Five Years Left Before The USPS Hits The Fan

This issue has been stewing for at least the last 5 years...




https://www.brookings.edu/blog/fixg...ial-problem/

Don

Congress created the mess. This Bloomberg article offers some excellent analysis of the USPS state of affairs and why the USPS is in the place it is.

https://www.bloomberg.com/opinion/a...stal-service

Interesting points.
Thanks for sharing the link.

Excellent articles! If the USPS will run out of cash in 5 years, what do you all think the price of a Forever stamp will be in 5 years? How long do you think before the price of a Forever stamp reaches $1.00?

Morning all,

$1.00 forever stamp, hummmm…. Look at the price of a first class stamp in 1932 when it was raised to three cents. Yep, the gloom and dome folks were yelling then. It was a 50% increase. Now compare the cost of milk, bread, and gasoline in 1932 with the cost today. In absolute dollars I would love to get any of these commonalities for fifty cents.

The real culprit is social change fueled by technological advances. Still waiting to here from the displaced blacksmiths with an over supply of horse shoes to chime into this discussion.

I have to wonder what all of these potential changes will mean for our hobby. Would love to hear others' thoughts on this question.

Given their recent success in court and without changes in rate setting it may not be any higher than 85¢. There are many that want them to fail.

In order to sustain the USPS financially, I wonder if most of the future rate increases will be on Priority Mail and package rates or the Forever stamp rate? First class mail volume has declined for a decade while packaging volume has increased in that same time. Online retailers have a lot of political clout via lobbyists, so perhaps large rate hikes on packages will be tempered and instead increases in the Forever rate will be large in order to address budget deficits.

Ultimately and if the USPS is to survive no matter what they are delivering, they will need to address the cost of the 'last mile'. Logistically sending a person to every address in the country is an incredible cost, especially when there is not mail/parcels to be picked up or delivered yet they are responsible for checking every mailbox every day. Short-term (i.e. next 10-15 years) they could further the existing work on 'smart mailboxes' which could send updated delivery routes to the mailman, saving Lord knows much money and 'carbon foot print' (for the green folks).

But in my opinion, I do not see how they will survive long term unless they become digital and primarily a parcel delivery company. First class mail is on life support and the prognosis is grim. There are some things in life which change that we simply cannot prevent or deter. The evolution of postal systems and the way human communicate is one of those things.

Technologists have been predicting the arrival of ubiquitous computing for decades and we are getting very close. Computers that are present, appearing, or found everywhere are pretty much already here in the form of phones, smart ovens, smart houses, smart cars, etc. Smart mailboxes already exist in several format but it will take the involvement of USPS to make this a nationwide implementation. And Congress will have to lift the requirement that the USPS visit every mailbox everyday (which is quite likely given the 'green' political movement).

But one fact is inevitable; the USPS will not dictate to society how it should communicate. Rather it is our society which will choose how we communicate with one another and the USPS will have to follow that direction or cease to exist.
Don

Some of the posts here and some of the comments in the links are based upon incomplete frames of reference. There are millions of people in the US who do not have computers, internet service or smartphones. These include recent immigrants, the retired, the disabled, the impaired and those employed at the margins of society. They include members of my local stamp club who live in tiny apartments on a fixed income and can't afford any kind of technology. They still correspond by mail, receive and pay their bills on paper, and deal with healthcare and other issues by ordinary phone, non-smart cellphone and mail. To talk of eliminating all home postal service would be to return those people to the 18th century. While I respect the "get into the 21st century" view here, we also need to be very careful of seeing this problem only through the lens of the relatively wealthy elite.

It is true that 10% of Americans do not use or have internet access. But note the smart mailboxes do not require a person to have a computer or internet access, cluster boxes can easily be made into 'smart' boxes with internet access.
This is the same as saying that not every American has a car with a computer in it, but that does not preclude them from using mass transit transportation that does.
Don

The statistics may surprise you....

https://www.pewinternet.org/fact-sheet/mobile/

For people making $30K or less, 71% own a smartphone and 23% have a non-smart cellphone. One may think they could not afford one.

The lowest ownership 53% are people over 65.

How they use them is not in the survey but many have the technology and connected.

Congress created the mess. Undo the prefunding requirement and the Post Office would be in the red in short order. True that first class mail is dwindling but online retailing has replaced it with package delivery. Volume is not the issue. Last mile delivery is a must in order to compete in delivering those packages. Why it is where it is now and what would stop the fiscal bleeding are not great mysteries. All roads lead to Congress.

The prefunding requirement requires that the USPS fund its retirement accounts 75 years in advance. In other words, they have to have fully funded retirement for people who are not even born yet.

This was a partisan attack on the PO to help the folks at UPS and Federal express compete by making the playing field uneven.

Last mile includes the USPS being obligated, by law, to check every mailbox for a 'red flag' for pickup. Given the number of mailboxes which are not sending or receiving mail each day, it is an obvious time/cost/energy savings if they know upfront which boxes they have to service each day and then plan their routes accordingly.

The automation of the delivery routes are a significant competitive advantage for UPS and FedEx who use vehicle routing software to do things like eliminating as many left-hand turns as possible. The economy of scale for these kinds of efficiencies are huge and Congress needs to remove many of the regulations like forcing USPS to every mailbox in the country whether there is mail or not since it is costly and wasteful.
Don