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View Diary: Axing Saturday Delivery Won't Save USPS (111 comments)

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    Eliminating Saturday delivery of first class mail is probably not the best strategic decision.  First class mail is a declining market, but it will not go away and only the USPS understands how to do it.

    The first problem at the USPS is that there are too many underserved offices in rural areas.  One big post office can serve a wide area.

    The second problem is junk mail.  It costs somewhat less to deliver (less sorting) but is otherwise the same effort as first class mail.  It is a net money loser.  The "independent" post office has been forced to carry it for decades by the direct marketing industry.

    The third problem is that the USPS does not have a good strategy to take care of their delivery network, including Saturday delivery.  As a "last mile" network for delivering physical assets, they do very well.  If you're, say, Amazon, you typically have a lot of warehouses already.  If you can deliver to the nearest sorting facility, you can have next day delivery for the price of "super saver."  And for individuals shipping packages, well, you just put it out in your mailbox.

    The fourth problem is that the USPS is behind in tracking technology, even though they can do it cheaper.  (If you could send a first class letter for $2 with end to end tracking in near real time, you'd clobber a huge piece of Fedex and UPS.)

    The fifth problem is that the USPS has too many unrelated activities.  Their single most profitable business is money orders.  Why?  Money orders are God's gift to rural meth cookers.  If you sell it to the highest Wall Street bidder, you get a lot of capital to put proper systems in place for passing your logistics data to your customers.  In the mean time, they have their own ill-governed police force (the postal inspection service) whose main function was to chase down pornographers.  This should be shut down.

    The sixth problem, their pensions, is a problem everyone faces.  I'd advocate making the banksters bail it out but the money has already been spent on yachts and gold commodes.

    •  Good points, mostly... (0+ / 0-)

      Though closing rural offices doesn't save much. At one time a rural office needed three or so full timers to run it- postmaster, clerk, carrier, etc.. The unions have now agreed to allow workers in small post offices to work in multiple roles, thus one person can sort the mail, deliver it, and then open up the Post Office for a couple of hours to serve retail customers. They need a carrier anyways and renting space in a small town is cheap, so closing a small town Post Office doesn't save peanuts.

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