Wednesday, March 3, 2010

Post Office Losing Billions: Here Comes $1 Postage Stamp

The U. S. Post office says it lost $2.8 billion last year and is expected to lose more this year. Next month postage stamps will go up to .43 cents per one ounce letter. Other countries have privatized all or parts of their postal system with mixed result. Package and express delivery companies like UPS, FED EX have cut into USPS’s monopoly as has email and telephone bill payments. Private companies have suggested they would buy or lease the ability to deliver mail but that’s been resisted but, the postal worker’s union consistently puts the kibosh on that idea..
The USPS’ mail volume dropped 5.2 billion pieces last year and could be down from 10-15 billion pieces in 2009-2010.
In recognition of its dodo bird status last week, the post office said it planned to offer early retirement to 150,000 workers and is eliminating 1,400 management positions and closing six of its 80 district offices across the country in cost-cutting efforts. Post Master General Potter said he expects 10,000 to 15,000 workers to accept the early retirement offer.
The post office claims it has cut 50 million work hours over the past years, stopped construction of new facilities, frozen salaries for executives, began selling unused facilities, has cut post office hours and threatened to end 6-day a week mail delivery.
By 2012 a letter carrier can earn six figure salaries with generous benefits and retirement bargained for in the latest union contract. Long seen as the temple of patronage hiring and certainly an earmark target as members of Congress are fond of raiding the US Treasury to build new post offices and name them for themselves.
The Post Office operates 200,000 vehicles and a penny increase in gasoline cost taxpayers $8 million and you can bet gasoline and diesel prices are headed up again.
The post master general has been rumored to be paid $800,000 a year. He says that’s not true that his salary is $263,575. He said the news reports also counted his retirement fund, the cost of his security detail and a $135,000 bonus which he would be paid over 10 years after he retires. Regardless that adds up to a bureaucrats bundle
The bonus is based on improved delivery rates and customer satisfaction, he said. Under the current financial conditions, Potter said, he would not be eligible for a bonus this year. The USPS has been criticized for paying millions in so-called heartbeat bonuses to tens of thousands of managers — heartbeat meaning that if you have one you get a bonus.
Carolyn Gallagher, chairwoman of the postal governing board, said postal executives are paid only a fraction of what executives in similarly sized businesses receive. But, those businesses have to make a profit to pay anybody anydhting. The USPS is a proved, prolific money loser.
The postal union is one of the most powerful contributing millions to politicians and turning out masses of “volunteers” to influence elections.
At the current pace and rate of postage increases the costs to mail a one ounce letter by 2012 will exceed .50 cents and one dollar before mid-century. Analyst compare the USPS troubles to those of the nation’s railroads.

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