Why is the USPS so inefficient?

I’m an average citizen who’s wondering why my stamp prices continue to rise.

I’m only 25 years old and already I can remember “when stamp prices were only 24 cents.” I understand that lettered mail went down drastically with the advent of the internet, but isn’t it also possible that the USPS grew like any other company during the dotcom bubble and it’s just refusing to downsize?

If commercial businesses can make considerable profits at this game, what is the USPS’s problem?

So are you whining about the actual cost to mail a first class letter or the percentage increase from 24 cents to 37 cents? :slight_smile:

Are you aware of the multi-billion dollar hit the USPS took from the anthrax scare? Are you aware the USPS no longer receives tax money for its operations, yet it still carries a $3.5 billion debt it has to pay off?

Delivery of the mail is a labor-intensive task. Even with computerization and automatic sorting, the mail is still delivered personally six days a week everywhere in America. Sure, you can attempt to compare the USPS with UPS or FedEx and probably find private business is more cost-effective for the most part. But do UPS and FedEx deliver everywhere the USPS does? Perhaps because it is not cost-effective – but the USPS delivers.

Perhaps the price of a stamp has been abnormally low for too long.

FWIW, I’ve seen the price of a first-class stamp go from six cents to 37 cents. I’ve also paid much higher prices for equivalent services overseas – and many of those countries subsidize their postal operations.

No, I’m not a real fan of the USPS, either. I, too, would wish they lift their game in many areas. But to be fair, maybe you should find out when, where, how and why the USPS delivers and see if commercial carriers do the same. I’m betting they don’t, and they won’t, because there is no profit in it.

The percentage increase. I do not feel my postal service quality has improved 50% over the last ten years.

Surely if the government will bail out the Airlines, it will aid its own postal service. Besides that, the terrorism issues of the last 11 months have little to do with the quarter-after-quarter loss the USPS has exhibited over the past ten years. Shame on you for using terrorism as an excuse. I suppose you’ll want the USPS under the new homeland security department too, eh?

What I believe you are unintentionally uncovering is that we all pay equal prices for shipment, anywhere in the US. This is an approach no business would ever dare take. I want to pay the price for my package to go from point A to B, not the distributed cost of every package going to/from every point in the US. A person should pay more if they wish to mail a package to the middle of nowhere.

I’m not talking about the efficiency/government corruption of state organizations overseas. I’m talking about the USPS. Comparing it to crap and saying “at least it’s not crap” is as vapid an argument as “perhaps the price of a stamp has been abnormally low for too long.”

The USPS needs to behave like a business, instead of a bureaucratic body. During every period of economic expansion, companies put a great deal of their earnings back into the company to avoid taxation on those earnings. As a result, wing services start popping up that aren’t necessary, but are a “perk” of said company’s service. When the economy begins to falter, however, companies discontinue these services that do not prove profitable.

The USPS is suffering from the inability to cut back, IMO.

This was addressed recently

Why is the increasing cost of sending a letter outpacing inflation?

Congratulations, you’ve just answered your own question. Either that, or you already had your mind made up when you started the thread. If the latter is the case, then why bother to start the thread in the first place?

from http://www.postalfacts.com/efficiency.htm

and here is info on postal efficiency http://www.postalfacts.com/legchange.htm

You see, it works like this.

First, I post a question for debate. Then, I state an opinion. Lastly, I wait for someone to prove me wrong.

Debate, Repeat.

It’s called a “forum” (that’s pronounced fore-umm).
n. pl. fo·rums, also fo·ra (fôr, fr)
a. The public square or marketplace of an ancient Roman city that was the assembly place for judicial activity and public business.
b. A public meeting place for open discussion.
c. A medium of open discussion or voicing of ideas, such as a newspaper or a radio or television program.
Feel free to participate, if you like.

Without regard to whether the USPS is actually inefficient, the circumstances in which the USPS operates are such that it would be shocking if it were efficient - it is a monopoly and its solvency is effectively guaranteed by the US government.
When you are the only game in town and you can’t go under regardless of what you do, the odds are extremely high that you will operate in a less efficient manner than if you had competition and were at risk of bankruptcy.

The problem is, it would be extremely hard to eliminate either of those circumstances. We need postal service, and competitors, even if they were allowed, probably wouldn’t want to provide universal service for a universal price - there really can be no profit is delivering mail to a fishing village in far northwest Alaska.


> How’s your wife?
> Compared to what?
> Why is the USPS so inefficient?

Compared to what? Can you show me another comparable and more efficient operation? Why do you say it is inefficient?

PostalFacts.com is a good start if you’re looking for educational material.

No, I am not discussing this with postalfacts. You have said the USPS is inefficient and I suppose you have a reason for saying it. Either you know of comparable operations which are more efficient or you think you could run it better.

I think the USPS gives pretty good value for money. Would you take my letter across town for the price of a stamp?

This is an interesting point. Back in the 19th Century, post offices did charge different rates based on how far they had to carry a letter. Charles Babbage, a British mathematician and scientist (who basically invented the computer about a century before one was actually built) analyzed the problem and demonstrated that it cost more to keep track and assign different rates based on distance than it did to just charge everyone a flat rate, regardless of whether the letter went across town or across the country. Postal services all over the world adopted flat-rate postage because it’s more efficient to do so.

I notice you talk about packages, as well as an inability to cut back. As was already alluded to, the raison d’etre of state-supported postal services isn’t business package delivery–where there have been major inroads by private package delivery services–but in the delivery of letters (and magazines, and “junk mail”, I suppose). I really don’t know, will UPS or FedEx pick up a package from, say, some little town down in the Okefenokee Swamp and deliver it to the aforementioned fishing village in Alaska? The USPS will; and they do it for 37 cents, the same as they charge for your letter across town, because it’s more efficient to do it that way. As far as I know, Babbage’s analysis still holds. And the USPS (and other national postal systems) can’t cut back beyond a certain point, because the mail still has to go through, to everywhere, no matter how remote or unimportant to outsiders that little town or village may be.

Of course, it remains to be seen how the Internet and e-mail will ultimately affect all of this. Post offices may wind up going the way of the Pony Express. But there are reasons why post offices act the way they do.

Sure, better a century ago, but applicable now? In an age when we can map from any address to any address with a computer, are arguments of “that’s too hard to calculate” valid?

I don’t claim any expertise on the subject. Remember, though, it’s not just a question of “calculating”–no doubt it wasn’t all that difficult to look up the distance from London to Leeds in 1830–but also of billing everyone and making sure that the guy whose letter is going from London to Leeds actually pays more than the guy whose letter is going from Baker Street to Fleet Street (but less than the guy whose letter is going all the way to Edinburgh).

I note that cell phone companies seem to increasingly think it’s good business to charge you the same for a call across the country as for a call across town. “Long distance” phone service may wind up being as obsolete as the Pony Express, too.

MEBuckner, I doubt that Babbage’s analysis still holds. Babbages was talking about the cost of transmitting and analyzing information. And the costs of both have dropped dramatically since his day.
In addition, I wouldn’t be surprised if Babbage’s analysis never really applied to the U.S. Given the smaller size of Britain, an analysis that the small changes in distance and cost were not worth changing pricing, given the costs of analyzing and tracking those small changes, makes sense. It probably never did in the U.S. (or Russia, India, Australia or China).

In any event, today the industry does not consider the Universal Service Obligation (“USO”) - the obligation to provide the same service for the same price to be a matter of efficiency, but instead a (legitimate) political imperative. See the link for at least some discussion of the issue http://www.economist.com/displayStory.cfm?Story_ID=308233

every country is simplifying their rates. It is not only a question of the Post Office but also from the customer’s side. Complex rates mean more questions, more confusion, more wasted time, more letters returned. Simpler rates simplify things and reduce cost.

Phone rates seem to be headed in the same direction and it seems soon it will be 5 cents a minute whether you are calling the state next door or around the world.

I boycott the USPS. Fortunately they have serious for profit competition. I send everything by United Parcel Service or FedEx. You wouldn’t believe the amount of money I save.

I spent a summer delivering mail in 1961. As a temp, I made minimum wage. However, career mailmen and postal clerks made only a little more. That was adequate to recruit people, since the jobs were so undemanding.

Somewhere between then and now, a decision was made to pay mailmen a reasonable wage. This was nice for postal workers and their families, but it was not necessary from a business POV.

There are arguably too many post offices. E.g., there are 3 within a 5-minute drive of my house.

Postal management has made some bad business decisions. E.g, they decided to start a business of having mailmen deliver printed copies of e-mails. :eek:

Prices have gone up by factor of around 10 times since 1960. First class stamps have risen from .03 to .37, which is in line. Postcards, OTOH, have gone from .01 to .21 (?) – faster than general inflation.

It can be argued that Postal Cards were always too good a deal and were subsidised by First Class mail and the general revenue. It probably costs about as much to deliver a Postal Card as it does first class.

Interesting. For quite awhile I was shipping videptapes once a week to Melbourne, Australia at the quickest and most expensive USPS rate ( express ). They were just as quick ( actualy quicker, I think ) as FedEx or UPS and were only 1/3 the cost ( about $22 vs. $55-65 ).

shrug YMMV.

  • Tamerlane