on me, stick to the subject and limit your opine to that topic. What you think of me you can keep to yourself…


I wasn’t making personal attacks towards you, I was addressing your ignorance upon this topic. Therefore, I was making factual statements towards you instead! Learn the difference.

How come you didn’t address your statement; “Just labor costs alone are enough to break them not to mention the inefficient process they use to move the mail.”

You became very silent upon this premise! Why? Because you know for a FACT that you just threw it out there for effect as you did with your other misquided notions to see if it stuck! Unfounded assertions do NOT support an argument!

The Labor Union wages are NOT the problem as described in detail above in my “The United States Postal Service does not have to fail” post above.

Therefore, subsequent to reading said post above, NO, YOU HAVE NOT DONE YOUR HOMEWORK, AND DON’T PRETEND THAT YOU HAVE!


NO, it’s not called progress, it’s called the unwarranted burden of the Republican held Congress in 2006 to place upon the USPS’ back the “Postal Accountabilty and Enhancement Act, and the forthcoming, if not blocked, H.R. 2309 bill enacted again, by two Republicans!

If these two entites were removed, then yes, this is the FIRST AID that it needs, period!

People pay their bills on the internet, send emails, Ecards, etc. That isn’t going to stop anytime soon. I utilize the postal system only in my business, not personally. There is a progression of use of the internet services from the postal services, despite you not thinking so. No matter what blocked bill dies, the internet is here to stay and people will continue to turn to it rather than the post office. Like it or not.


“There is a progression of use of the internet services from the postal services, despite you not thinking so”

^ Where did I state that I didn’t think so?

Already addressed your internet premise; “Although mail volumes are down, it is NOT the Internet or even a bad economy that is killing the Postal Service.” Furthermore, I’ve stated that they’ve streamlined because of the internet, etc. Again, yes, further internet usage will be a given, BUT, at this time, read my top post of why the internet is NOT causing the problems at this time!

THE QUASI GOVERNMENT CONGRESSIONAL RELATIONSHIP WITH THE USPS WILL NOT LET IT OPERATE AS A REAL BUSINESS! This is the problem, AND, to state it again, the PAE act of 2006, and the H.R. 2309 Bill that is pending is NOT given to any other business, private or governmental! THIS IS WRONG! Congress is using the BILLIONS that the USPS has overpaid, and put into their retirement accounts by issuing Treasury Notes! LOL

Because of the above FACTS, the Republican held Congress wonder’s why they’re failing when in actuality, they’re not if those anchors were taken away! What a joke!

Plus, there’re no free rides, the internet costs you how much per month? How much do the banks and other business’ charge you for on line billing? How much does a stamp cost? Get it?

The only way to get the “flexibility” that you suggest is to privatize it. That’s what it means to be in the private sector: flexibility, choices, options. Mail service needs a true free market. Government mail service does not work because market forces are not allowed to determine prices.


Yes! A privatized and de-regularized market like the banks and Wall Street subsequent to the Glass-Stegal Act being abolished! Then they will have the “flexibility” of making an unreal profit at the expense of service and their employees. Remember, the corporation, or privatized company, has to make a profit for it’s investors! This will also allow GREED to present itself once again, like the aforementioned corporations did to take this economy into the toilet!

Market forces are not allowed to determine prices? Ask United Parcel Service, or Fed Ex, to send your letter to New York for 44 cents and deliver it to a specific address! lol The USPS is the best game in town for shipping, and god forbid, THEY ARE UNIONIZED TOO! Oh no!!!

I’m afraid that you have misunderstood my comment. A free market has some very important prerequisites which I have assumed, and you have neglected, namely, the rule of law. Now that we live in a lawless state and a POLICE STATE (same thing), the rule of law is obviously gone, except for an illusory facade. Your own criticisms and bitterness reflect this sad fact very powerfully. But what you speak of is CRIME, not business.

This is why I have mentioned so many times in these pages that we live in a “gangster state.” It’s true. In fact, it is even worse than you portray it! The news is loaded with so many stories of corruption that one cannot even keep up with them.

But you misunderstand it’s true nature. It is MONOPOLIES which block market forces from determining prices. Were market forces allowed to operate freely, prices would be FORCED down and the pretenders to go out of business because the buyers would RULE.

But the buyers are not allowed to rule in postal delivery because of the government MONOPOLY. It’s the same in any other business to the extent of gubmint interference.

Result? The customer suffers by paying those higher prices that you and I so hate. It is the dirty rotten alliance of gubmint crooks and private sector crooks to create monopolies which is destroying our country. The best word that I have seen to describe this is “collectivism.”

Give the following info a good hard look:

“Exactly What Is Crony Capitalism?” This analysis shows that Crony capitalism is a misnomer. It really is Crony Collectivism because it is a system that relies on the power of government to create monopolies. The 1% are collectivists, not free-market capitalists.

RealClearMarkets Posted 2011 Dec 17

Gimlet, with all due respect,

YOUR QUOTE: “But you misunderstand it’s true nature. It is MONOPOLIES which block market forces from determining prices. Were market forces allowed to operate freely, prices would be FORCED down and the pretenders to go out of business because the buyers would RULE. But the buyers are not allowed to rule in postal delivery because of the government MONOPOLY. It’s the same in any other business to the extent of gubmint interference.”

How do you equate your statements above when the USPS shipping costs are far cheaper, barring any monopoly, than UPS, or Fed Ex?

To send a letter to New York from SLO, it is 44 cents, and arrives in two to three days.

Conversely, to send that same letter by Fed Ex, “Express Saver Envelope”, it will cost you $26.79, and the arrival time is FIVE DAYS!

Therefore, your premise of people not being able to rule the Postal Service, and their alleged monopoly, in costs, seems to fall flat upon it’s face. :(

Facetiously, let’s hang on to the USPS monopoly for lessor shipping costs!

That is true that the prices are lower, but they are ARTIFICIALLY lower! Again, market forces are being blocked from determining the REAL prices.

However, what about the ongoing deficits of the USPS? Don’t those cost us to shore them up? Of course they do! The USPS is hemorrhaging money big time! An artificially low price for postage does not mean that the service is cheaper, pure and simple!

I suspect that when it is all tallied up, they COST US MORE THAN WHAT A FREE MARKET WOULD!

USPS competes with the parcel companies, DHL is partially subsidized by Germany FEDEX and UPS is not and cried foul I forget how the suit was settled. .


YOUR QUOTE: “That is true that the prices are lower, but they are ARTIFICIALLY lower! Again, market forces are being blocked from determining the REAL prices.”

The U.S. Postal Service does not operate with tax dollars; instead, they run their business from the revenue they receive from their products and services.

It’s biggest problem lies in its bizarre relationship with the federal government. While the Postal Service is expected to finance itself, IT IS NOT ALLOWED to set its own rates, choose its own hours, or determine its internal policies!!!

To turn the problem around, the USPS will either need to be directly funded by the government (as is the case in many countries) or it needs the freedom to set its own prices, policies, and hours! SIMPLE!

In the meantime, enjoy those cheaper rates than Fed Ex and UPS!

YOUR QUOTE:” “That is true that the prices are lower, but they are ARTIFICIALLY lower! Again, market forces are being blocked from determining the REAL prices.”

Congress determines the pricing structure of the Post Office! Every policy decision must be approved by Congress. One big problem is that these competitors, Fed Ex, UPS, et al, are able to set their own policies, while the USPS’s rates, hours and even its pension plan funding are determined by Congress.

Their deficits are, in part, due to the egregious funding of their retirement accounts that Congress has placed upon them with the “Postal Accountability and Enhancement Act” of 2006, pushed into law by a lame duck REPUBLICAN Congress! If they didn’t have to pay this 5.5 BILLION dollars a year since 2007, look where they would be now!

All the Post Office has to do is to break even. That’s why they are less expensive than Fed Ex, UPS, etc.!

No, Ted Slanders, you are wrong. Why do you call their relationship with the fed gov “bizarre”? Nonsense! That’s the way the feds operate! The whole fed gov financing scheme is “bizarre,” not just the USPS! And what about those “deficits” I mentioned? Take a look at these articles:

U.S. Postal Service: Actions Needed to Stave off Financial Insolvency

GAO-11-926T, Sep 6, 2011

Here’s an excerpt:

“By the end of this fiscal year–in less than one month–the U.S. Postal Service (USPS) projects that it will incur a $9 billion loss; reach its $15 billion borrowing limit; not make its $5.5 billion retiree health benefits payment; and thus, become insolvent. USPS recently summarized this situation as the equivalent of facing Chapter 11 bankruptcy.”

If you read on in the article, you will see solutions to the problem which look a lot like “free market” solutions. But in that case, why not just say to hell with it and privatize it? Because they do not want to get out from under the federal umbrella of protectiona and monopoly? Can you blame them? Who the hell would want to give that up? Nobody!

How can anybody possibly hope to change this kind of behavior while first class mail delivery is a monopoly of the feds? Get the feds the hell out of the mail delivery business and you get rid of the monopoly! The free market imposes its own discipline on the businesses within it. Government agencies have no such discipline because they are shielded from market forces.

Post Office Finances Now Officially High Risk — No Kidding

If there is a way for the USPS to gain more control over their rate structure and assets, I am totally for that. I support and use the USPS as my primary shipper.

The online bill-paying feature shifted money from the USPS to the respective billing companies. It’s not “free” to use online bill-paying. It’s a cost that’s transferred to the customer, just not always transparently. The USPS could market that fact.

This Xmas season the lines were long inside and for the self-service terminals, but the self-service line moves at a fraction of the speed of the full service lines, the reason being that professionals work behind the counter, and doofuses like me use the self-service terminal, where one has to slog through one screen after another, reading and responding with a button, etc.

In addition, due to fear of after-hours terrorism (!), the stamp machines have been removed from lobbies, increasing demand for either the counters or the self-service terminals. The stamp machines could have just been moved inside the main (business hours only) lobby, or a way to close & secure the machines where they were could be created.

The USPS web site crashed this season. Maybe because they added one of those floating pop-up “frame” thingies, which made it much slower to use than the old setup. I mostly go online to do one of two things, check a zip code and check prices. I don’t need a fancy, slow web “enhancement” to do that.

The USPS would do better if they hired additional part-time personnel for the counters and extra server space for their website during rush times & holidays.

As for promotion, I was incredulous years back that the USPS was sponsoring a professional Tour de France cycling team, but wasn’t doing any domestic promotion of it. It was just a hole in the ground to dump money. They had the greatest cyclist (asterisk?) and team (asterisk?) in the history of the sport, and they didn’t even promote it. The USPS could have qualified for grants to promote cycling, sports, or even healthy lifestyles, but they didn’t do squat. Somehow, they must have thought that it was up to the team to promote the USPS, and not a symbiotic relationship.