Businessweek: The USPS Nears Collapse

Businessweek has a lengthy cover story about what it says is the imminent collapse of the US Postal Service. It’s a bit odd- here’s how it starts:

Phillip Herr looks like many of the men who toil deep within the federal government. He wears blue suits. He keeps his graying hair and mustache neatly trimmed. He has an inoffensively earnest manner. He also has heavy bags under his eyes, which testify to the long hours he spends scrutinizing federal spending for the U.S. Government Accountability Office

The GAO’s Phillip Herr is presented as a kind of bureaucratic Indiana Jones, even sending agents across the Atlantic to get to the bottom of the deep mystery of what ails the USPS. (It’s good to know that he keeps his moustache trimmed. We are not told if he wears a fedora.)

The writer brushes quickly past the elephant in the room, the $5.5 billion annual trust fund pre-payment. It’s mentioned as an item the USPS expects to default on, and as something the PMG would like to get rid of, but there’s no explanation of how it came about, and no mention of the fact that the USPS wouldn’t be in debt at all without it!

The simple fact is that the US Postal Service faces an extremely difficult future. But it is only facing financial collapse in 2012 because of the misguided and self-serving actions of politicians. The one thing the writer does get right is the fact that the political stalemate in Congress makes it difficult to see any chance of positive legislative change before it’s too late.

The U.S. Postal Service Nears Collapse – BusinessWeek.

  • Mailer

    A completely manufactured crisis. A vapid article. The author seemed to have no idea how many billions of dollars of GDP revolve around the USPS.

    We have little children running government. They are every bit as dumb, impressionable, and stubborn as preschoolers. You can easily suborn their vote.
    They will destroy a vital, sustainable, Constitutionally mandated service provided by the most effective system of its kind in the world.
    They will destroy lives and families FOR NOTHING. They are –some individually perhaps but certainly collectively – psychopaths.

  • Jack

    If it can be sent digitally,
    it will be sent digitally.
    I have carried mail for
    twenty-eight years.
    Mail is going away and it
    is not coming back.
    That is the real elephant
    in the room.

  • T Vraniak

    I have stated it many times, and will continue to do so; our condition is not a fault of the people working for the company, but Congress and the mandates placed upon us. Pay back the overfunded retirement money, pay back the prefunding (?), doesn’t even make sense with you put the two issues on paper next to each other. Pay back the cost of the OIG since 1996. Take UPS and Fed X back to court over the SOX issue, since we are not a publically traded company. The fact that our senior leadership fails to standup for the workers in the organization and hold Congress accountable for it’s actions on the USPS doesn’t say much for them. Whenever Congress states that the issues with the USPS is employee pay and benefits bring out the charts and graphs to show that without the Congressional mandates, we have actually made money. Maybe the goal is to handle the USPS totally like some of our Fortune 500 companies. Ensure that the company does not take care of it’s workers. Contract all work, maybe overseas, maintain exceptional rates of pay and bonuses for Senior Management at the expense of the people. The people with the dedication that have brought the USPS to the point of being one of the most trusted companies in the Nation can go by the wayside. Now, the bottom line, not ethical behavior and a dedication to duty become the driving factors of the organization. Sell out the people, sell out the country, then wonder where the jobs have went??

  • Bernie

    You are right T, big companies now have their base in the caribean contries and Panama where they enjoy lower taxes, I called the Dishnetwork the other day and they respond from costa rica, I asked the lady how much an hour she was making and she said big money 10 dollars an hour, this companies got the blessing from our politicians, bunch of rats

  • brian

    Jack- thanks for restating the obvious. Everybody knows that mail volumes are declining. What everybody doesn’t know, thanks to politicians and the news media, is that despite the drop in mail volume the USPS has actually been breaking even, until the trust fund payments kicked in. Also- you might want to check the meaning of the expression “elephant in the room” before using it in conversation. It is used to describe an obvious truth that is being ignored. No one’s ignoring the drop in mail volume- the Businessweek article blames the whole postal financial crisis on it- so do all the news media and politicians. What they ignore (or shrug off) the immediate actual cause: the PAEA trust fund.

  • John

    Volume dropping. Bad management decisions,some employees that work the system to perfection,Congress as a sideshow to somehow knowing how the P.O. works!What a joke, its amazing that the mail gets delivered every day.Postal craft employees are no way over paid. Reasonable wages to do a truly wonderful job,of getting the mail out..

  • thor

    The whole problem with USPS is the same with most other companies; management wants the big bucks at the expense of the people actually doing the work. How long does it take to realize this is a company that works because most of the employees, not only enjoy their jobs, BUT ACTUALLY KNOW WHAT THEY ARE DOING. If management would stop chasing numbers and focus on providing the service the numbers will come. Now toss in the government wanting their piece of the pie and here comes disaster. Try this, eliminate the HQ jobs where most people have never touched a letter let alone carried a route, then move to the areas and districts and see how much money is saved. If you attempt to control numbers you lose focus on the job at hand. Do the job with capable employees and the numbers will surprise you. I can’t think of anyone who wants to pay for a service they don’t get; but they all will pay when results are achieved. The Postal Service is ran by great employees, who appreciate their jobs and are proud of the service they provide. Granted there are always bad apples and people who work the system, but try this. Put .44 cents worth of gas in your car and see how far you get that letter. Now put that same .44 cents in a stamp, put it on a letter and watch one of the greatest companies on earth(less management) deliver it with care, pride and precision. Thank you for your time and space. Oh yeah, sadly I am a member of management. But I have great employees who deliver without question. THANK YOU ALL.

  • jay

    glad i retired when i did..at least i’ll get to enjoy a little life and lots of golf i hope

  • David

    Just a note of caution when reading through any postal-related article during these trying times . . . It is important to see the whole picture, and research the genesis of the problem at hand. For example, try looking up the Jan. 2007 Postal Record to find the NALC’s complicity in the enactment of the PAEA. (I know, they do not want you to know that you know…) The opening paragraph reads,
    ” More than a decade of legislative wrangling and
    political intrigue ended with the stroke of a pen
    December 20 at the White House when, with
    NALC President William H. Young as a witness,
    President George Bush signed into law the Postal
    Accountability and Enhancement Act of 2006.
    Congressional leaders in the postal reform campaign
    and other labor and industry officials also
    attended the ceremony, which was the fulfillment of
    NALC’s top legislative priority.”
    Get that? NALC Pres. Young as a witness, the fulfillment of NALC’s top legislative priority? More?
    “This law is the culmination of years of hard work
    by many NALC officers, the union’s legislative staff
    and our committed members,” Young said. Still more?
    “In both cases, we prevailed over the White House.
    The new law sets out a 10-year schedule for using
    the escrow and military pension savings to dramatically
    reduce the Postal Service’s massive unfunded
    liability for retiree health insurance, while also providing
    some flexibility for other uses. In so doing, we
    secured more than $100 billion for the Postal Service
    in the decades to come and protected the interests of our current and future retirees, whose health benefits will be fully funded.”
    Yes, I am a union member, but I believe it is important to question the providence of our elected union officers on the reasoning behind their legislative positions, and the wisdom of their agreements with management.

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