Flutterby™! : USPS plan to profitability 2012-04-09 16:57:15.114796+00

USPS plan to profitability

2012-04-09 16:57:15.114796+00 by Dan Lyke 3 comments

A Facebook post of the United States Postal Service Plan to Profitability: 5 Year Business Plan February 16, 2012 got me to pondering: Is our continued subsidy of the USPS akin to the way we've subsidized roads and other infrastructure out to the middle of nowhere: There was a time when it was reasonable policy to tax the city dwellers heavily in order to subsidize the rural lifestyle. Expansion of the nation was a big deal, getting people out there to stake claims so that when the Spanish or Russians came in and tried to put down settlements there were already people with a vested interest in supporting the United States occupying those territories. Nowadays, though, it seems like the only thing we get from subsidizing sprawl is more automobile use and pollution. It's time to re-think our massively subsidized transportation infrastructure, and part of that may be re-thinking how we subsidize package delivery.

Something I found striking: The graph of USPS First Class mail Volume vs Real GDP from 1973 to 2011, from page 5. Notice how strongly those lines diverge as of 1993.

Outside of holidays and other special occasions, I bet that I use less than a dozen stamps per year.

If first class mail goes away then I am forced to pay bills via online methods, which I dislike for various reasons (quick summary: either the payments go on my credit card, temporarily accruing unnecessary interest, or they are debited directly from my bank account, which is access I don't want to give these untrustworthy bloodsuckers). Ergo I continue to support the existence of the USPS.

However, I do expect that those of us who continue to use their services in the future will be confronted by extremely high postage rates - and I'd like to see them try to rein in their horrible structural and bureacratic problems first, so I know that at least the money IS going toward making them profitable, and not going to waste. For most of its existence the USPS has been a dumping ground for patronage jobs, and it shows.

To my mind the USPS missed an opportunity some years back. They should have used their power as a federally-sanctioned monopoly to go big into the sort of package delivery services that they (for whatever reason) decided they were uninterested in doing, or at least in doing well. If the USPS had actually invested in, say, driving Federal Express or United Parcel Service out of business ruthlessly, instead of pinning all their hopes on consumer mail and presort junk mail, both of which were looking unhealthy as early as 15 years ago, they'd be in pretty good shape now. There was a deliberate failure to read the writing on the wall.

I believe that the restrictions on the USPS operating in the package delivery space come from Congress. There's going to be amazing opportunity in that space as online shopping replaces retail, and the USPS does have the infrastructure to have someone visit every single house 6 days a week. Even if you left it to FedEx and UPS for the big logistics operations, using the USPS for the last mile seems like there's probably some great opportunity...