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USPS: Going forward
  • The U.S. Postal Service is bracing for a first-ever default on billions in payments due to the Treasury, adding to widening uncertainty about the mail agency's solvency as first-class letters plummet and Congress deadlocks on ways to stem the red ink.

    With cash running perilously low, two legally required payments for future postal retirees' health benefits - $5.5 billion due Wednesday, and another $5.6 billion due in September - will be left unpaid, the mail agency said Monday. Postal officials said they also are studying whether they may need to delay other obligations. In the coming months, a $1.5 billion payment is due to the Labor Department for workers compensation, which for now it expects to make, as well as millions in interest payments to the Treasury.

    Via: http://apnews.myway.com/article/20120730/DA0BDV2O2.html

    Good update in our series about USPS :-)

  • 17 Replies sorted by
  • In my town the USPS is usually cheaper than UPS or FEDEX.

    I know a lot of people complain about the cost of shipping on stuff from Ginirigs but I was amazed when DHL brought my package from Seoul, South Korea to my little town of 700 people here in the mountains of North Carolina in under 24 hours.

  • I live in NJ, I ordered something from B&H (warehouse in Brooklyn ) the other day. For some reason, they shipped it USPS. It would have arrived yesterday if it had been UPS Standard (which is usually free). I tracked the package last night. It went from Brooklyn out to Bethpage in LI,NY. (Away from its destination). This is one of the MANY problems of USPS and I'm not a USPS hater. They have done right by me at times. The desire for efficiency is not very high over there. To be honest, there will be worse fallout if the USPS goes under. Enjoy that $4 birthday card which now costs $1.25 to send by UPS! Junk mail and catalogs may be a nuisance, but they pay a lot of people's bills...

  • The USPS failed because of it's own governmental way of doing things. Big pensions, big paychecks, big entitlements, little work, no disciplinary action for failure to do your job, etc. Typical government work style. Add in the strangleholds the postal worker unions put on the ability to restructure salaries and such and you have a situation where you spend and spend while the public realizes that they have a choice to go to FEDEX or UPS for better service while not having to deal with the complete ineptness that is the USPS. I use USPS because it's easier for customs when I ship overseas, but it doesn't matter when I go, there is always at least a 30 minute wait while one person works and 4 others stand around talking instead of serving.

  • I guess we as customers have been bailed out by gov if some of the shipping cost have been subsidized.

  • I've also never seen FEDEX or DHL rates that match USPS. Not even close.

  • They do but they have always been cheaper by far when I ship anywhere. I check everytime I need to ship something. It's not even close and you can pay and print out USPS shipping labels online and drop it off at the shipping center. If I try to mail an envelope across the US it will be $1.40 or so with FEDEX or UPS. USPS is $0.45 or so. If t the USPS didn't have to pay out for the retirement fund from the top, they would be in the black. This is also a fact. Robbing Peter to pay Paul. But I guess that's what governments do best! :)

  • @vicharris

    USPS rates constantly go up. As for DHl / FedEX, etc it depends of your country and destination, some of this companies are cheaper than EMS sometimes.

  • If USPS goes away, we are screwed here in the US. I shipped something to Saudi last year. FEDEX=$300!!!!!! USPS=$75. Not even close. The retirement and pension shit the Republicans pulled screwed the USPS. This is not an opinion. It's fact and they do not deny it, just ignore they did it. Period.

  • What happens if government forced to choose between defaulting vs hyperinflating (money print)?

    Hyperinflation will happen :-)

    Thing is, we really do not know real amount of control available and amount of control required to keep things in out of chaos during this. If amount of control in not enough it can be just rise of debt, rise of instability of whole system and then sudden collapse can happen from the single fart.

  • Interesting topic - good post:

    Don't know details, but would guess 2 things:

    1) USPS won't just cease to exist. It's too politically unpopular to allow this. Therefore some form of bailout, money print, debt forgiveness...whatever the form/structure...USPS will probably remain. In US, it's about "Mom, apple pie, baseball, etc". Part of that etc. is the post office, granny, and her stamp collection.

    2) Re: retiree benefits. That's an interesting point, as pensions across the board (federal, state, & local government employees) may receive a "haircut". These type of cuts to employee benefits will start slowly with 2-4% decreases.

    New headline? "Extra, extra, read all about it - 'Austerity' hits America!"...?

    Very interesting point when viewed on larger scale, as some have spoken of US government possibly soon unable to continue paying current commitments (promised benefits, debt repayment, ongoing costs etc.) without significant money printing. Devil in details. Math must be done to assess timing for those investing/projecting. What happens if government forced to choose between defaulting vs hyperinflating (money print)?

  • What a coincidence. Today I called USPS because some documents didn't arrive. It's okay though, the documents weren't important, just my daughter's passport, birth certificates, my marriage certificate. All originals. We're supposed to fly overseas in 3 days. Thanks post office.

  • Amazon have started arranging physical drop boxes in 7-11 stores in the USA, so you can arrange delivery to a location near your home, and not hope that the package is delivered via a neighbor. If the USPS goes away, people will adapt, but I don't see it happening.

  • Always had issues shipping stuff with USPS. Things getting crushed or even lost. UPS was only guilty of crushing things. Never had an issue with FedEx yet.

  • Most of my online orders are delivered via Fedex and UPS. There are many drop boxes for outgoing mails. I would hate seeing USPS going away, but I can adjust.

  • The Postal Service on Thursday reported a record $15.9 billion net loss for the fiscal year that ended Sept. 30, bringing the financially troubled agency another step closer to insolvency.

    The widely expected loss, more than triple the service’s loss last year, included accounting expenses of $11.1 billion related to two payments that the agency was supposed to make into its future retiree health benefits fund. But because of revenue losses, the post office was for the first time forced to default on these payments, which were due in August and October. Nearly $5 billion in other losses were due to a decline in revenue from mailing operations. The agency also reached its $15 billion borrowing limit from the Treasury

    Via: http://www.nytimes.com/2012/11/16/us/politics/postal-service-reports-a-nearly-16-billion-loss.html?_r=0

  • The Republicans in Congress created a large part of this problem with their Lame Duck Session Bill which changed the way they funded their retirement fund. They're trying to get rid of the USPS and privatize it like they try to do with every govt. agency. If the Republicans wanted to save the USPS they could've done it with the bill that could restructure the service and allow the USPS to offer other services in order to make money in other ways. This is a deliberate effort to get rid of an agency that doesn't cost the US Taxpayers anything. There's a way to save the service and modernize it to continue to exist.

    You also have to realize that the Republicans are anti Union and the main reason is that the Democrats are pro Union and are supported by labor Unions, so if the Republicans can kill off the Labor Unions as they've been aggressively doing quite successfully for 30 years, then they kill off the biggest financial backers of the Democratic Party. It's been a really record year with Republican run states killing of Public Sector Unions all over the country. Union membership is down dramatically in just the last couple of years. The Republicans and Big business is winning the war so far.

    A private mail service is a huge business opportunity if they can kill off the USPS. They won't have to provide service to small towns and can pay less and charge more.