Postal Service lost $14M a day in 1st quarter

(Associated Press)

(Associated Press)

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Maybe Saturday isn’t the only delivery day that needs to be considered by the U.S. Postal Service?

Days after the federal agency announced it was discontinuing Saturday deliveries to cut costs, its chief financial officer told the Postal Service Board of Governors that USPS lost $1.3 billion – about $14 million a day – in its first quarter. The good news is that the loss  October to December was much smaller than the $3.3 billion in red ink during the same period a year ago.

The most recent first quarter was helped by extra mailings due to the November elections and Christmas holiday season, Reuters reported. Competition from UPS, FedEx and other shippers, and consumers’ increasing reliance on email and other online options, have greatly loosened the grip the USPS once had on mail deliveries. The agency also struggles with high retiree healthcare costs.

Cutting back to five days a week will save the agency $2 billion a year, the USPS estimates. The halt to first-class mail deliveries on Saturday begins the first week of August. USPS lost almost $16 billion in its last fiscal year.

What other steps can the USPS take to slow the red ink?

30 comments Add your comment

Plum

February 8th, 2013
12:13 pm

These articles are a bit disingenous. The reason the USPS is losing so much $ is not because of delivery times or competition…it is because they were mandated to prefund their pension…something no other business has to – or would – do.

Steve

February 8th, 2013
12:16 pm

What other steps? It’s Federal, which means right off the rip that roughly 90% of it is deadweight. Not hard to figure out how to make it viable, even though it will never happen.

Georgia, The " New Mississippi "

February 8th, 2013
12:22 pm

You pay a Highschool or GED Grad $ 35.00 dollars an hour to put a piece of paper in a box and then wonder why you lose money ???????

Deke

February 8th, 2013
12:25 pm

Its Federal only in a sense that they are an independent agency and how they operate is dictated by the Government….as Plum mentioned, they were required by law to prefund their pension (when mail volume was at an all time high) but they also are required to have physical locations in places that may or may not be profitable (”required to serve all Americans”). Impossible to compare to UPS or FedEx because they cannot pick and choose how to run their operations.

Rob

February 8th, 2013
12:29 pm

Cutting Saturday? Why not cut Monday through Thursday as well?! All my mail is magazines, bills and junk other than around the holidays. All stuff I could just as easily deal with getting once a week. Saw an article on Yahoo saying, “what about all the Netflix people?” PLEASE! US Mail is a dying entity with limited current usefulness and a bleak bleak future. Let UPS and FedEx have access to your mail box (currently prohibited by federal law) and Postal Service can focus on rolling out silly stamps every other month and paying obscene salaries to the postal carriers.

Class of '98

February 8th, 2013
12:33 pm

“You pay a Highschool or GED Grad $ 35.00 dollars an hour to put a piece of paper in a box and then wonder why you lose money”

I couldn’t have said it much better myself.

Substitute “put a piece of paper in a box” with “drill doors onto car frames” and you can explain why GM needed a $50 billion taxpayer bailout.

Right

February 8th, 2013
12:36 pm

USPS is a victim of the technology age. There are far less items being mailed because so many things are being transferred electronically. I hate to say it but they need to outsource a lot of routes to independent contractors, that way they cut money off paying a pension, I would just hope they can offer their contractors medical insurance everyone needs it.

Vinny

February 8th, 2013
12:46 pm

Just watch – not a single gubbermint employee will lose their job as a result of the discontinuation of mail service on Saturday.

Government can’t get anything right. It’s a bloated, incompetent mess.

TheSmartGuy

February 8th, 2013
12:54 pm

$35/hour? Cite your source please. I’ll tell you first hand. USPS carriers (you know, the people this is affecting) make at MOST $20/hour. However, that’s after they’ve been with the service provider for 20+ years. Why don’t you go ahead and complain about UPS and FedEx drivers too? Same requirements, same business. What’s the difference? Congress.

DANNYBOY

February 8th, 2013
1:07 pm

Read an article about a year ago that stated the average postal employee receives 83K per year in compensation. Do you think maybe they are overpaid and under worked? And some people wonder why the USPS is in trouble.

Scott

February 8th, 2013
1:09 pm

@TheSmartGuy … UPS and FedEx charge more than $0.45 to send a letter across the country. thats why there arent complaints.

TheLazyComic

February 8th, 2013
1:09 pm

Funny, I’m waiting for a package in the mail, which was shipped FedEx, and then put into the hands of the USPS for final delivery. The package has tracking, so how did it go? When FedEx had it, all was good. As soon as they put it in the hands of the squirrels at the USPS, it’s already been sent to the WRONG POST OFFICE. So who knows when I’ll see my package. If the USPS were a private company, they would have had to close their doors years ago. Bunch of losers.

MrDan

February 8th, 2013
1:14 pm

USPS has been nothing but a jobs bank for minorities for 40 years. Nothing racist in that comment but they probably had their hands tied as technology passed them by. Now it’s way too late to do the drastic.

Lilburn Dad

February 8th, 2013
1:37 pm

Here you can find the pay of every postal employee. http://php.app.com/usps/search.php

In searching my zip, it appears most carriers make about $55k per year. A laborer / custodian makes $48 per year.

John

February 8th, 2013
1:38 pm

I would pick up my mail at the post office for $35.00 per hour. I would only charge two hours per day, since I live less than a mile from home.

Jim

February 8th, 2013
1:49 pm

Keep in mind the $ per hour is not the loaded cost. When you count in the costs of there health care, pension the number goes up.

Also most carries get 8-10hr of overtime a week, Dropping Saturday will mostly drop the overtime, it will not decrease the head count. (Because of the overhead costs it cheaper to pay the overtime then add FTE’s).

Susan

February 8th, 2013
2:22 pm

Last week FedX delivered a package to my address that wasn’t mine. Does that mean they misdeliver everything? UPS and FedX both rely on the postal service to deliver packages,

There are alot of veterans working at the PO. There’s alot more to delivering mail then putting paper in a box. I delivered express mail in a blizzard walking through snow up to my knees because people don’t shovel.

If you think noone will lose thier job you are mistaken. They won’t be the regular carriers. They will be the ones that were recently hired.

The closing of the post office would effect alot of other businesses.

Incompetent management is a big part of the problem.

I worked there 30 years and I wish people who don;t know what they are talking about would think before they comment.

WTF?

February 8th, 2013
2:38 pm

I wonder how much money the USPS would recoup if they charged ebay a fee for ebay charging sellers a fee against the shipping charges the seller charges to the bidder??? It seems so wrong for the USPS to be losing money daily while ebay abuses the USPS and the sellers and bidders by charging a fee on top of a fee paid to the Federal Government!!!! Can you say, crooked USPS executives in bed with ebay execs and politicians? Possible sickening barney frank type of thing going on here at yours and my expense!

Kenman

February 8th, 2013
2:53 pm

Facts that I haven’t seen yet, coming from very conscientious relatives that work or have worked at the Post Office.

Carriers are being falsely blamed for USPS problems, when they are more victims to the bureaucratic management. How many knew that carriers can work there for 20 years and make LESS than when they started? That’s because routes are redrawn all the time by supervisors in order to add to the number of routes so that the supervision gets raises and bonuses!

That’s right, while carriers can lose money year after year, politically connected supervisors get bonuses and incentives, even now!

At the local office where two relatives work/worked, they began with 2 supervisors, now have fewer carriers and more than twice the supervisors! Corrupt politically appointed Postmasters are just relocated, no loss of rank, salary, bonuses.

Bureaucratic supervision make illogical and unreasonable policies just to put their mark on the organization and most of these things make the Post Office more inefficient. For example, when one relative began working there he could go in as early as he liked to get the mail for his route cased and could go out delivering at a reasonable hour. Now, they are not allowed to come in until about 2 hours later and THEN must be out a short time later. Rules like this mean that mail delivered to the branch might actually be delayed or sit idle until some later time arbitrarily set to begin sorting.

As I mentioned earlier, carriers have their routes “reviewed” regularly to see how many hours they should take. And, everyone there knows, because it’s obvious and has been revealed by earnest lower level supervisors, that THE MAIL IS HELD AT THE LOCAL DISTRIBUTION CENTER SO THAT THERE ROUTE LEVEL IS DIMINISHED AND THAT REDUCES THEIR SALARY.

That happens every year, and you should understand that whenever the supervisors can cheat carriers out of work compensation THEY GET RAISES, BONUSES.

Bottom line, it’s the government bureaucracies’ influence on the USPS that has screwed it up and cheated everyone involved, just trying to do an honest job, and the carriers catch all the grief, including unwarranted association with violence in the “going postal” supposition.

Fred ™

February 8th, 2013
3:01 pm

I haven’t had a decent mail carrier in 15 years. If they did HALF as good a job as my Dekalb County trash guys do there would be no problems. I don’t get much but junk mail anyway so who needs them? Everything important is on line, or special delivery.

Mimi

February 8th, 2013
3:08 pm

I avoid the post office at all cost. I always ship with UPS or FedEx even though the price may be higher. I value my time and good customer serivce. Not saying that UPS/FedEx are the best but the people working the counters are usually friendly and helpful. At the Post Office the lines are too long, service too slow and bad additudes. You can’t maintain a profitable business this way and this is the result. I’ve probably walked into a post office 3 times in the last 10 years.

Georgia, The " New Mississippi "

February 8th, 2013
3:23 pm

Aren’t mail carriers represent by a Union ? …… They will not quit and you can not fire them.

Kenman

February 8th, 2013
5:50 pm

Georgia…Some city carriers are, I know, but most rural carriers (the bulk of them) are not. Again, it doesn’t matter what else you equate with the Post Office, you have to remember that it’s a quasi-governmental agency and has all the typical bureaucratic waste, abuse and fraud at the higher, political levels, but don’t blame the indians for what the chiefs are doing to destroy any semblance of efficiency, fairness, or order.

Watchful Eyes in Dixie

February 9th, 2013
3:32 am

This is fourth grade math. Cancel all union contracts. Trim the fat. I live in a town of 7500. We have our own post office. Everytime I go into that branch, I see three or four postal workers sitting around talking….and only one is dealing with the customers. Get rid of Wednesday and Saturday deliveries. Promotions based only on merit….period. Federal workers need to learn to end this sense of entitlement they have.

Watchful Eyes in Dixie

February 9th, 2013
3:41 am

And the USPS is OBSOLETE. A job bank for minorities, protected by union contracts, way behind the technology curve. When email came about, the P.O. should have been proactive in dealing with that.

t

February 9th, 2013
8:05 am

Is the U.S. Postal Service relevant? Now that there is UPS, FedEx, Airborne and a plethora of others do away with the postal service. Email is faster and cheaper. Soooooo where would all the information be disseminated if there was no PO to loiter in? Same answer, the internet.
Now, for those that have to use the regular mail, that would be delivered by individuals at so much a letter.
I have not received a letter in years.

Funkisha

February 9th, 2013
1:53 pm

The fallback plan for cessation of Saturday mail delivery is that you will still be able retrieve your Saturday mail in a post office box. Good luck with that. There’s already a box rental waiting list @ the post office branch I use, imagine what the demand will be now.

Adrianne

February 13th, 2013
11:48 am

In 2006, Republicans in Congress passed a law that the USPS has to fund its pension for 75 years into the future within a ten year period. This is why the post office is losing money. What corporation funds its pension for the next 75 years in the future? The republicans want to privatize the post office. Research it for yourselves and think twice about what you post without the facts. Its funny that the ajc didnt investigate their own articles.

BK

February 14th, 2013
3:22 pm

Since the U.S. Postal Service is swimming up hill against modern specialty services, namely the internet, and overnite package services, it needs a business model that serves the remaining need these services do not provide. Clearly, regular mail delivery to businesses and homes is its “sweet spot,” and this does not require every day service for any of us. Delivery twice a week is more than ample to satisfy this need and could be just as useful as our excellent garbage pick up service is. Some neighborhoods would get Monday and Thursday delivery while others would get Tuesday and Friday deliveries (or it could be M&W and T&T). Any more frequent delivery than this seems to be a nuisance as it is today. Putting employees on 4-day weeks with 10-hour days would also be highly attractive to them. Only one cynical note is that this would be the first government program ever to reduce significantly the amount of fuel the postal business uses and that employees use to get to work.

solome

February 14th, 2013
6:20 pm

no surprise—the employees are taking breaks have the day at the post office near me, even with long lines. They work slow as molasses—typical government employees.